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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September~~June 30, ~~2002~~2003

Commission file number 333-96233

NORTH AMERICAN VAN LINES, INC.
(Exact name of registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of
incorporation or organization)

52-1840893
(I.R.S. Employer
Identification Number)

5001 U.S. Highway 30 West
P.O. Box 988
Fort Wayne, Indiana 46801-0988
(Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code: (260) 429-2511

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ýo No oý

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

When we refer to "North American Van Lines", "NAVL", "our company", "our", "we" or "us", we are referring to North American Van Lines, Inc., a Delaware corporation, together with its ~~NORTH~~subsidiaries ~~AMERICAN~~and ~~VAN~~their ~~LINES~~predecessors, ~~INC~~ except where the context otherwise requires. ~~Condensed~~ ~~Consolidated~~When ~~Balance~~we ~~Sheets At~~refer ~~September 30~~to "SIRVA," ~~2002~~we ~~and~~are ~~December 31~~referring to our parent, ~~2001 (Dollars~~SIRVA, inInc., ~~thousands~~a ~~except~~Delaware ~~share~~corporation. ~~data) (Unaudited)~~

		September 30, 2002			December 31, 2001
Assets
Current assets:
	Cash and cash equivalents	$	45,238		$	32,119
	Accounts and notes receivable, net of allowance for doubtful accounts of $26,146 and $24,386, respectively		386,808			267,112
	Other current assets		55,427			38,289
	Deferred and recoverable income taxes		37,157			39,553
Total current assets			524,630			377,073
Property and equipment, net			175,836			165,367
Goodwill and intangible assets, net			533,408			413,229
Receivable from SIRVA, Inc.			27,284			23,268
Other assets			108,086			116,877
Total long-term assets			844,614			718,741
Total assets		$	1,369,244		$	1,095,814
Liabilities and Stockholder's Equity
Current liabilities:
	Current portion of long-term debt	$	20,628		$	16,958
	Current portion of capital lease obligations		3,036			4,006
	Revolving credit facilities and notes payable		6,921			47,235
	Accounts payable		138,270			61,009
	Other current liabilities		322,588			273,804
	Accrued income tax payable		1,059			2,285
Total current liabilities			492,502			405,297
Long-term debt			525,555			440,410
Capital lease obligations			14,228			16,366
Due to SIRVA, Inc.			15,112			38,515
Other liabilities			47,870			43,722
Deferred income taxes			42,122			29,714
Total long-term liabilities			644,887			568,727
Total liabilities			1,137,389			974,024
Commitments and contingencies
Stockholder's equity:
	Common stock, $.01 par value, 1,000 shares authorized, issued and outstanding at September 30, 2002 and December 31, 2001, respectively		—			—
	Additional paid-in-capital		271,987			188,950
	Accumulated other comprehensive loss		(13,887	)		(17,988	)
	Accumulated deficit		(26,245	)		(49,172	)
Total stockholder's equity			231,855			121,790
Total liabilities and stockholder's equity		$	1,369,244		$	1,095,814

PART I.

ITEM 1. FINANCIAL STATEMENTS

NORTH AMERICAN VAN LINES, INC.

Condensed Consolidated Balance Sheets

At June 30, 2003 and December 31, 2002

(Dollars in thousands except share data)
(Unaudited)

		June 30, 2003			December 31, 2002
Assets
Current assets:
	Cash and cash equivalents	$	53,655		$	42,920
	Accounts and notes receivable, net of allowance for doubtful accounts of $25,536 and $24,922, respectively		381,945			308,313
	Relocation properties held for resale, net		51,584			39,115
	Other current assets		35,706			38,145
	Deferred and recoverable income taxes		38,555			37,641

Total current assets			561,445			466,134

Property and equipment, net			166,886			170,830
Goodwill and intangible assets, net			576,515			556,543
Receivable from SIRVA, Inc.			31,724			28,879
Other assets			120,497			113,577

Total long-term assets			895,622			869,829

Total assets		$	1,457,067		$	1,335,963

Liabilities and Stockholder's Equity
Current liabilities:
	Current portion of long-term debt and capital lease obligations	$	26,049		$	27,261
	Relocation financing facilities		31,613			15,432
	Other short-term debt		7,875			1,073
	Accounts payable		135,574			122,359
	Accrued transportation expense		93,860			63,691
	Other current liabilities		243,728			230,607
	Accrued income taxes		3,820			6,116

Total current liabilities			542,519			466,539

Long-term debt and capital lease obligations			559,262			515,254
Due to SIRVA, Inc.			20,978			32,133
Other liabilities			62,781			66,610
Deferred income taxes			41,803			34,479

Total long-term liabilities			684,824			648,476

Total liabilities			1,227,343			1,115,015

Commitments and contingencies
Stockholder's equity:
	Common stock, $.01 par value, 1,000 shares authorized, issued and outstanding at June 30, 2003 and December 31, 2002, respectively		—			—
	Additional paid-in-capital		271,987			271,987
	Accumulated other comprehensive loss		(29,396	)		(29,075	)
	Accumulated deficit		(12,867	)		(21,964	)

Total stockholder's equity			229,724			220,948

Total liabilities and stockholder's equity		$	1,457,067		$	1,335,963

See accompanying notes to condensed consolidated financial statements.

NORTH AMERICAN VAN LINES, INC.

Consolidated Income Statements

For the three and six months ended June 30, 2003 and 2002

(Dollars in thousands)
(Unaudited)

		Three Months Ended					Six Months Ended
		June 30, 2003		June 30, 2002			June 30, 2003		June 30, 2002
Operating revenues		$	577,499	$	537,144		$	1,049,862	$	966,798
Operating expenses:
	Purchased transportation expense		320,072		319,687			575,985		574,589
	Other direct expense		143,551		115,639			266,035		210,249

Total direct expenses			463,623		435,326			842,020		784,838
Gross margin			113,876		101,818			207,842		181,960
	General and administrative expenses		87,684		77,770			169,228		152,420
	Restructuring credit		—		(111	)		—		(842	)

Income from operations			26,192		24,159			38,614		30,382
	Non-operating expense		120		674			142		308
	Interest expense		12,615		12,268			25,126		24,844

Income before income taxes			13,457		11,217			13,346		5,230
	Provision for income taxes		4,490		4,208			4,249		1,528

Net income		$	8,967	$	7,009		$	9,097	$	3,702

See accompanying notes to condensed consolidated financial statements.

NORTH AMERICAN VAN LINES, INC. Consolidated ~~Statements~~Statement of ~~Operations For~~Changes ~~the~~in ~~three~~Stockholder's ~~and~~Equity For ~~nine~~the six months ended ~~September~~June 30, ~~2002 and 2001~~ 2003 (Dollars in thousands) (Unaudited)

				Three Months Ended						Nine Months Ended
			Total			Accumulated deficit			Accumulated other comprehensive income (loss)			Common stock			Additional paid-in-capital
				Sept 30, 2002			Sept 30, 2001			Sept 30, 2002			Sept 30, 2001
Balance at December 31, 2002			$	220,948		$	(21,964	)	$	(29,075	)	$	—		$	271,987
Operating revenues				$	674,169		$	671,896		$	1,640,967		$	1,773,559
Comprehensive income (loss):
Operating expenses:
	Net income			9,097			9,097
	Purchased transportation expense				414,716			443,098			989,304			1,135,481
	Unrealized hedging loss, net of tax benefit of $(1,463)			(2,804	)					(2,804	)
	Other direct expense				116,767			99,109			306,217			297,399
	Net change in unrealized holding gain on available-for-sale securities, net of tax of $597			916						916
Total direct expenses					531,483			542,207			1,295,521			1,432,880
	Minimum pension liability, net of tax of $2,232			(2,232	)					(2,232	)
Gross margin					142,686			129,689			345,446			340,679
	Foreign currency translation adjustment, net of tax of $2,189			3,799						3,799
	Insurance and claims				15,367			13,425			36,166			40,645
Total comprehensive income				8,776
	Other indirect expense				3,575			2,193			6,002			7,058
Balance at June 30, 2003			$	229,724		$	(12,867	)	$	(29,396	)	$	—		$	271,987
Total indirect expenses					18,942			15,618			42,168			47,703
	Selling, general and administrative expenses				78,634			82,717			228,628			245,313
	Restructuring charge (credit)				—			(112	)		(842	)		4,896
		Income from operations			45,110			31,466			75,492			42,767
Non-operating income (expense)					(8	)		(67	)		(316	)		197
		Income before interest and taxes			45,102			31,399			75,176			42,964
Interest expense					13,834			16,497			38,679			48,085
		Income (loss) before income taxes			31,268			14,902			36,497			(5,121	)
Provision (benefit) for income taxes					12,042			18,831			13,570			(1,300	)
		Income (loss) before cumulative effect of accounting change			19,226			(3,929	)		22,927			(3,821	)
Cumulative effect of accounting change, net of tax					—			—			—			(328	)
		Net income (loss)		$	19,226		$	(3,929	)	$	22,927		$	(4,149	)

See accompanying notes to condensed consolidated financial statements.

NORTH AMERICAN VAN LINES, INC. Condensed Consolidated ~~Statement~~Statements of ~~Changes~~Cash ~~in Stockholder's Equity~~ Flows For the ~~nine~~six months ended ~~September~~June 30, 2003 and 2002 (Dollars in thousands) (Unaudited)

		Total			Accumulated deficit			Accumulated other comprehensive income (loss)			Common stock		Additional paid-in-capital
		Six Months Ended
Balance at December 31, 2001		$	121,790		$	(49,172	)	$	(17,988	)	$	—	$	188,950
		June 30, 2003			June 30, 2002
Comprehensive income (loss):
Cash flows from operating activities:
	Net income	$	229,~~927~~097		$	223,~~927~~702
	Unrealized hedging gain, net of tax of $872		1,308						1,308
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
	Net change in unrealized holding loss on available-for-sale securities, net of tax benefit of $(875)		(1,312	)					(1,312	)
	Depreciation		18,606			16,289
	Foreign currency translation adjustment, net of tax of $2,781		4,105						4,105
	Amortization		6,220			3,300
	Total comprehensive income		27,028
	Change in provision for losses on accounts and notes receivable		1,649			(565	)
	Additional capital contribution		83,037											83,037
	Deferred and recoverable income taxes		6,858			2,994
Balance at September 30, 2002		$	231,855		$	(26,245	)	$	(13,887	)	$	—	$	271,987
	Loss on sale of assets, net		443			176
Change in operating assets and liabilities:
	Accounts and notes receivable		(56,516	)		(21,489	)
	Relocation properties held for resale, net		(16,969	)		8,008
	Other current assets		5,426			(5,779	)
	Accounts payable		3,591			158
	Other current liabilities		29,708			24,208
	Accrued income taxes		(2,448	)		(817	)
	SIRVA intercompany accounts		(14,001	)		(482	)
	Other long-term assets and liabilities		(4,289	)		2,630
Net cash provided by (used for) operating activities			(12,625	)		32,333
Cash flows from investing activities:
	Additions of property and equipment		(9,694	)		(17,414	)
	Proceeds from sale of property and equipment		910			2,573
	Purchases of investments		(44,876	)		(28,054	)
	Proceeds from maturity or sale of investments		39,251			35,237
	Acquisitions, net of cash acquired		(30,736	)		(82,867	)
	Other investing activities		(1,868	)		(854	)
Net cash used for investing activities			(47,013	)		(91,379	)
Cash flows from financing activities:
	Borrowings on revolving credit facility and other short-term debt		243,740			139,300
	Repayments on revolving credit facility and other short-term debt		(180,225	)		(144,300	)
	Borrowings on relocation financing facilities		34,489			—
	Repayments on relocation financing facilities		(19,072	)		—
	Change in balance of outstanding checks		4,338			(7,078	)
	Borrowings on long-term debt		163			50,403
	Repayments on long-term debt and capital lease obligations		(15,055	)		(24,458	)
	Capital contributions from SIRVA		—			56,500
Net cash provided by financing activities			68,378			70,367
	Effect of translation adjustments on cash		1,995			436
Net increase in cash and cash equivalents			10,735			11,757
Cash and cash equivalents at beginning of period			42,920			32,119
Cash and cash equivalents at end of period		$	53,655		$	43,876

See accompanying notes to condensed consolidated financial statements.

NORTH AMERICAN VAN LINES, INC. Notes to Condensed Consolidated ~~Statements~~Financial ~~of Cash Flows~~Statements ~~For the nine months ended September~~June 30, ~~2002 and 2001~~ 2003 (Dollars in thousands) (Unaudited)

		Nine Months Ended
		Sept 30, 2002			Sept 30, 2001
Net cash provided by operating activities		$	46,738		$	51,046
Cash flows from investing activities:
	Additions of property and equipment		(24,916	)		(33,654	)
	Proceeds from sale of property and equipment		2,336			3,916
	Purchases of investments		(43,522	)		(61,349	)
	Proceeds from maturity or sale of investments		45,627			58,132
	Acquisitions		(86,162	)		—
	Other investing activities		(1,248	)		(1,154	)
Net cash used for investing activities			(107,885	)		(34,109	)
Cash flows from financing activities:
	Borrowings (repayments) on revolving credit facilities and notes payable, net		5,407			(12,840	)
	Change in balance of outstanding checks		(8,413	)		(5,122	)
	Borrowings on long-term debt		50,403			—
	Principal payments on long-term debt		(23,072	)		(8,850	)
	Capital contributions from SIRVA		56,500			—
	Other financing activities		(7,477	)		(1,494	)
Net cash provided by (used for) financing activities			73,348			(28,306	)
	Effect of translation adjustments on cash		918			286
Net increase (decrease) in cash and cash equivalents			13,119			(11,083	)
Cash and cash equivalents at beginning of period			32,119			43,509
Cash and cash equivalents at end of period		$	45,238		$	32,426

See accompanying notes to condensed consolidated financial statements.

NORTH AMERICAN VAN LINES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2002 (Dollars in thousands) (Unaudited)

(1) Basis of Presentation

This report covers North American Van Lines, Inc., ~~a Delaware corporation,~~ and its subsidiaries (the "Company").

The accompanying unaudited condensed consolidated financial statements should be read together with the Company's audited consolidated financial statements for the year ended December 31, ~~2001~~2002. Certain information and footnote disclosures normally included in the aforementioned financial statements prepared in accordance with generally accepted accounting principles are condensed or omitted. Management of the Company believes the interim financial statements include all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial condition and results of operations for the interim periods presented.

~~Certain~~In ~~reclassifications~~December 2002, ~~have~~the ~~been~~Financial ~~made~~Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure" ("SFAS 148"), an amendment of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"). This statement amends SFAS 123 to provide alternative methods of transition for a voluntary change to the ~~condensed~~fair ~~consolidated~~value based method of accounting for stock-based employee compensation and amends the disclosure requirements to require prominent disclosure in both annual and interim financial statements about the method of accounting for stock- based employee compensation and the ~~prior~~effect ~~periods~~of ~~presented~~the tomethod ~~conform~~used ~~with~~on reported results. The Company has adopted only the ~~September 30,~~disclosure ~~2002~~requirements ~~presentation~~of SFAS 148.

In accordance with the provisions of SFAS 123, as amended SFAS 148, our parent, SIRVA, Inc. (2"SIRVA"), ~~Acquisition~~has ~~Commitment~~elected to continue to account for stock-based compensation under the intrinsic value based method of accounting described by Accounting Principles Board Opinion 25, ~~Acquisitions~~"Accounting ~~and~~for ~~Related~~Stock ~~Party~~ Issued to Employees" ("APB 25"). Under APB 25, generally no cost is recorded for stock options issued to employees unless the option price is below market at the time options are granted.

Had the ~~(a)~~Company elected to apply the provisions of SFAS ~~Acquisition~~148 ~~Commitment~~regarding ~~and~~recognition ~~Related~~of ~~Party~~ compensation expense to the extent of the calculated fair value of stock options granted, net income would have changed as follows:

On July 29, 2002, RS Acquisition, LLC, a subsidiary of SIRVA, Inc. ("SIRVA"), the Company's parent, acquired The Rowan Group PLC (UK) and Rowan Simmons Conveyancing Limited (UK) (together, "Rowan Simmons"), a U.K. based provider of relocation services, including home sale and purchase assistance, management of tenant responsibilities, and other services to corporations that assist employees in their relocation needs, for approximately $14,000. The purchase price was funded from the proceeds of a loan from Fleet National Bank. Under the terms of a purchase agreement between RS Acquisition, LLC and the Company, the Company agreed to acquire Rowan Simmons, excluding the homes inventory and associated mortgage liabilities, from RS Acquisition, LLC within six months from the date of purchase for approximately $14,000. Since the transaction will be between entities under common control, the transaction will be accounted for in a manner similar to a pooling-of- interests.

	Three Months Ended						Six Months Ended
	June 30, 2003			June 30, 2002			June 30, 2003			June 30, 2002
Net income as reported	$	8,967		$	7,009		$	9,097		$	3,702
Pro forma compensation cost under fair value method, net of tax		(100	)		(78	)		(204	)		(149	)

Adjusted net income	$	8,867		$	6,931		$	8,893		$	3,553

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (b"FIN 46"). FIN ~~Acquisitions~~46 ~~and~~addresses ~~Related~~consolidation ~~Party~~ by business enterprises of variable interest entities. The Company believes the adoption of FIN 46 will not have a material effect on operating results or financial condition. As of June 30, 2003, the Company had no variable interest entities.

OnIn ~~May 3,~~April ~~2002~~2003, ~~SIRVA,~~the ~~through~~FASB ~~two~~issued ~~wholly~~Statement ~~owned subsidiaries~~No. 149, ~~purchased the business (~~"~~CRS")~~Amendment ~~conducted~~of ~~by Cooperative Resource Services,~~Statement ~~Ltd.~~133 ~~that~~on ~~provides~~Derivative ~~comprehensive relocation~~Instruments ~~services to companies~~ and ~~their~~Hedging ~~employees, including home sale services, relocation coordination services and mortgage lending services. One of these two subsidiaries, SIRVA Relocation LLC (~~Activities"~~SIRVA~~ Relocation"), which is directly owned by the Company, purchased such business' acquired assets and equity other than equity relating to certain mortgage lending operations of the seller. The mortgage lending operations of the seller were purchased by the other subsidiary, CMS Holding LLC ("~~CMS Holding~~SFAS 149")~~, which is directly owned by SIRVA~~. ~~The~~SFAS 149 ~~mortgage lending operations share common~~amends ~~customers~~and ~~with~~clarifies ~~the~~financial ~~other~~accounting ~~operations~~and ofreporting ~~SIRVA Relocation. Subject to certain adjustments, the combined cash purchase price~~ for ~~the~~derivative ~~acquisitions was approximately $60~~instruments,~~000,~~ ofincluding ~~which~~certain ~~$3,500~~derivative ~~was~~instruments ~~paid~~embedded ~~for the assets of the mortgage lending operations. Approximately $45,000 of the purchase price was paid~~ in ~~cash~~other ~~and $15,000 (non-cash) was paid in notes issued by the Company. In addition, certain~~

contracts (collectively, referred to as derivatives) and for hedging activities under SFAS 133. This statement is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. The Company has not yet determined the effect of the adoption of SFAS 149 on operating results or financial condition.

In May 2003, the FASB issued Statement No. 150 "Accounting For Certain Financial Instruments with Characteristics of both Liabilities and Equity" ("SFAS 150"). SFAS 150 establishes standards for how a company classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that a company classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective for the first fiscal period beginning after December 15, 2003. The Company believes the adoption of SFAS 150 will not have a material effect on operating results or financial condition.

Certain reclassifications have been made to the condensed consolidated financial statements for the prior periods presented to conform with the June 30, 2003 presentation. For the three and six months ending June 30, 2003 and 2002, insurance and claims expense has been classified as a component of other direct expense. Other indirect expense has been classified as a component of general and administrative expenses. The changes were made to be more reflective of the Company's current business operations. The changes result in a different determination of gross margin than previously shown.

(2) Acquisitions

On July 29, 2002, RS Acquisition Holding, LLC, a wholly owned subsidiary of SIRVA, acquired The Rowan Group PLC and Rowan Simmons Conveyancing Limited (together, "Rowan Simmons"), a U.K. based provider of relocation services, including home sale and purchase assistance, management of tenant responsibilities and other services to corporations that assist employees in their relocation needs, for $14,242. The purchase price was funded from the proceeds of a bank loan. Under the terms of a purchase agreement between RS Acquisition Holding, LLC and the Company, the Company acquired Rowan Simmons from RS Acquisition Holding, LLC on April 23, 2003 for $14,242. Since the transaction was between entities under common control, the transaction was accounted for in a manner similar to a pooling-of-interests, with inclusion of operations, cash flows and financial position as of July 29, 2002.

On June 6, 2003, the Company purchased Scanvan, a Scandinavian-based moving services company, for approximately $24,700, net of acquired cash. The cost of Scanvan in excess of the net assets acquired has been preliminarily allocated to goodwill and is subject to adjustment when additional information concerning asset and liability valuations is finalized.

(3) Income Taxes

The Company's estimated provision for income taxes differs from the amount computed by applying the U.S. federal and state statutory rates. This difference is primarily due to (1) differences in the statutory rates between the U.S. and countries where the Company has permanently reinvested earnings and (2) tax incentive programs that the Company has qualified for under the laws of certain jurisdictions.

liabilities relating to the acquired business were assumed in connection with the acquisition including $26,572 of indebtedness under a revolving credit facility used to fund the mortgage lending operations, which indebtedness was assumed by CMS Holding. The cash purchase price for the acquisition, as well as approximately $24,100 of other indebtedness of the acquired business that was retired as part of the acquisition, were financed with proceeds of $36,500 of cash contributions from SIRVA. SIRVA obtained those proceeds from the sale of its common stock to Clayton, Dubilier and Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership managed by Clayton, Dubilier and Rice, Inc. (~~"Fund VI"~~4) ~~and~~Cash ~~an affiliate of Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership ("Fund V"), the controlling shareholder of SIRVA,~~ and ~~the~~Cash incurrence of $50,000 additional senior indebtedness by the Company. The cost to acquire CRS has been preliminarily allocated to the assets acquired and liabilities assumed according to estimated fair values and is subject to adjustment when additional information concerning asset and liability valuations is finalized. The preliminary allocation has resulted in acquired goodwill of $83,672. Equivalents

~~The following~~Cash ~~unaudited~~and ~~pro~~cash ~~forma~~equivalents ~~consolidated~~included ~~information~~$29,183 ~~presents~~and ~~the~~$22,069 ~~results~~at ofJune 30, ~~operations~~2003 ofand December 31, 2002, respectively, primarily relating to the Company's wholly asowned ifinsurance ~~the~~subsidiaries ~~acquisition~~that ofrequire ~~CRS~~regulatory ~~had~~agency ~~taken~~approval ~~place~~prior atto ~~the~~being ~~beginning~~used offor ~~each~~non-insurance ~~period presented:~~related purposes.

	Three Months Ended Sept 30, 2002		Three Months Ended Sept 30, 2001			Nine Months Ended Sept 30, 2002		Nine Months Ended Sept 30, 2001
Revenue	$	674,169	$	690,761		$	1,668,048	$	1,834,645
Income (loss) before cumulative effect of accounting change	$	19,226	$	(2,980	)	$	24,584	$	(756	)
Cumulative effect of accounting change, net of tax		—		—			—		(843	)
Net income (loss)	$	19,226	$	(2,980	)	$	24,584	$	(1,599	)

(5) Long-term Debt and Capital Lease Obligations

The unaudited pro-forma consolidated results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have actually resulted had the combinations been in effect on January 1, 2001, or of future results of operations.

On April 12, 2002, the Company purchased the business ("NAIT") conducted by the National Association of Independent Truckers, a leading provider of insurance services to independent contract truck drivers, for $25,359 in cash, $3,611 in assumed net liabilities, a deferred amount of $3,000 payable subject to maintaining a certain number of insured members as of December 31, 2002 and 2003 and an actuarially determined amount to be paid during 2003 and 2004, based on insurance losses incurred with respect to policies issued during the year ended December 31, 2001. NAIT is an association of more than 11,000 independent contract truck drivers that provides its members with occupational accident, physical damage and non-trucking liability insurance, as well as access to a suite of professional services. The purchase price was funded from the sale of securities, existing cash balances and $20,000 of cash contributions from SIRVA. SIRVA obtained those proceeds from the sale of its common stock to Fund VI.

The cost to acquire NAIT has been preliminarily allocated to the assets acquired and liabilities assumed according to estimated fair values and is subject to adjustment when additional information concerning asset and liability valuations is finalized. The preliminary allocation has resulted in acquired goodwill of $33,508.

On December 31, 2001, the Company and Moveline, Inc. ("Moveline") completed a merger under an agreement and plan of merger ("Merger Agreement") dated as November 9, 2001, through a stock-for-stock merger of Moveline and a wholly owned subsidiary of the Company ("Merger") with such subsidiary as the surviving corporation. Under the terms of the Merger Agreement, Moveline's stockholders received shares of common stock of SIRVA for Moveline shares acquired in the Merger. During the three months ended September 30, 2002, an intercompany payable with SIRVA of $26,537 associated with the Merger was converted by SIRVA to additional paid-in-capital (non-cash).

(3) Cash and Cash Equivalents

Cash and cash equivalents included $18,127 and $13,474 primarily relating to the Company's wholly owned insurance subsidiaries, at September 30, 2002 and December 31, 2001, respectively, require regulatory agency approval prior to being used for non-insurance related purposes.

(4) Goodwill and Intangible Assets

Goodwill and intangible assets consisted of the following:

	September 30, 2002		December 31, 2001
Trade names, net	$	165,670	$	165,670
Goodwill, net		367,738		247,559
	$	533,408	$	413,229

The changes in the carrying amount of goodwill for the nine months ended September 30, 2002 are as follows:

		Nine Months Ended September 30, 2002
Balance as of January 1, 2002		$	247,559
Goodwill acquired:
	NAIT		33,508
	SIRVA Relocation		83,672
	Other acquisitions		2,999
Balance as of September 30, 2002		$	367,738

In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but rather be tested for impairment at least annually. The company adopted the provisions of SFAS 142 effective January 1, 2002

and has discontinued the amortization of goodwill and intangible assets with indefinite useful lives. Trade names consist of the brand names northAmerican, Allied, Pickfords and Allied Pickfords. Goodwill and intangible assets have been identified as having indefinite useful lives and were tested for impairment consistent with the provisions of SFAS 142. The Company completed such testing during the second quarter of 2002 and determined that there was no impairment of goodwill and intangible assets as of January 1, 2002.

The carrying amount of goodwill attributable to each reportable business segment was as follows:

	September 30, 2002		December 31, 2001
Moving Services—North America	$	70,403	$	70,141
Moving Services—Europe and Asia Pacific		118,233		115,496
Insurance Services		78,476		44,968
Relocation Services		83,672		—
Global Relocation Services		350,784		230,605
Logistics Services		16,954		16,954
	$	367,738	$	247,559

The following represents a comparison of results for the three and nine months ended September 30, 2002 and 2001 adjusted to exclude amortization expense:

	Three Months Ended Sept 30, 2002		Three Months Ended Sept 30, 2001			Nine Months Ended Sept 30, 2002		Nine Months Ended Sept 30, 2001
Net income (loss), as reported	$	19,226	$	(3,929	)	$	22,927	$	(4,149	)
Amortization of goodwill and trade names		—		2,749			—		8,267
Income tax provision		—		(1,100	)		—		(3,307	)
Pro forma net income (loss)	$	19,226	$	(2,280	)	$	22,927	$	811

(5) Income Taxes

The Company's estimated provision for income taxes differs from the amount computed by applying the federal and state statutory rates. This is primarily due to (1) the non-deductibility of certain items expensed for book purposes and (2) limitations that exist on the availability of certain foreign income tax credits. These items create taxable income that is greater than income reported for financial statement purposes.

(6) Long-term Debt

Long-term debt consisted of the following:

	September 30, 2002		December 31, 2001
	June 30, 2003		December 31, 2002
Revolving credit facility	$	4684,000	$	—27,000
Note payable—Tranche A		~~123~~110,~~750~~025	$	~~135~~120,000
Note payable—Tranche B		~~209~~208,~~887~~805		~~171~~209,~~500~~887
Senior subordinated notes		150,000		150,000
Senior Subordinated Notes		150,000		150,000
Other		16,546		868
Capital lease obligations		15,469		18,971
Total debt		546,183		457,368
Other		17,012		16,657
Less current maturities		20,628		16,958
Total debt and capital lease obligations		585,311		542,515
Total long-term debt	$	525,555	$	440,410
Less current maturities		26,049		27,261
Total long-term debt and capital lease obligations	$	559,262	$	515,254

~~On April 30,~~(6) ~~2002,~~Commitments ~~as part of the financing of the acquisition of CRS, the Company amended its credit agreement to increase Note Payable—Tranche B by $50,000. The incremental facility is subject to the same terms~~ and ~~conditions of the credit agreement.~~ Contingencies

On May 3, 2002, as part of the financing of the acquisition of CRS, the Company issued two 10% notes payable, Seller Note A amounting to $10,000 and Seller Note B amounting to $5,000 (the "Seller Notes"). The Seller Notes are subordinated to the Company's senior debt. Seller Note A is due May 3, 2007. Seller Note B is due May 3, 2012 or May 3, 2007, if certain conditions are met. On a quarterly basis, 50% of the interest on the outstanding principal amount will accrete and be added to the principal amount and 50% will be paid in cash. The amount of accretion at September 30, 2002 was $207 and $104 for Seller Note A and Seller Note B, respectively.

During the second quarter 2002, the Company determined that the revolving credit facility should be classified as a component of long-term debt, due to the nature of its borrowings. The revolving credit facility is a component of the Company's credit agreement that matures in 2006.

(7) Commitments and Contingencies

(a) Litigation

The Company was a defendant in a personal injury suit resulting from a 1996 accident involving one of its agent's drivers. The case was tried in 1998, and the Company was found liable. After appeals, a final judgment ~~remains~~of to$15,229 bewas ~~paid~~rendered asin of2002 ~~September 30,~~and ~~2002~~fully inpaid by the ~~amount~~Company and two of ~~approximately~~its ~~$15,039~~insurers. ~~The~~After certain insurance payments and reimbursements, the Company ~~believes~~has paid $7,637, which the ~~loss~~Company believes is fully ~~covered~~reimbursable by insurance; however, one of the Company's several co-insurers of this case has filed suit, contesting its coverage obligations. If the co-insurer prevails, there is the possibility that asome ~~portion~~or all of the ~~judgment~~payment ~~will~~made ~~be uninsured.~~by ~~The potential uninsured portion of~~ the Company ~~judgment~~will ~~ranges~~not ~~from~~be ~~$0 to approximately $7,200~~reimbursed. The Company has a reserve that it considers appropriate ~~within~~in ~~this~~the ~~range~~circumstances.

The Company has produced and ~~certain~~is ~~subsidiaries~~producing ~~are~~records ~~also~~in ~~defendants~~response to two grand jury subpoenas issued in ~~numerous~~connection ~~lawsuits~~with ~~relating~~an ~~principally~~investigation tobeing ~~motor~~conducted ~~carrier~~by ~~operations.~~attorneys Inin the ~~opinion~~Department of Justice ~~management,~~Antitrust ~~after~~Division ~~consulting~~through a grand jury in the Eastern District of Virginia. The Company is cooperating with ~~its~~the investigation and understands that numerous other companies have received ~~legal~~similar subpoenas.

10 The Company and certain subsidiaries are defendants in numerous lawsuits relating principally to motor carrier operations. In the opinion of management, after consulting with its legal counsel, the amount of the Company's ultimate liability resulting from these matters will not materially affect the Company's financial position, results of operations or liquidity, although such liability may be material to any given quarter.

counsel, the amount of the Company's ultimate liability resulting from these matters will not materially affect the Company's financial position, results of operations or liquidity; however, such liability may be material to any given quarter. 7

(b) Environmental Matters

The Company ishas been named as a potentially responsible party ("PRP") in two environmental cleanup proceedings by federal or state authorities ~~and one additional environmental clean-up proceeding by a group of PRP's~~. The suits are brought under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, or other federal or state statutes. Based on all known information, it is estimated that the settlement cost of each PRP site would not be materially or significantly larger than the ~~litigation~~ reserves established for these proceedings, which totaled $35 as of ~~September~~June 30, ~~2002~~2003 and December 31, ~~2001~~2002, respectively. It is possible that additional claims or lawsuits involving now unidentified environmental sites may arise in the future.

The Company owns or has owned and leases or has leased facilities at which underground storage tanks for diesel fuel are located and operated. Management believes that the Company has taken the appropriate and necessary action with regard to releases of diesel fuel that have occurred. Based on its assessment of the facts and circumstances now known and after consulting with its legal counsel, management believes that it has recorded appropriate estimates of liability for those environmental matters of which the Company is aware. Further, management believes it is unlikely that any identified matters, either individually or in aggregate, will have a material effect on the Company's financial position, results of operations or liquidity. As conditions may exist on these properties related to environmental problems that are latent or undisclosed, there can be no assurance that the Company will not incur liabilities or costs, the amount of which cannot be estimated reliably at this time.

(c) Purchase Commitments

~~On July 1,~~Purchase ~~2002,~~commitments ~~the~~consisted ~~Company entered into a ten year purchase commitment with Covansys Corporation and Affiliated Computer Services, Inc. to provide outsourcing services for 100%~~ of the ~~Company's~~following: information systems infrastructure, including data center operations and telecommunications, and, initially, approximately 50% of application software development. Covansys Corporation is a related party, as approximately 23% of its outstanding common stock is owned by Fund VI, an affiliate of Fund V. As of September 30, 2002, the remaining purchase commitment was $181,246.

The Company has entered into certain purchase commitments primarily for trailers and software licenses in the amount of $5,284 and $9,844 as of September 30, 2002 and December 31, 2001, respectively.

	June 30, 2003		December 31, 2002
Outsourcing agreements	$	172,048	$	176,382
Software licenses		3,169		4,297
Transportation equipment		—		1,608
Other		—		358

	$	175,217	$	182,645

On July 1, 2002, the Company entered into a ten-year purchase commitment with Covansys Corporation and Affiliated Computer Services, Inc. to provide selected outsourcing services for the Company's domestic information systems infrastructure, including data center operations and telecommunications and certain application software development. As of June 30, 2003, the remaining purchase commitment was $167,668. Covansys Corporation is a related party, as approximately 24% of its outstanding common stock is owned by Clayton, Dubilier & Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership ("Fund VI"). As of June 30, 2003, Fund VI held approximately 24% of the capital stock of SIRVA. Fund VI is managed by Clayton, Dubilier & Rice, Inc. a private investment firm that is organized as a Delaware corporation, and is an affiliate of SIRVA's controlling shareholder, Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership.

(7) Operating Segments

Due to the acquisitions in 2002 and a desire to organize the business along new service lines, the Company has realigned certain businesses within its segment structure. Certain reclassifications have been made for the prior periods presented to conform with the June 30, 2003 presentation. As of June 30, 2003 the Company has four reportable segments—1) Relocation Solutions-North America, 2) Relocation Solutions-Europe and Asia Pacific, together forming Global Relocation Solutions, 3) Network Services, and 4) Transportation Solutions. Intersegment transactions, principally relating to international operations, are recorded at market rates as determined by management. The consolidation process results in the appropriate elimination of intercompany transactions, with revenues reflected in the segment responsible for billing the end customer.

Global Relocation Solutions

The Company's Global Relocation Solutions business provides a combination of relocation services, global mobility services and moving and storage services that we tailor by geographic region to the specific needs of our customers. Global Relocation Solutions is comprised of the Relocation Solutions-North America and Relocation Solution-Europe and Asia Pacific reportable segments. This business provides the following services:

•

Relocation Services: Relocation services include realtor services for home sales and purchases, tax and expense management and closing and destination services.

•

Global Mobility Services: These services include assignment management programs, destination services to identify housing, schools, and other critical client needs, as well as expatriate tax and expense management services.

•

Moving and Storage Services:

•: Household Goods: The Company provides worldwide household goods moving and storage services, including sales, packing, loading, transportation, delivery and warehousing. In the U.S. and Canada, moving and storage services are provided through a network of exclusive agents. Outside of the U.S. and Canada, the Company provides these services through a network of company owned branches throughout the U.K., Europe and the Asia Pacific region.
•: Commercial Customers: The Company provides a broad portfolio of services to commercial customers, including office relocations and records management.
•: Transportation of High-Value Products: The Company provides customized solutions to facilitate the movement of high-value products that require specialized transport and handling such as electronics, telecommunications, medical equipment and fine art.

Network Services

The Company is an industry leading provider of a unique combination of value-added services to moving and storage agents, owner-operator drivers and small corporate fleets, including targeted insurance coverages, a broad array of vehicle and supply purchase programs as well as vehicle repair and over the road services.

Transportation Solutions

The Company provides a unique combination of third party logistics transportation solutions designed to benefit a select market niche of customers that require transportation management, inventory visibility at the serialized level, and delivery solutions that are coordinated at the item level to deliver commercial goods that require specialized handling in a timely manner, and with the proper equipment to fit the situation.

The tables below represent information about revenues, income from operations and total assets by segment used by the chief operating decision-maker of the Company:

		Three Months Ended				Six Months Ended
		June 30, 2003		June 30, 2002		June 30, 2003		June 30, 2002
Operating Revenues
Relocation Solutions—North America		$	408,492	$	387,619	$	722,173	$	676,226
Relocation Solutions—Europe and Asia Pacific			105,174		89,440		206,463		181,154

	Global Relocation Solutions		513,666		477,059		928,636		857,380
Network Services			39,060		31,682		74,566		54,066
Transportation Solutions			24,773		28,403		46,660		55,352

Consolidated operating revenues		$	577,499	$	537,144	$	1,049,862	$	966,798

Income from operations
Relocation Solutions—North America		$	12,660	$	14,920	$	13,892	$	10,232
Relocation Solutions—Europe and Asia Pacific			3,016		2,424		6,627		4,964

	Global Relocation Solutions		15,676		17,344		20,519		15,196
Network Services			9,673		5,432		17,732		11,454
Transportation Solutions			843		1,383		363		3,732

Consolidated income from operations		$	26,192	$	24,159	$	38,614	$	30,382

		As of
		June 30, 2003		December 31, 2002
Total assets
Relocation Solutions—North America		$	774,331	$	717,422
Relocation Solutions—Europe and Asia Pacific			425,316		374,794

	Global Relocation Solutions		1,199,647		1,092,216
Network Services			236,649		223,465
Transportation Solutions			20,771		20,282

Consolidated total assets		$	1,457,067	$	1,335,963

(8) Restructuring

In June 2001, the transportation solutions operating segment established a program to exit the parts center business. The charges included severance and employee benefit costs for 293 employees, lease and asset impairment costs to shut down and exit the parts center business by the end of 2001. Due to lease terms and severance agreements, certain facility lease payments will continue through September 2005. During the three and six months ended June 30, 2002, $0.1 million and $0.8 million, respectively, of restructuring credit occurred when the Company was able to sublease certain parts center facilities earlier than originally estimated.

(9) Related Party

The receivable from SIRVA at June 30, 2003 and December 31, 2002 of $31,724 and $28,879, respectively, consists of amounts that the Company has paid on behalf of SIRVA for treasury stock and various transaction fees.

The payable to SIRVA at June 30, 2003 and December 31, 2002 of $20,978 and $32,133, respectively, consists of amounts that the Company has received from the sale of SIRVA redeemable common stock and common stock.

(10) Supplemental Information

The following summarized consolidating balance sheets, statements of operations and statements of cash flows were prepared to segregate such financial statements between those entities that have guaranteed the Company's senior subordinated notes ("Guarantor" entities) and those entities that did not guarantee such debt ("Non-Guarantor" entities).

~~(8)~~ Consolidated condensed ~~Operating~~balance ~~Segments~~ sheet data as of June 30, 2003 and December 31, 2002 is summarized as follows:

Due to the acquisitions described in Note (2), the Company realigned certain businesses within its segment structure and created two additional segments. As of September 30, 2002, the Company has five reportable segments—1) Moving Services-North America, 2) Moving Services-Europe and Asia Pacific, 3) Insurance Services, 4) Relocation Services and 5) Logistics Services. Segments 1) through 4) comprise Global Relocation Services. Intersegment transactions, principally relating to international operations, are recorded at market rates as determined by management. The consolidation process results in the appropriate elimination of intercompany transactions, with revenues reflected in the segment responsible for billing the end customer. Prior period segment information has been restated to reflect these changes.

		June 30, 2003
		(1) Parent		(2) Total Guarantors		Non- guarantors		Eliminations			NAVL Consolidated
Current assets:
	Accounts and notes receivable, net	$	105,038	$	200,206	$	89,925	$	(13,224	)	$	381,945
	Other current assets		39,690		54,869		85,012		(71	)		179,500

Total current assets			144,728		255,075		174,937		(13,295	)		561,445

Property and equipment, net			48,363		19,353		99,170		—			166,886
Goodwill and intangible assets, net			573,279		3,236		—		—			576,515
Other assets			199,596		210,384		467,831		(725,590	)		152,221

Total assets		$	965,966	$	488,048	$	741,938	$	(738,885	)	$	1,457,067

Current liabilities		$	103,012	$	252,057	$	198,583	$	(11,133	)	$	542,519
Long-term debt and capital lease obligations			551,092		216		7,954		—			559,262
Other liabilities			82,138		52,817		—		(9,393	)		125,562

Total liabilities			736,242		305,090		206,537		(20,526	)		1,227,343
Stockholder's equity			229,724		182,958		535,401		(718,359	)		229,724

Total liabilities and stockholder's equity		$	965,966	$	488,048	$	741,938	$	(738,885	)	$	1,457,067

The Moving Services-North America segment provides domestic and international residential moving services, operating as North American Van Lines, Allied Van Lines and Global Van Lines, through a network of exclusive agents. It provides packing, loading, transportation, delivery and warehousing services for any type of household move in the U.S. and Canada and also coordinates these same services for customers on a global basis.

The Moving Services-Europe and Asia Pacific segment, operating principally as Pickfords or Allied Pickfords, operates in the United Kingdom, portions of Europe, Australia, New Zealand and other Asia Pacific locations and provides complete domestic and international moving services. It also provides a full range of office and industrial moving services including records management in most of the aforementioned locations.

The Insurance Services segment provides coverage against loss from certain risks, primarily cargo warehousing, commercial auto physical damage, commercial auto liability and general liability to agents, owner-operators affiliated with the Company and various other parties in the transportation industry. It is comprised of Transguard, a multiple-line property and casualty insurance company, and NAIT, a leading provider of insurance services to independent contract truck drivers.

The Relocation Services segment is comprised of SIRVA Relocation and its wholly owned subsidiaries, which provide comprehensive relocation services nationally to companies and their employees, including home sale services and relocation coordination services.

The Logistics Services segment operates in North America, the United Kingdom and mainland Europe and provides specialized transportation, handling and delivery services to principally electronics, medical equipment and other suppliers of sensitive goods with unique service requirements. It also provides supply chain management solutions including serialized tracking, inventory and stock management, in-transit product merge and configuration and other customized services, principally to customers with unique requirements. It also provides freight forwarding and brokerage services to customers, as well as vehicle and driver services to the Company, agents and owner-operators.

The tables below represent information about revenues, income (loss) from operations and total assets by segment used by the chief decision-makers of the Company:

		December 31, 2002
		(1) Parent		(2) Total Guarantors		Non- guarantors		Eliminations			NAVL Consolidated
Current assets:
	Accounts and notes receivable, net	$	100,220	$	140,764	$	80,518	$	(13,189	)	$	308,313
	Other current assets		35,993		51,739		70,160		(71	)		157,821

Total current assets			136,213		192,503		150,678		(13,260	)		466,134

Property and equipment, net			54,187		22,163		94,480		—			170,830
Goodwill and intangible assets, net			537,836		3,235		15,472		—			556,543
Other assets			289,548		195,438		265,417		(607,947	)		142,456

Total assets		$	1,017,784	$	413,339	$	526,047	$	(621,207	)	$	1,335,963

Current liabilities		$	92,696	$	210,489	$	174,522	$	(11,168	)	$	466,539
Long-term debt and capital lease obligations			505,846		221		9,187		—			515,254
Other liabilities			198,294		25,307		17,006		(107,385	)		133,222

Total liabilities			796,836		236,017		200,715		(118,553	)		1,115,015
Stockholder's equity			220,948		177,322		325,332		(502,654	)		220,948

Total liabilities and stockholder's equity		$	1,017,784	$	413,339	$	526,047	$	(621,207	)	$	1,335,963

		Three Months Ended						Nine Months Ended
		Sept 30, 2002			Sept 30, 2001			Sept 30, 2002		Sept 30, 2001
Revenues
	Moving Services—North America	$	387,975		$	419,307		$	883,341	$	1,026,691
	Moving Services—Europe & Asia Pacific		103,692			94,250			260,215		248,957
	Insurance Services		24,837			12,325			58,164		35,061
	Relocation Services		26,708			582			45,323		1,525
Global Relocation Services			543,212			526,464			1,247,043		1,312,234
Logistics Services			130,957			145,432			393,924		461,325
Consolidated revenues		$	674,169		$	671,896		$	1,640,967	$	1,773,559
Income (loss) from operations
	Moving Services—North America	$	23,075		$	18,808		$	32,924	$	18,442
	Moving Services—Europe & Asia Pacific		12,694			9,379			17,480		17,148
	Insurance Services		6,703			3,172			16,957		10,896
	Relocation Services		4,416			(390	)		6,348		(426	)
Global Relocation Services			46,888			30,969			73,709		46,060
Logistics Services			(1,778	)		497			1,783		(3,293	)
Consolidated income from operations		$	45,110		$	31,466		$	75,492	$	42,767

		As of
		Sept 30, 2002		Dec 31, 2001
Total assets
	Moving Services—North America	$	463,566	$	417,651
	Moving Services—Europe & Asia Pacific		342,269		304,271
	Insurance Services		196,609		142,846
	Relocation Services		169,686		1,215
Global Relocation Services			1,172,130		865,983
Logistics Services			197,114		229,831
Consolidated total assets		$	1,369,244	$	1,095,814

NORTH AMERICAN VAN LINES, INC. Notes to Condensed Consolidated Financial Statements (9Continued) June 30, ~~Restructuring~~2003 (Dollars in thousands) (Unaudited)

~~The following table provides details of restructuring for the nine months ended September~~(10) ~~30,~~Supplemental ~~2002:~~Information (continued)

	Restructuring Accrual as of Dec 31, 2001		Restructuring Credit			Payments			Restructuring Accrual as of Sept 30, 2002
Logistics Parts Centers
Severance cost	$	40	$	—		$	(40	)	$	—
Building leases and other		2,197		(842	)		(524	)		831
Total restructuring cost	$	2,237	$	(842	)	$	(564	)	$	831

Consolidated condensed statements of operations data for the three and six months ended June 30, 2003 and 2002 are summarized as follows:

In June 2001, the Company's Logistics Services operating segment established a program to exit the Parts Center business. The program charges included severance and employee benefit costs for 293 employees, lease and asset impairment costs to shut down and exit the Parts Center business by the end of 2001. Due to lease terms and severance agreements, certain payments will continue through September 2005. During the nine months ended September 30, 2002, the restructuring accrual was reduced when the Company was able to sublease certain Parts Centers facilities earlier than originally estimated. As of September 30, 2002, 293 employees had been terminated.

	Three months ended June 30, 2003
	(1) Parent			(2) Total Guarantors		Non- guarantors			Eliminations			NAVL Consolidated
Operating revenues	$	190,963		$	231,428	$	166,804		$	(11,696	)	$	577,499
Total operating expenses		189,440			218,526		155,037			(11,696	)		551,307

Income from operations		1,523			12,902		11,767			—			26,192
Non-operating income (expense)		823			—		(943	)		—			(120	)
Interest expense (income)		11,538			873		(887	)		1,091			12,615

Income (loss) before income taxes		(9,192	)		12,029		11,711			(1,091	)		13,457
Provision for income taxes		519			322		3,649			—			4,490

Net income (loss)	$	(9,711	)	$	11,707	$	8,062		$	(1,091	)	$	8,967

(10) Supplemental Information

	Three months ended June 30, 2002
	(1) Parent			(2) Total Guarantors		Non- guarantors			Eliminations			NAVL Consolidated
Operating revenues	$	193,179		$	216,881	$	134,458		$	(7,374	)	$	537,144
Total operating expenses		185,644			207,958		126,757			(7,374	)		512,985

Income from operations		7,535			8,923		7,701			—			24,159
Non-operating income (expense)		626			—		(1,300	)		—			(674	)
Interest expense (income)		11,615			975		(2,517	)		2,195			12,268

Income (loss) before income taxes		(3,454	)		7,948		8,918			(2,195	)		11,217
Provision for income taxes		852			1,104		2,252			—			4,208

Net income (loss)	$	(4,306	)	$	6,844	$	6,666		$	(2,195	)	$	7,009

~~Consolidated~~ ~~condensed~~ ~~balance~~ NORTH ~~sheet~~AMERICAN ~~data~~VAN asLINES, INC. Notes ofto ~~September 30,~~Condensed ~~2002~~Consolidated ~~and~~Financial ~~December~~Statements (Continued) June 3130, ~~2001~~2003 (Dollars isin ~~summarized as follows:~~ thousands) (Unaudited)

		September 30, 2002
		(1) Parent		(2) Total Guarantors		Non- guarantors		Eliminations			NAVL Consolidated
Current assets:
	Accounts and notes receivable, net	$	143,641	$	179,880	$	79,359	$	(16,072	)	$	386,808
	Other current assets		61,990		54,936		20,967		(71	)		137,822
Total current assets			205,631		234,816		100,326		(16,143	)		524,630
Property and equipment, net			66,309		22,366		87,161		—			175,836
Goodwill and intangible assets, net			530,172		3,236		—		—			533,408
Other assets			469,292		233,565		221,569		(789,056	)		135,370
Total assets		$	1,271,404	$	493,983	$	409,056	$	(805,199	)	$	1,369,244
Current liabilities		$	169,139	$	235,521	$	107,210	$	(19,368	)	$	492,502
Long-term debt and capital lease obligations			532,005		223		7,555		—			539,783
Other liabilities			153,588		44,779		—		(93,263	)		105,104
Total liabilities			854,732		280,523		114,765		(112,631	)		1,137,389
Stockholder's equity			416,672		213,460		294,291		(692,568	)		231,855
Total liabilities and stockholder's equity		$	1,271,404	$	493,983	$	409,056	$	(805,199	)	$	1,369,244

(10) Supplemental Information (continued)

	Six months ended June 30, 2003
	(1) Parent			(2) Total Guarantors		Non- guarantors			Eliminations			NAVL Consolidated
Operating revenues	$	347,246		$	407,467	$	314,202		$	(19,053	)	$	1,049,862
Total operating expenses		346,377			389,534		294,390			(19,053	)		1,011,248

Income from operations		869			17,933		19,812			—			38,614
Non-operating income (expense)		1,562			—		(1,704	)		—			(142	)
Interest expense (income)		22,981			1,746		(692	)		1,091			25,126

Income (loss) before income taxes		(20,550	)		16,187		18,800			(1,091	)		13,346
Provision (benefit) for income taxes		(3,382	)		516		7,115			—			4,249

Net income (loss)	$	(17,168	)	$	15,671	$	11,685		$	(1,091	)	$	9,097

	Six months ended June 30, 2002
	(1) Parent			(2) Total Guarantors			Non- guarantors			Eliminations			NAVL Consolidated
Operating revenues	$	344,815		$	373,540		$	274,603		$	(26,160	)	$	966,798
Total operating expenses		336,200			365,557			260,819			(26,160	)		936,416

Income from operations		8,615			7,983			13,784			—			30,382
Non-operating income (expense)		1,728			—			(2,036	)		—			(308	)
Interest expense (income)		23,310			(8,554	)		(2,607	)		12,695			24,844

Income (loss) before income taxes		(12,967	)		16,537			14,355			(12,695	)		5,230
Provision (benefit) for income taxes		(4,329	)		1,271			4,586			—			1,528

Net income (loss)	$	(8,638	)	$	15,266		$	9,769		$	(12,695	)	$	3,702

		December 31, 2001
		(1) Parent		(2) Total Guarantors		Non- guarantors		Eliminations			NAVL Consolidated
Current assets:
	Accounts and notes receivable, net	$	118,345	$	92,560	$	63,795	$	(7,588	)	$	267,112
	Other current assets		43,935		21,701		44,619		(294	)		109,961
Total current assets			162,280		114,261		108,414		(7,882	)		377,073
Property and equipment, net			72,523		11,687		81,157		—			165,367
Goodwill and intangible assets, net			409,993		3,236		—		—			413,229
Other assets			279,378		151,257		374,030		(664,520	)		140,145
Total assets		$	924,174	$	280,441	$	563,601	$	(672,402	)	$	1,095,814
Current liabilities		$	152,406	$	138,820	$	122,525	$	(8,454	)	$	405,297
Long-term debt and capital lease obligations			448,225		226		8,325		—			456,776
Other liabilities			82,809		25,199		—		3,943			111,951
Total liabilities			683,440		164,245		130,850		(4,511	)		974,024
Stockholder's equity			240,734		116,196		432,751		(667,891	)		121,790
Total liabilities and stockholder's equity		$	924,174	$	280,441	$	563,601	$	(672,402	)	$	1,095,814

NORTH AMERICAN VAN LINES, INC.

Notes to Condensed Consolidated Financial Statements (Continued)

June 30, 2003

(Dollars in thousands)
(Unaudited)

(10) Supplemental Information (continued)

Consolidated condensed statements of cash flows data for the six months ended June 30, 2003 and 2002 are summarized as follows:

		Six months ended June 30, 2003
		(1) Parent			(2) Total Guarantors			Non- guarantors			NAVL Consolidated
Net cash provided by (used for) operating activities		$	(33,616	)	$	9,744		$	11,247		$	(12,625	)

Cash flows from investing activities:
	Additions of property and equipment		(786	)		(3,426	)		(5,482	)		(9,694	)
	Proceeds from sale of property and equipment		394			76			440			910
	Purchases of investments		—			—			(44,876	)		(44,876	)
	Proceeds from maturity or sale of investments		—			—			39,251			39,251
	Acquisitions, net of cash acquired		(7,263	)		1,362			(24,835	)		(30,736	)
	Other investing activities		(637	)		(1,231	)		—			(1,868	)

Net cash used for investing activities			(8,292	)		(3,219	)		(35,502	)		(47,013	)

Cash flows from financing activities:
	Borrowings on revolving credit facilities and relocation financing facilities, net		57,000			—			21,932			78,932
	Change in balance of outstanding checks		4,348			485			(495	)		4,338
	Borrowings on long-term debt		163			—			—			163
	Repayments on long-term debt and capital lease obligations		(13,678	)		—			(1,377	)		(15,055	)

Net cash provided by financing activities			47,833			485			20,060			68,378

Effect of translation adjustment on cash						—			1,995			1,995

Net increase (decrease) in cash and cash equivalents			5,925			7,010			(2,200	)		10,735
Cash and cash equivalents at beginning of period			4,280			10,849			27,791			42,920

Cash and cash equivalents at end of period		$	10,205		$	17,859		$	25,591		$	53,655

~~Consolidated~~ ~~condensed~~ ~~statements~~ NORTH ofAMERICAN ~~operations~~VAN ~~data~~LINES, INC. Notes ~~for~~to ~~the~~Condensed ~~nine~~Consolidated ~~months~~Financial ~~ended September~~Statements June 30, ~~2002~~2003 (Dollars ~~and~~in ~~2001 are summarized as follows:~~ thousands) (Unaudited)

	Nine months ended September 30, 2002
	(1) Parent			(2) Total Guarantors			Non- guarantors			Eliminations			NAVL Consolidated
Operating revenues	$	581,564		$	649,164		$	449,847		$	(39,608	)	$	1,640,967
Total operating expenses		565,030			620,718			419,335			(39,608	)		1,565,475
Income from operations		16,534			28,446			30,512			—			75,492
Non-operating income (expense) and minority interest		2,556			—			(2,872	)		—			(316	)
Income before interest, income taxes and accounting change		19,090			28,446			27,640			—			75,176
Interest expense (income)		35,652			(7,541	)		(2,127	)		12,695			38,679
Income (loss) before income taxes and accounting change		(16,562	)		35,987			29,767			(12,695	)		36,497
Provision for income taxes		3,190			4,054			6,326			—			13,570
Net income (loss)	$	(19,752	)	$	31,933		$	23,441		$	(12,695	)	$	22,927

(10) Supplemental Information (continued)

		Nine months ended September 30, 2001
			Six months ended June 30, 2002
		~~(1) Parent~~	(1) Parent		~~(2) Total Guarantors~~	(2) Total Guarantors		~~Non- guarantors~~	Non- guarantors		~~Eliminations~~	NAVL Consolidated		~~NAVL Consolidated~~
Operating revenues		$	651,836		$	712,966		$	443,051		$	(34,294	)	$	1,773,559
Net cash provided by operating activities			$	14,044		$	16,073		$	2,216		$	32,333
Total operating expenses			653,011			702,889			409,420			(34,528	)		1,730,792
Cash flows from investing activities:
Income (loss) from operations			(1,175	)		10,077			33,631			234			42,767
	Additions of property and equipment			(2,360	)		(5,516	)		(9,538	)		(17,414	)
Non-operating income (expense) and minority interest			(89	)		(100	)		386			—			197
	Proceeds from sale of property and equipment			763			1,161			649			2,573
Income (loss) before interest and income taxes			(1,264	)		9,977			34,017			234			42,964
	Purchases of investments			—			—			(28,054	)		(28,054	)
Interest expense (income)			(29,314	)		(7,428	)		(4,937	)		89,764			48,085
	Proceeds from maturity or sale of investments			—			—			35,237			35,237
Income (loss) before income taxes			28,050			17,405			38,954			(89,530	)		(5,121	)
	Acquisitions, net of cash acquired			(82,867	)		—			—			(82,867	)
Provision (benefit) for income taxes			(7,940	)		361			6,279			—			(1,300	)
	Other investing activities			(854	)								(854	)
Income (loss) before accounting change			35,990			17,044			32,675			(89,530	)		(3,821	)
Net cash used for investing activities				(85,318	)		(4,355	)		(1,706	)		(91,379	)
Cumulative effect of accounting change, net of tax			—			—			328			—			(328	)
Cash flows from financing activities:
Net income (loss)		$	35,990		$	17,044		$	32,347		$	(89,530	)	$	(4,149	)
	Repayments on revolving credit facility, net			(5,000	)		—			—			(5,000	)
	Change in balance of outstanding checks			(1,399	)		(3,142	)		(2,537	)		(7,078	)
	Borrowings on long-term debt			50,403			—			—			50,403
	Repayments on long-term debt and capital lease obligations			(23,413	)		—			(1,045	)		(24,458	)
	Capital contribution from SIRVA			56,500			—			—			56,500
Net cash provided by (used for) financing activities				77,091			(3,142	)		(3,582	)		70,367
Effect of translation adjustment on cash				—			—			436			436
Net increase (decrease) in cash and cash equivalents				5,817			8,576			(2,636	)		11,757
Cash and cash equivalents at beginning of period				5,687			4,054			22,378			32,119
Cash and cash equivalents at end of period			$	11,504		$	12,630		$	19,742		$	43,876

~~Consolidated condensed~~(10) Supplemental ~~statements~~Information ~~of cash flows data for the nine months ended September 30, 2002 and 2001 are summarized as follows:~~ (continued)

(1): Parent includes the accounts of North American Van Lines, Inc., a Delaware corporation and the issuer of the debt.
(2): Total Guarantors include the accounts of the following direct or indirect subsidiaries of North American Van Lines, Inc. or its subsidiary, Allied Van Lines, Inc.:

			Nine months ended September 30, 2002
Name		Incorporated
			(1) Parent			(2) Total Guarantors			Non- guarantors			NAVL Consolidated
A Relocation Solutions Management Company		Delaware
Net cash provided by operating activities			$	21,435		$	19,110		$	6,193		$	46,738
Allied Freight Forwarding, Inc.		Delaware
Cash flows from investing activities:
Allied International N.A., Inc.		Delaware
	Additions of property and equipment			(3,002	)		(6,145	)		(15,769	)		(24,916	)
Allied Transportation Forwarding, Inc.		Delaware
	Proceeds from sale of property and equipment			641			1,241			454			2,336
Allied Van Lines, Inc.		Delaware
	Purchases of investments			—			—			(43,522	)		(43,522	)
Allied Van Lines Terminal Company		Delaware
	Proceeds from maturity or sale of investments			—			—			45,627			45,627
Federal Traffic Service, Inc.		Indiana
	Acquisitions			(82,707	)		—			(3,455	)		(86,162	)
Fleet Insurance Management, Inc.		Indiana
	Other investing activities			(505	)		(743	)		—			(1,248	)
FrontRunner Worldwide, Inc.		Delaware
Net cash used for investing activities				(85,573	)		(5,647	)		(16,665	)		(107,885	)
Global Van Lines, Inc.		Indiana
Cash flows from financing activities:
Great Falls North American, Inc.		Montana
	Borrowings on revolving credit facilities and notes payable, net			3,000			—			2,407			5,407
Meridian Mobility Resources, Inc.		Delaware
	Change in balance of outstanding checks			(6,254	)		(2,460	)		301			(8,413	)
NACAL, Inc.		California
	Borrowings on long-term debt			50,403			—			—			50,403
National Association of Independent Truckers, LLC		Delaware
	Principal payments on long-term debt			(23,065	)		(7	)		—			(23,072	)
North American Logistics, Ltd.		Indiana
	Capital contribution from SIRVA			56,500			—			—			56,500
North American Van Lines of Texas, Inc.		Texas
	Other financing activities			(5,662	)		—			(1,815	)		(7,477	)
SIRVA Freight Forwarding, Inc.		Indiana
Net cash provided by (used for) financing activities				74,922			(2,467	)		893			73,348
SIRVA Global Relocation, Inc.		Delaware
Effect of translation adjustment on cash				—			—			918			918
SIRVA Imaging Solutions, Inc. (formerly known as Relocation Management Systems, Inc.)		Delaware
Net increase (decrease) in cash and cash equivalents				10,784			10,996			(8,661	)		13,119
SIRVA Relocation LLC		Delaware
Cash and cash equivalents at beginning of period				5,687			4,054			22,378			32,119
SIRVA Title Agency, Inc.		Ohio
Cash and cash equivalents at end of period			$	16,471		$	15,050		$	13,717		$	45,238
StorEverything, Inc.		Delaware
Vanguard Insurance Agency, Inc.		Illinois

Each Guarantor is a wholly owned subsidiary of North American Van Lines, Inc. or its subsidiary, Allied Van Lines, Inc. and jointly and severally, irrevocably and fully and unconditionally guarantees the punctual payment of such debt issued under North American Van Lines, Inc.'s senior credit facility and senior subordinated notes.

		Nine months ended September 30, 2001
		(1) Parent			(2) Total Guarantors			Non- guarantors			NAVL Consolidated
Net cash provided by (used for) operating activities		$	40,545		$	(11,064	)	$	21,565		$	51,046
Cash flows from investing activities:
	Additions of property and equipment		(18,263	)		(645	)		(14,746	)		(33,654	)
	Proceeds from sale of property and equipment		1,964			439			1,513			3,916
	Purchases of investments		—			—			(61,349	)		(61,349	)
	Proceeds from maturity or sale of investments		—			—			58,132			58,132
	Other investing activities		(1,154	)		—			—			(1,154	)
Net cash used for investing activities			(17,453	)		(206	)		(16,450	)		(34,109	)
Cash flows from financing activities:
	Repayments on revolving credit facilities and notes payable, net		(12,400	)		—			(440	)		(12,840	)
	Change in balance of outstanding checks		(774	)		7,100			(11,448	)		(5,122	)
	Principal payments on long-term debt		(8,850	)		—			—			(8,850	)
	Other financing activities		(1,594	)		100			—			(1,494	)
Net cash provided by (used for) financing activities			(23,618	)		7,200			(11,888	)		(28,306	)
Effect of translation adjustment on cash			—			—			286			286
Net decrease in cash and cash equivalents			(526	)		(4,070	)		(6,487	)		(11,083	)
Cash and cash equivalents at beginning of period			2,027			12,519			28,963			43,509
Cash and cash equivalents at end of period		$	1,501		$	8,449		$	22,476		$	32,426

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Overview

Due to the acquisitions in 2002 and a desire to organize the business along new service lines, the Company has realigned certain businesses within its segment structure.

Our operating revenues are derived from the following four business segments: (1) our relocation solutions—North America segment, (2) our relocation solutions—Europe and Asia Pacific segment, combining to form global relocation solutions, (3) our network services segment, and (4) our transportation solutions segment.

We are an industry leading provider of a unique combination of global relocation solutions to corporate clients, the government and military and consumer markets. We deliver these relocation services through a number of well recognized brands, using on extensive global network of corporate locations, agent facilities, licensed affiliates, owner-operators, and over 7,000 employees and service coordinators located in 40 countries across four continents. We are also a market leading provider of network solutions, such as insurance and fleet programs, to the extensive network of agents and owner operators who are affiliated with us, as well as to independent third parties in need of the same services. We are also a leading provider of unique transportation management solutions, utilizing our extensive logistics software capabilities, to the third party logistics market which requires sensitive handling, serialized inventory and in-transit merge services.

Global Relocation Solutions—We are an industry leading provider of a unique combination of global relocation solutions to corporate clients, the government and military and consumer markets.

Through SIRVA Relocation, we offer our customers one point connectivity to service their relocation needs. SIRVA Relocation has five offices in the U.S., as well as service centers in the U.K., Australia and Hong Kong. Each regional center offers solutions tailored to its local markets, including realtor services for home sale and purchase, tax and expense management, closing and destination services, as well as household goods moving services, 24x7 web communication interface, and comprehensive, single source reporting packages for the client as well as the person relocating.

SIRVA Relocation also offers global mobility services, utilizing our company's relocation centers in each regional theater along with qualified local representatives to provide global service capability. We offer assignment management programs, moving and storage services, destination services to identify housing, schools, and other critical client needs, as well as expatriot tax and expense management services.

Global relocation solutions also provides worldwide household goods moving and storage services, utilizing distinctive and well known local brand names that include Allied Van Lines, northAmerican Van Lines and Global Van Lines in the U.S. and Canada, Pickfords, Hoult, Maison Huet, Arthur Pierre, Adam, Kungsholms, and Varekamp in the U.K. & Europe as well as Allied Pickford, Allied International and Trans-International in the Asia/Pacific region.

In the U.S. and Canada, we provide domestic moving and storage services through a network of exclusive agents who provide elements of the sales, packing, loading, transportation, delivery and warehousing services. Utilizing our fleet of specialized equipment and highly trained drivers and owner-operators, we also operate a specialized transportation services division that provides configurable transportation capabilities to customers, such as those in the high-tech, medical equipment and telecommunications markets, that need specialized handling of sensitive, high-value commodities.

This same agent based network, along with our corporate sales and marketing group, also markets to multi-national companies, most often based in the U.S., a range of international moving and storage services as well as coordination for residential shipments destined to or returning from foreign countries.

Name		Incorporated
A Relocation Solutions Management Company		Delaware
Allied Freight Forwarding, Inc.		Delaware
Allied International N.A., Inc.		Delaware
Allied Transportation Forwarding, Inc.		Delaware
Allied Van Lines, Inc.		Delaware
Allied Van Lines Terminal Company		Delaware
Corporate Transfer Service, Inc.		Minnesota
CRS Acquisition Corp.		Delaware
Federal Traffic Service, Inc.		Indiana
Fleet Insurance Management, Inc.		Indiana
FrontRunner Worldwide, Inc.		Delaware
Global Van Lines, Inc.		Indiana
Great Falls North American, Inc.		Montana
Meridian Mobility Resources, Inc.		Delaware
NACAL, Inc.		California
National Association of Independent Truckers, LLC		Delaware
North American Logistics, Ltd.		Indiana
North American Van Lines of Texas, Inc.		Texas
ProSource Properties, Ltd.		Ohio
Relocation Management Systems, Inc.		Delaware
SIRVA Freight Forwarding, Inc.		Indiana
(formerly known as NAVTRANS International Freight Forwarding, Inc.)
SIRVA Relocation LLC		Delaware
SIRVA Title Agency, Inc.		Ohio
(formerly known as CRS Title Agency, Inc.)
StorEverything, Inc.		Delaware
U.S. Relocation Services, Inc.		Delaware
Vanguard Insurance Agency, Inc.		Illinois

We utilize our branded network, or a group of qualified and authorized affiliate representatives around the world to complete the service delivery process.

~~Each~~ In ~~Guarantor~~the ~~(other~~U.K. ~~than~~and ~~SIRVA~~Europe ~~Title~~as ~~Agency~~well as the Asia/Pacific region, ~~Inc.)~~we isprimarily provide moving and storage services through a ~~wholly~~network of company owned ~~subsidiary~~branches operating under one of ~~North~~the recognized ~~American~~local ~~Van~~brand ~~Lines, Inc~~names. orThese ~~its~~owned ~~subsidiary,~~and ~~Allied~~operated ~~Van~~facilities ~~Lines, Inc.~~provide ~~and~~complete ~~jointly~~domestic and ~~severally~~international residential moving services, ~~irrevocably~~ ~~and~~including ~~fully~~sales, packing, loading, transportation, delivery and ~~unconditionally~~warehousing. ~~guarantees~~The ~~the~~operations ~~punctual~~in ~~payment~~these regions also provide various types of ~~debt~~office ~~issued~~relocation ~~under~~services ~~North~~as ~~American~~well ~~Van~~as records ~~Lines,~~management ~~Inc~~storage and services in their local markets.'s ~~senior~~We ~~credit~~also ~~facility~~operate ~~and~~a ~~senior~~specialized ~~subordinated~~transportations ~~notes~~services network in the U.K. and Europe region.

Network Services—We are an industry leading provider of a unique combination of network solutions to moving and storage agents, owner-operator drivers and small corporate fleets.

Through the companies comprising our SIRVA Insurance unit, we offer the moving and storage business and operators of small trucking fleets, one point connectivity to service their varying insurance needs. We offer a range of products which includes auto liability, occupational accident, physical damage, cargo and warehouse insurance coverages. We reinsure certain coverages with other insurance carriers to optimize our spread of product risk.

Through Transguard General Agency, Inc., we offer the members of the National Association of Independent Truckers ("NAIT"), the largest association of independent truck drivers in the country, a similar package of insurance products and other services that assist the drivers in conducting their daily business.

Through SIRVA Fleet Services, we offer a broad array of vehicle and supply purchase programs as well as vehicle repair and over-the-road services. We combine the purchasing power of our affiliated agent and driver network and offer our clients coordinated programs at a cost advantage.

Transportation Solutions—We are an industry leading provider of a unique combination of third party logistics transportation management solutions designed to benefit a select market niche of customers that requires transportation management, inventory visibility at the serialized level and delivery solutions that are coordinated at the item level to deliver commercial goods that require specialized handling in a timely manner, and with the proper equipment to fit the situation. Our SIRVA Logistics unit utilizes specialized software solutions to provide the range of services that our clients require.

Business Trends and Initiatives

In 2002, we established the strategic objective of dramatically expanding our presence in the corporate relocation market. In May 2002, we acquired the relocation services business ("CRS") of Cooperative Resource Services Ltd., a U.S. based relocation services provider that was approximately the third largest provider of such services in the U.S. market. We also acquired Prime Relocation in Australia, establishing a Pacific relocation center, which was supplemented by the opening in Hong Kong of an Asia relocation center in early 2003. In connection with the CRS acquisition, SIRVA acquired CMS Holding, the mortgage lending arm of the CRS group, adding mortgage services to our relocation offering. In July of 2002, we acquired Rowan Simmons, the largest local provider of relocation services in the U.K. These acquisitions have established for us a worldwide footprint from which to provide global relocation services. The strategy has been enhanced by the recent combination of the relocation and moving sales forces so that our marketing approach can incorporate our expansive list of moving clients and begin to offer a broader platform of services to our clients' human resource function.

We have continued to expand our household goods moving and storage services operations through acquisitions around the world. After completing the acquisition of NFC Moving Services Group from Exel plc in 1999, which substantially expanded our scope of operations in the U.S., the U.K., Europe and the Asia Pacific region, we acquired Global Van Lines in the U.S. and Allied Movers in New Zealand in 2000.

In 2002, ~~MANAGEMENT'S~~we ~~DISCUSSION~~acquired ~~AND~~Prime ~~ANALYSIS~~International OFin ~~FINANCIAL~~Australia, ~~CONDITION AND~~Total ~~RESULTS~~Recall OFin ~~OPERATIONS~~ the U.K. and Maison Huet in France. In June 2003, we acquired Scanvan, the leading moving services company in the Scandinavian market.

~~Overview~~ Our network services segment operates in specific niche markets related to transportation and moving and storage. In 2002, our insurance operations nearly doubled their base of written premiums with the acquisition of the business of NAIT, which focuses on servicing the substantial community of owner/operator drivers with professional and support services, including insurance.

~~On July 29, 2002, RS Acquisition, LLC, a subsidiary of SIRVA, Inc. ("SIRVA"), our parent, acquired The Rowan Group PLC (UK) and Rowan Simmons Conveyancing Limited~~We ~~(UK)~~have ~~(together~~been ~~"Rowan~~successful ~~Simmons"),~~at asmoothly ~~U.K.~~integrating ~~based~~these ~~provider~~acquisitions ~~of relocation services, including home sale~~ and ~~purchase~~will ~~assistance,~~continue ~~management of tenant responsibilities, and other services~~ to ~~corporations that~~pursue ~~assist~~additional ~~employees~~transactions inaround ~~their relocation needs, for approximately $14.0 million. The purchase price was funded from~~ the ~~proceeds~~world ofthat ~~a loan from Fleet National Bank. Under the terms of a purchase agreement with RS Acquisition, LLC,~~ we ~~agreed~~believe towould ~~acquire~~further ~~Rowan~~strengthen ~~Simmons, excluding the homes inventory and associated mortgage liabilities, from RS Acquisition, LLC within six months from the~~our ~~date~~global ofpresence ~~purchase~~or ~~for~~would ~~approximately~~advance ~~$14.0 million.~~our ~~Since~~strategic ~~the~~position ~~acquistion~~in ~~will be between entities under common control,~~ the ~~transaction~~markets ~~will~~that bewe ~~accounted for in a manner similar to a pooling-of-interests~~serve.

OnWe ~~May 3,~~have ~~2002,~~also ~~SIRVA,~~pursued ~~through~~a ~~two~~number ~~wholly~~of long-~~owned~~term ~~subsidiaries,~~initiatives ~~purchased~~designed ~~the business ("CRS") conducted by Cooperative Resource Services, Ltd. that provides comprehensive relocation services~~ to ~~companies~~improve ~~and~~productivity ~~their employees, including home sale services, relocation coordination services~~ and ~~mortgage lending services~~profitability. ~~One~~We ofhave ~~these~~invested ~~two~~significant ~~subsidiaries,~~amounts ~~SIRVA~~in ~~Relocation~~information ~~LLC~~technology ~~("SIRVA~~solutions ~~Relocation"),~~in ~~which~~order weto ~~own~~enhance ~~directly,~~operational ~~purchased all of such business' assets~~ and ~~equity~~administrative ~~other than the equity relating to certain mortgage lending operations of the seller~~efficiencies. ~~The~~We ~~mortgage~~have ~~lending operations~~also ofinitiated ~~the~~several ~~seller~~restructuring ~~were~~projects ~~purchased~~over by the ~~other~~last ~~subsidiary,~~few ~~CMS~~years ~~Holding LLC ("CMS Holding"), which is directly owned by SIRVA. The mortgage lending operations share common customers with the other operations of SIRVA Relocation. Subject~~ to ~~certain~~streamline ~~adjustments,~~management ~~the combined cash purchase price for the acquisitions was approximately $60.0 million~~structures, ~~of which $3.5 million was~~integrate paid for the assets of the mortgage lending operations. Approximately $45.0 million of the cash purchase price was paid in cash and $15.0 million (non-cash) was paid in notes issued by us, of which $10.0 million is due in 2007 and $5.0 million is due in 2012 or 2007 if certain conditions are met. In addition, certain liabilities relating to the acquired ~~business were assumed in connection with the acquisition~~businesses, ~~including~~reshape ~~$26.6 million~~service ofdelivery ~~indebtedness under a revolving credit facility used to fund the mortgage lending~~ operations, ~~which~~reduce ~~was~~general assumed by CMS Holding. The cash purchase price for the acquisition, as well as approximately $24.1 million of other indebtedness of the acquired business that was refinanced as part of the acquisition, were financed with the proceeds of $36.5 million of cash contributions from SIRVA. SIRVA obtained those proceeds from the sale of its common stock to Clayton, Dubilier & Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership managed by Clayton Dubilier and ~~Rice, Inc.~~administrative ~~("Fund VI")~~headcount and anexit ~~affiliate~~under-performing ofbusiness ~~Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership ("Fund V"), the controlling shareholder of SIRVA, and the incurrence of $50~~units.~~0 million~~ ofWe ~~additional~~believe ~~senior~~that ~~indebtedness.~~these ~~The~~efforts ~~cost~~have ~~to acquire CRS has~~ been ~~preliminarily~~instrumental ~~allocated to the assets acquired and~~in ~~liabilities~~reducing ~~assumed~~our ~~according~~costs ~~to estimated fair values~~ and ispositioning ~~subject~~us towell ~~adjustment~~for ~~when~~continued ~~additional~~profitable ~~information~~growth, ~~concerning~~although ~~asset~~no ~~and~~assurance ~~liability~~can ~~valuations~~be isgiven ~~finalized. The preliminary allocation has resulted~~ in ~~acquired~~this ~~goodwill of $83~~regard.~~7 million.~~

OnFor ~~April 12, 2002, we purchased~~ the ~~business~~three ~~("NAIT")~~and ~~conducted~~six bymonths ~~the~~ending ~~National Association of Independent Truckers, a leading provider of insurance services to independent contract truck drivers, for approximately $25.4~~June ~~million in cash~~30, ~~$3.6 million in assumed net liabilities, a deferred amount of $3.0 million payable subject to the completion of certain operating performance objectives during 2002 and~~ 2003 and an2002 ~~actuarially~~insurance ~~determined amount to be paid during 2003~~ and ~~2004,~~claims ~~based~~expense onhas ~~the~~been ~~ultimate~~reclassified ~~losses~~as ~~incurred~~a ~~with~~component ~~respect~~of toother ~~policies issued~~direct ~~during the year ended December 31, 2001~~expense. ~~NAIT~~Other isindirect anexpense ~~association of more than 11,000 independent contract truck drivers that provides its members with occupational accident, physical~~has ~~damage~~been ~~and~~reclassified ~~non-trucking liability insurance,~~ as ~~well as access to~~ a ~~suite~~component of ~~professional~~general ~~services. The purchase price was funded from the sale of securities~~ and ~~existing~~administrative ~~cash balances and $20~~expenses.~~0 million~~ ofThe ~~cash~~changes ~~contributions~~were ~~from~~made ~~SIRVA.~~to ~~SIRVA~~be ~~obtained~~more ~~those~~reflective ~~proceeds~~of ~~from~~ the ~~sale~~Company's ofcurrent ~~its~~business ~~common stock to Fund VI~~operations. The ~~cost~~changes toresult ~~acquire~~in ~~the~~a ~~NAIT~~different determination ~~assets~~of ~~has~~gross ~~been~~margin ~~preliminarily~~than ~~allocated to~~previously ~~the~~shown.

Results of Operations

Operating Revenues: Our operating revenues are derived from our global relocation solutions, network services and transportation solutions operations.

Operating revenues of our global relocation solutions segments are comprised of amounts billed to our customers, both corporate and consumers, upon the completion of transportation or relocation services. These include the provision of relocation and global mobility services such as home sale and purchase, realty and mortgage assistance, as well as comprehensive moving and storage services both at origin and destination. In addition we earn revenues from the provision of specialized transportation services for high value products that require unique handling capabilities for our corporate clients.

Operating revenues from our network services segment include premiums received for the provision of insurance coverage such as auto liability, occupational accident, physical damage, and cargo and warehouse insurance coverage. Our revenues also include fees charged to the independent drivers in our association for access to a suite of services that includes fuel, cell phone, tire services, legal assistance and retirement programs, and the provision of maintenance and repair services.

In our transportation solutions segment our revenue represents charges for the provision of inventory management expertise to coordinate a variety of services such as purchased transportation, order fulfillment, project-specific delivery management, and the tracing of products through the customer's supply chains.

Purchased Transportation Expenses: Purchased transportation expenses ("PTE") represent amounts paid by us to independent third parties, such as agents and owner operators, for providing capabilities for the fulfillment of our customer moving and transportation needs.

In our relocation services—North America operations, PTE consists of amounts paid in respect of owner/operator transportation services; packing and loading service fees as well as associated assessorial

services; ~~assets~~agent ~~acquired~~commissions ~~and~~associated ~~liabilities~~with ~~assumed~~in-home ~~according~~estimates, tocustomer ~~estimated~~service, ~~fair~~storage ~~values~~services, and isother ~~subject~~third toparty ~~adjustment~~transportation ~~when additional information concerning asset and liability valuations is finalized~~services. ~~The preliminary allocation has resulted in acquired goodwill of $33.5 million.~~

~~Due~~In ~~to these acquisitions, we have realigned certain businesses within~~ our ~~segment~~Relocation ~~structure and created two additional segments. Our operating revenues are derived from the following five business segments: (1) our moving services~~Services—~~North America segment, (2)~~Europe ~~our~~& ~~moving services—Europe and~~ Asia Pacific ~~segment~~, ~~(3) our~~PTE ~~insurance~~consists ~~services, (4) our~~of ~~relocation~~amounts ~~services,~~paid ~~and~~to ~~(5) our~~third ~~logistics~~parties ~~services. Segments (1) through (4) comprise global relocation services. Our operating income and cash flow from operations are influenced by industry volume and market share as well as selling prices~~ for ~~our~~supplemental ~~services. Additionally~~transportation, ~~they~~packing ~~are impacted by the availability~~ and ~~cost~~loading ofservices associated ~~hauling~~with ~~capacity~~providing ~~and~~comprehensive bymoving ~~a number of significant business, economic~~ and ~~competitive~~transportation ~~factors, many of which are not within our control~~services.

~~Our~~In ~~moving~~our ~~services—North~~transportation ~~America~~solutions segment ~~operates under the northAmerican~~, ~~Allied~~PTE ~~and~~consists ~~Global brand names and provides two types~~ of ~~moving~~amounts ~~services:~~paid ~~(1) domestic, which provides residential moving services~~ in ~~the~~respect ~~United States and Canada through a network~~ of ~~exclusive~~owner/operator ~~agents who provide the sales, packing, loading,~~ transportation, ~~delivery and warehousing~~ services; ~~and~~as ~~(2) international,~~well ~~which~~as ~~primarily~~providing ~~markets~~specialized tohandling ~~multi-national companies most often based in the United States~~ and ~~provides or coordinates moving services for~~delivery residential shipments destined to or originating in foreign countries using our exclusive agent network in North America and authorized representatives around the world to complete the service offeringcapabilities.

~~Our~~Given ~~moving~~the ~~services—Europe~~structure ~~and~~of ~~Asia~~our ~~Pacific~~model ~~segment operates~~ in ~~the~~North ~~United Kingdom~~America, ~~Europe,~~which ~~Australia~~utilizes ~~and~~independent ~~Asia~~agents ~~Pacific~~and ~~through~~owner/operators ato ~~network~~provide oftransportation ~~company-owned~~capabilities, ~~branches~~including ~~that utilize~~trucks ~~the~~and ~~Pickfords~~trailers, oras ~~Allied~~well ~~Pickfords~~as warehouse ~~brand~~facilities ~~names~~for ~~among~~storage ~~others. This segment provides complete domestic~~ and ~~international~~delivery ~~residential~~programs, ~~moving~~a ~~and~~higher ~~relocation~~proportion ~~services,~~of ~~including~~overall ~~sales,~~costs ~~packing, loading,~~are ~~transportation,~~represented ~~delivery~~by ~~and~~PTE ~~warehousing.~~when Itcompared ~~also~~to ~~provides~~our ~~records~~operations ~~management~~in ~~and~~Europe ~~office~~ and ~~industrial~~Asia ~~relocation services~~Pacific.

~~Our insurance~~Other ~~services~~Direct ~~segment~~Expenses: Other ~~provides~~direct ~~coverage~~expenses ~~against~~comprise ~~loss~~facility ~~from~~and ~~certain~~equipment ~~risks~~costs, ~~primarily~~employee ~~cargo~~labor ~~warehousing~~costs, ~~commercial~~commissions ~~auto~~paid ~~physical damage, commercial auto liability and general liability~~ to ~~agents~~ realtors, ~~owner-operators~~home ~~affiliated~~closing ~~with~~costs us and ~~various~~ other ~~parties~~relocation inservice ~~the~~fees ~~transportation~~in ~~industry.~~addition Itto isclaims ~~comprised~~expenses ofassociated ~~Transguard,~~with acargo ~~multiple-line~~loss ~~property~~ and ~~casualty~~damage ~~insurance company,~~as ~~and~~well ~~NAIT,~~as aclaims ~~leading~~associated ~~provider~~with ofour ~~insurance~~other ~~services~~various ~~to independent contract truck drivers~~insurance offerings.

~~Our~~General and Administrative Expenses: General and administrative expenses comprise employee compensation and benefit costs, ~~relocation~~which ~~services~~account ~~segment~~for isover ~~comprised~~50% of ~~SIRVA~~general ~~Relocation~~ and ~~its~~administrative ~~wholly-owned~~expenses, ~~subsidiaries~~as well as communication costs, ~~which~~rent, ~~provide~~supplies ~~comprehensive~~and ~~relocation~~other purchased services. ~~nationally~~In toaddition, ~~companies~~general and ~~their employees,~~administrative ~~including~~expenses ~~home~~include amortization ~~sale~~expense ~~services~~in ~~and~~respect ~~relocation~~of ~~coordination~~certain ~~services~~intangible assets.

Our logistics services segment consists of (1) logistics solutions, which includes finished goods distribution, order fulfillment, project-specific delivery management and the tracking of products through the supply chain, with a focus on high-value products; (2) specialized transportation services, which facilitates the movement of computers, electronics, telecommunications and medical equipment, trade show exhibition materials, fine art and other products that require specialized transportation, distribution or delivery solutions; (3) network services, which provides freight forwarding and brokerage services to customers, as well as vehicle and driver services to agents and owner-operators; and (4) European operations, which handle logistics solutions and specialized transportation of high-value products to and from major cities in the United Kingdom and Europe.

The following is a review of the more significant accounting policies and methods used by us:

Revenue recognition: We recognize estimated gross revenue to be invoiced to the transportation customer and all related transportation expenses on the date a shipment is delivered or services are completed. The estimate of revenue remains in a receivable account called Delivered Not Processed ("DNP") until the customer is invoiced. Concurrent with the DNP estimate, we recognize an accrual for Purchased Transportation Expenses ("PTE") to account for the estimated costs of packing services,

~~transportation~~Three ~~expenses~~Months ~~and~~Ended ~~other~~June 30, ~~such~~2003 ~~costs~~Compared ~~associated~~to ~~with~~Three ~~the~~Months ~~service~~Ended ~~delivery.~~June 30, ~~The estimate for PTE is not reversed until we receive actual charges~~2002.

~~Within the~~The ~~relocation~~following ~~services~~table ~~segment,~~sets ~~corporate~~forth ~~fee~~certain ~~income~~figures ~~consists~~regarding our results of ~~fees~~operations for ~~relocation~~the ~~services.~~three ~~Relocation~~months ~~services~~ended ~~are~~June 30, ~~billed~~2003, compared to ~~corporate customers at either a fixed price per transferred employee or based upon a fixed percentage of~~ the ~~home's~~three ~~selling price. Relocation services provided at a fixed fee per transferred employee are recognized when services are performed.~~months ~~Corporate~~ended ~~fee~~June 30, ~~income is recognized as revenue at the date a commitment is received from the ultimate buyer to purchase the home~~2002.

Insurance reserves: We estimate costs relating to cargo damage and delay claims based on actuarial methods and our history of loss data, which approximates 10 years. Our multiple-line property and commercial liability insurance group sets its reserve rates based on a percentage of earned premium. The percentage is based on historical data, run rates and actuarial methods.

		Three Months Ended June 30, 2003		Three Months Ended June 30, 2002			% Increase (Decrease) from Prior Period(a)
		(Dollars in millions)
Operating revenues:
	Relocation Solutions—North America	$	408.5	$	387.6		5.4	%
	Relocation Solutions—Europe and Asia Pacific		105.1		89.4		17.6	%

	Global Relocation Solutions		513.6		477.0		7.7	%
	Network Services		39.1		31.7		23.3	%
	Transportation Solutions		24.8		28.4		(12.7	)%

Operating revenues		$	577.5	$	537.1		7.5	%

Gross margin		$	113.9		101.8		11.9	%
	General and administrative expenses		87.7		77.7		12.8	%
	Restructuring credit		—		(0.1	)	u

Income from operations		$	26.2	$	24.2		8.3	%

Income from operations:
	Relocation Solutions—North America	$	12.7	$	14.9		(14.8	)%
	Relocation Solutions—Europe and Asia Pacific		3.0		2.4		25.0	%

	Global Relocation Solutions		15.7		17.3		(9.2	)%
	Network Services		9.7		5.5		76.4	%
	Transportation Solutions		0.8		1.4		(42.9)	%

Income from operations		$	26.2	$	24.2		8.3	%

(a): Percentages are reflected except when greater than 100%, in which case a "u" for unfavorable is shown.

Pensions and Other Postretirement Benefits: We provide a range of benefits to our employees and retired employees, including defined benefit retirement plans, postretirement health care and life insurance benefits and post-employment benefits (primarily severance). We record annual amounts relating to these plans based on calculations specified by U.S. GAAP, which include various actuarial assumptions, such as discount rates, assumed rates of return, compensation increases, turnover rates and health care cost trend rates. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when it is deemed appropriate to do so. As required by U.S. GAAP, the effect of the modifications is generally recorded or amortized over future periods. We believe that the assumptions utilized in recording the Company's obligations under our plans are reasonable based on our experience and advice from our actuaries.

Income taxes: We follow Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax laws and tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. In addition, the amounts of any future tax benefits are reduced by a valuation allowance to the extent such benefits are not expected to be realized on a more likely than not basis.

Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Some of the areas where estimation is significant are as follows: (a) DNP is the estimated revenues associated with shipments delivered or services completed and not invoiced; (b) PTE is the associated purchased transportation expense that is estimated corresponding to the DNP revenue; (c) accounts and notes receivable reserves for doubtful accounts are estimated based on historical write-off data to establish the uncollectible portion of the receivables; (d) costs relating to cargo damage and delay claims are estimated based on actuarial methods; and (e) loss reserves of our insurance subsidiaries are estimated using third party actuaries to estimate insurance reserves.

Results of Operations

Our operating revenues are derived from our moving services—North America, moving services—Europe and Asia Pacific, insurance services, relocation services and logistics services segments. Gross margin is a result of operating revenues less direct expenses associated with the movement of goods or the completion of services. Direct expenses are defined as follows for each segment.

~~Moving~~ ~~services—North~~ Operating ~~America's~~revenues ~~transportation~~for ~~expenses~~the ~~are~~three ~~comprised~~months ended June 30, 2003 were $577.5 million, an increase of ~~payments~~$40.4 million compared to: the three months ended June 30, 2002, primarily due to revenue of $16.2 million generated by our acquisitions net of divestiture, $9.3 million of favorable currency impact and $14.9 million of net growth in our other businesses.

~~Moving~~Revenue ~~services—Europe~~in ~~and~~global ~~Asia~~relocation ~~Pacific's~~solutions ~~transportation~~for ~~expenses~~the ~~are~~three ~~similar~~months toended ~~those of moving services—North America~~June 30, ~~except~~2003 ~~that~~increased ~~expenses~~$36.6 million ~~incurred~~as compared to ~~provide moving~~the ~~and~~three ~~storage~~months ~~services~~ended ~~are~~June 30, ~~largely~~2002, indue ~~the~~to acquisitions ~~form~~net of ~~direct~~divestitures ~~labor~~of ~~and~~$16.2 million, ~~equipment~~currency ~~expenses~~impact ~~rather~~of ~~than~~$9.3 million inand ~~the~~an ~~form~~increase ofin ~~agent~~our orother ~~owner/operator~~businesses ~~expenses~~of $11.1 million.

~~Insurance~~Within ~~services~~global ~~direct~~relocation ~~expenses~~solutions, ~~are~~revenue ~~primarily~~from ~~comprised~~acquisitions net of ~~underwriting~~divestitures ~~policies~~was $16.2 million, ~~payments~~consisting of ~~loss~~$12.2 million ~~recovery~~from tothe ~~policy~~CRS ~~holders~~acquisition, $8.6 million from the Maison Huet, Scanvan and ~~loss~~Rowan ~~adjustment~~Simmons ~~expense~~acquisitions, partially reduced by $4.6 million resulting from the sale of our U.K. industrial moving business in December 2002.

~~Relocation~~Revenue ~~services~~in ~~direct~~global ~~expenses~~relocation ~~are~~solutions ~~primarily~~also ~~comprised~~increased of$9.3 million ~~commissions~~due ~~paid~~ to ~~realtors~~favorable currency impacts. For the three months ended June 30, ~~home~~2003, ~~closing~~the ~~costs~~British pound sterling, the Australian dollar and ~~staff~~the ~~expenses~~Euro ~~associated~~were ~~with~~stronger ~~providing~~as ~~coordination~~compared ~~services~~to the U.S. dollar for the three months ended June 30, 2002 by approximately 10%, 14% and 19%, respectively.

~~Logistics~~In ~~services~~addition, revenue increased $11.1 million primarily due to gains in the northAmerican and SIRVA Relocation brands and our Canadian business of $4.8 million, $10.4 million and $2.4 million, respectively, partially offset by a decline in specialized transportation ~~expenses~~of ~~are~~$2.8 million ~~comprised~~and lower revenue in the Allied brand of $3.7 million. Revenue per shipment was higher by 9% in northAmerican due to increased weight per shipment. The improvement in SIRVA Relocation reflects the ~~following:~~success of integrating the CRS acquisition into our service offerings. Revenue per shipment in specialized transportation was lower by 11.3% due to a customer mix shift. Shipments were lower by 5% in Allied due to a decrease in national account business.

~~Operating~~Revenue ~~expenses~~in ~~include~~network ~~our~~services ~~insurance~~for ~~and~~the ~~claims,~~three ~~bad~~months ~~debt~~ended ~~and~~June 30, ~~general~~2003 ~~and~~was ~~administrative expenses~~$7.4 million ~~Employee~~higher ~~compensation~~as ~~and~~compared ~~benefits~~to ~~account~~the ~~for~~three ~~over~~months ~~50%~~ended ofJune 30, ~~general~~2002. ~~and~~The increase was ~~administrative~~primarily ~~expense~~due to $2.4 million ~~Other~~incremental ~~significant~~growth ~~components~~from the success of ~~general~~integrating the NAIT acquisition and ~~administrative~~additional ~~expenses~~market ~~are~~penetration ~~communication~~for ~~costs,~~the ~~rent,~~insurance ~~supplies~~services ~~and~~unit's ~~other~~range ~~purchased~~of ~~services~~insurance products.

Revenue in transportation solutions decreased $3.6 million for the three months ended June 30, 2003 as compared to the three months ended June 30, 2002, due primarily to a decrease in business, as compared to 2002 levels, with its largest customer.

Gross Margin. Gross margin for the three months ended June 30, 2003 was $113.9 million, an increase of $12.1 million compared to the three months ended June 30, 2002. The increase was due primarily to $6.3 million of higher margins from our acquisitions, $2.8 million of currency impact and $5.3 million of net growth in our other businesses. The gross margin (as a percentage of sales) was 19.7% for the three months ended June 30, 2003 and was 19.0% for the three months ended June 30, 2002. The higher gross margin as a percent of sales is in part due to a greater mix of higher margin relocation services in the six months ended June 30, 2003 as compared to the six months ended June 30, 2002.

General and Administrative Expenses. General and administrative expenses for the three months ended June 30, 2003 were $87.7 million, an increase of $10.0 million compared to the three months ended June 30, 2002. The increase was primarily due to $3.7 million of expenses associated with the incremental effect of our acquisitions made after June 30, 2002, $2.8 million due to currency impact and $1.3 million of intangibles amortization. The increase was also due to a year-over-year decrease in income from derivatives of $2.2 million. As a percentage of revenue, general and administrative expenses were 15.2% for the three months ended June 30, 2003, compared to 14.5% for the three months ended June 30, 2002.

~~Three~~ Restructuring. In ~~Months~~the ~~Ended~~three ~~September~~months ended June 30, 2002, ~~Compared~~we reversed into income $0.1 million of restructuring reserves pertaining to ~~Three~~the ~~Months~~logistics ~~Ended~~parts ~~September 30~~centers restructuring, which was established in 2001, as we were able to sublease certain parts centers facilities earlier than originally estimated.

~~The~~Income ~~following~~(Loss) ~~table~~from ~~sets~~Operations. Income ~~forth~~from ~~certain figures regarding our results of~~ operations for the three months ended ~~September~~June 30, ~~2002~~2003 was $26.2 million, ~~compared~~an toincrease of $2.0 million from the ~~three months~~same ~~ended~~period ~~September~~last year. The increase was primarily due to a net increase of $2.0 30million from our acquisitions, ~~2001~~net of divestiture.

		Three Months Ended September 30, 2002			Three Months Ended September 30, 2001			% Increase (Decrease) from Prior Period(a)
		(Dollars in millions)
Operating revenues:
	Moving Services—North America	$	388.0		$	419.3		(7.5	)%
	Moving Services—Europe and Asia Pacific		103.7			94.3		10.0	%
	Insurance Services		24.8			12.3		f
	Relocation Services		26.7			0.6		f
	Global Relocation Services		543.2			526.5		3.2	%
	Logistics Services		131.0			145.4		(9.9	)%
Operating revenues		$	674.2		$	671.9		0.3	%
Gross margin		$	142.7		$	129.7		10.0	%
	Operating expenses		97.6			98.3		(0.7	)%
	Restructuring		...			(0.1	)	u
Income from operations		$	45.1		$	31.5		43.2	%
Income (loss) from operations:
	Moving Services—North America	$	23.1		$	18.8		22.9	%
	Moving Services—Europe and Asia Pacific		12.7			9.4		35.1	%
	Insurance Services		6.7			3.2		f
	Relocation Services		4.4			(0.4	)	f
	Global Relocation Services		46.9			31.0		51.3	%
	Logistics Services		(1.8	)		0.5		u
Income from operations		$	45.1		$	31.5		43.2	%

Income from operations in global relocation solutions for the three months ended June 30, 2003 as compared to the three months ended June 30, 2002 decreased $1.6 million primarily due to a year-over-year decrease in income from derivatives of $2.2 million and $3.2 million decrease from specialized transportation, partially offset by $3.7 million additional income from operations from our acquisitions net of divestiture, primarily SIRVA Relocation.

~~Shipment~~Income ~~counts~~from ~~are~~operations ain ~~measure~~network ofservices ~~activity~~for ~~commonly used by~~ the ~~transportation~~three ~~industry.~~months ~~The~~ended ~~following~~June 30, ~~table~~2003 ~~represents~~was ~~shipments handled by the moving services—North America and logistics services segments~~$4.2 million Ahigher, ~~moving~~primarily ~~services—North~~due ~~America shipment is the movement of household goods from the point of origin~~ to ~~the~~insurance ~~final destination. Logistics~~ services' ~~shipments represent~~higher ~~the~~margins ~~movement~~due ~~of truckload or less-than-truckload quantities of products from the point of origin~~ to increased ~~the~~revenue ~~final destination. Our moving services—Europe~~ and ~~Asia~~ ~~Pacific segment, which operates outside of North America (principally~~ the ~~United~~incremental ~~Kingdom~~income ~~and~~from ~~Australia),~~operations ~~primarily~~from ~~generates revenues among~~ the ~~following~~NAIT ~~activities: domestic moving, international moving, business moving services and records management~~acquisition. ~~While shipments are an~~

Income from operations of $0.8 million for transportation solutions for the three months ended June 30, 2003 was $0.6 million less than the same period last year primarily due to lower margins due to reduced business, as compared to 2002 levels, with its largest customer.

Interest Expense. Interest expense for the three months ended June 30, 2003 was $12.6 million compared to $12.3 million in the three months ended June 30, 2002. This increase is due primarily to higher average borrowings related to our 2002 acquisitions, partially offset by lower interest rates.

Provision for Income Taxes. For the three months ended June 30, 2003, the provision for income taxes was $4.5 million based on pre-tax income of $13.5 million for an average tax rate of 33.3%. For the three months ended June 30, 2002, provision for income taxes was $4.2 million based on a pre-tax income of $11.2 million for an average tax rate of 37.5%. Our estimated provision for income taxes differs from the amount computed by applying the U.S. federal and state statutory rates. This difference is primarily due to (1) differences in the statutory rates between the U.S. and countries where we have permanently reinvested earnings and (2) tax incentive programs for which we have qualified under the laws of certain jurisdictions.

~~indicator~~Six ofMonths ~~revenue~~Ended ~~in residential moving~~June 30, ~~aggregate~~2003 ~~shipment~~Compared ~~counts~~to ~~for~~Six ~~our~~Months ~~moving~~Ended ~~services—Europe~~June 30, ~~and Asia Pacific segment are not routinely prepared and therefore are not provided~~2002.

		Number of Shipments
		Three Months Ended September 30, 2002	Three Months Ended September 30, 2001	% Increase (Decrease) from Prior Period
Moving services—North America
	U.S. and Canada	69,400	72,900	(4.8	)%
	International	9,100	10,800	(15.7	)%
Logistics services:
	Specialized transportation	96,000	94,000	2.1	%
	European operations	83,800	90,500	(7.4	)%

The following table sets forth certain figures regarding our results of operations for the six months ended June 30, 2003, compared to the six months ended June 30, 2002.

Operating Revenues. Operating revenues for the three months ended September 30, 2002 were $674.2 million, an increase of $2.3 million compared to the same period in 2001 primarily as a result of the factors discussed below.

		Six Months Ended June 30, 2003		Six Months Ended June 30, 2002			% Increase (Decrease) from Prior Period(a)
		(Dollars in millions)
Operating revenues:
	Relocation Solutions—North America	$	722.2	$	676.2		6.8	%
	Relocation Solutions—Europe and Asia Pacific		206.5		181.1		14.0	%

	Global Relocation Solutions		928.7		857.3		8.3	%
	Network Services		74.6		54.1		37.9	%
	Transportation Solutions		46.6		55.4		(15.9	)%

Operating revenues		$	1,049.9	$	966.8		8.6	%

Gross margin		$	207.8		182.0		14.2	%
	General and administrative expenses		169.2		152.4		11.0	%
	Restructuring credit		—		(0.8	)	u

Income from operations		$	38.6	$	30.4		27.0	%

Income from operations:
	Relocation Solutions—North America	$	13.9	$	10.2		36.3	%
	Relocation Solutions—Europe and Asia Pacific		6.6		5.0		32.0	%

	Global Relocation Solutions		20.5		15.2		34.9	%
	Network Services		17.7		11.5		53.9	%
	Transportation Solutions		0.4		3.7		(89.2	)%

Income from operations		$	38.6	$	30.4		27.0	%

(a): Percentages are reflected except when greater than 100%, in which case a "u" for unfavorable is shown.

~~Revenue~~Operating inrevenues ~~moving services—North America~~ for the ~~three~~six months ended ~~September~~June 30, ~~2002~~2003 ~~decreased~~were $311,049.39 million, asan increase of $83.1 million compared to the ~~three~~six months ended ~~September~~June 30, ~~2001~~2002, ~~due~~ primarily due to ~~the~~revenue ~~general~~of ~~economic slowdown~~$50.7 million ~~Shipments~~generated ~~were~~by ~~lower~~our inacquisitions ~~the~~net ~~AVL~~of ~~and NAVL lines approximately 7% and 3%~~divestiture, ~~respectively, as compared to the same period last year~~$24.1 million ~~This~~of isfavorable acurrency ~~sequential~~impact ~~improvement~~and ~~from the quarter ended June~~$8.3 ~~30,~~million ~~2002,~~of net ingrowth ~~which shipments were down~~ in ~~the~~our ~~AVL~~other ~~and NAVL lines approximately 11% and 9%, respectively~~businesses.

Revenue in ~~moving~~global ~~services—Europe~~relocation ~~and~~solutions ~~Asia~~for ~~Pacific increased $9.4 million in~~ the ~~three~~six months ended ~~September~~June 30, ~~2002~~2003 increased $71.4 million as compared to the ~~three~~six months ended ~~September~~ June 30, ~~2001.~~2002, ~~This was primarily~~ due to acquisitions annet ~~increase~~of indivestitures ~~Asia~~of ~~Pacific revenue~~$41.4 million, ascurrency ~~Asia~~impact ~~business~~of ~~and~~$24.1 million ~~the domestic~~ and ~~international~~an ~~moving~~increase ~~business~~ in ~~Australia~~our ~~improved.~~other ~~Records management~~ business ~~also~~of ~~improved for the three months ended September~~$5.9 ~~30, 2002 as compared to the three months ended September 30, 2001~~million. ~~This was partially offset by softness in U.K. industrial moving.~~

~~Revenue~~Within inglobal ~~insurance~~relocation ~~services~~solutions, ~~for~~revenue ~~the~~from ~~three~~acquisitions ~~months~~net ~~ended~~of ~~September~~divestitures was $41.4 30million, ~~2002~~consisting ~~was~~of $1241.5 0 million ~~higher~~from asthe ~~compared~~CRS toacquisition, $11.1 million from the ~~three~~Maison ~~months~~Huet, ~~ended~~Scanvan ~~September 30,~~and ~~2001.~~Rowan ~~The~~Simmons ~~increase was~~acquisitions, ~~due~~partially toreduced ~~the~~by ~~NAIT~~$10.7 million ~~acquisition,~~resulting afrom ~~general~~the ~~increase~~sale inof ~~rates~~our ~~and~~U.K. ~~additional~~industrial ~~market~~moving ~~penetration~~business in December 2002.

Revenue in global relocation ~~services~~solutions ~~for~~also increased $24.1 million due to favorable currency impacts. For the ~~three~~six months ended ~~September~~June 30, ~~2002~~2003, ~~was~~the ~~$26.1~~British ~~million~~pound ~~higher~~sterling, the Australian dollar and the Euro were stronger as compared to the ~~three~~U.S. dollar for the six months ended ~~September~~June 30, ~~2001.~~2002 ~~The~~by ~~increase was~~approximately ~~due~~10%, to13% ~~the~~and ~~CRS~~19%, ~~acquisition~~respectively.

~~Revenue~~In inaddition, ~~logistics~~revenue ~~services~~increased ~~decreased~~ $145.49 million ~~in the three months ended September 30, 2002 as compared to the three months ended September 30, 2001 due~~ primarily ~~to reduced shipments within Europe and reduced activity levels in freight forwarding,~~ due to ~~the~~gains ~~general economic slowdown. Specialized transportation shipments were 2.1% higher~~ in the ~~three months~~northAmerican ~~ended~~and ~~September~~SIRVA ~~30,~~Relocation ~~2002~~brands asand ~~compared~~our toCanadian ~~the~~business ~~three months ended September 30, 2001, although revenue decreased because revenue per shipment was lower due to a mix shift in the type~~ of ~~shipments handled. Also, revenues were~~ $39.74 million ~~lower than in the three months ending September 30~~, ~~2001 as we exited the parts~~ ~~center business at the end of 2001~~$9.3 million ~~These reductions were partially offset by new volume in logistics solutions due to the addition of new customers~~ and ~~increased volume with existing customers~~$2.6 million, respectively,

Gross Margin. Gross margin for the three months ended September 30, 2002 was $142.7 million, an increase of $13.0 million compared to the three months ended September 30, 2001. The gross margin (as a percentage of sales) was 21.2% for the three months ended September 30, 2002 and was 19.3% for the three months ended September 30, 2001. This increase was due primarily to acquisitions, customer mix and operating and service delivery efficiencies.

~~Operating~~partially offset ~~Expenses. Operating~~by ~~expenses~~a ~~for~~decline ~~the~~in ~~three~~specialized ~~months~~transportation ~~ended September 30, 2002 were $97.6 million, a decrease~~ of $0.7.4 million ~~compared~~and tolower ~~the~~revenue ~~three~~in ~~months ended September 30, 2001. Cost containment programs continue such as delayering~~ the ~~organization~~Allied ~~and~~brand ~~generally~~of ~~reducing discretionary expenses~~$6. ~~Also, effective January~~5 ~~2002, we adopted Financial Accounting Standards No~~million. ~~142,~~ ~~"Goodwill~~Revenue ~~and~~per ~~Other~~shipment ~~Intangible~~was ~~Assets",~~higher ~~under~~by ~~which~~9% ~~goodwill~~in ~~is no longer~~northAmerican ~~amortized~~due ~~but~~to isincreased ~~reviewed~~weight atper ~~least annually for impairment~~shipment. The ~~resultant~~improvement ~~decrease~~in ~~due~~SIRVA toRelocation reflects the ~~elimination~~success of ~~goodwill~~integrating ~~amortization was $2.7 million. Partially offsetting~~ the ~~above~~CRS ~~were~~acquisition ~~higher general~~into ~~and~~our ~~administrative~~service ~~expenses~~offerings. ~~due~~Revenue toper ~~the~~shipment ~~incremental~~was ~~expenses~~lower ofby ~~the companies we acquired~~11.3% ~~Also,~~in specialized ~~bad~~transportation ~~debt expense was $1.9 million higher,~~ primarily due to ~~a reserve for a moving services~~ customer mix. AsShipments ~~a percentage of revenue, operating expenses~~ were ~~14.5~~lower 4% ~~for~~in ~~the~~Allied ~~three~~due ~~months ended September 30, 2002, compared~~ to ~~14.6%~~a ~~for~~decrease ~~the~~in ~~three~~national ~~months~~account ~~ended September 30, 2001~~business.

~~Restructuring. In~~Revenue in network services for the ~~three~~six months ended ~~September~~ June 30, ~~2001,~~2003 wewas ~~recorded~~ $020.1 5 million ofhigher ~~restructuring~~as ~~credit~~compared ~~pertaining~~ to the ~~logistics~~six ~~parts~~months ~~centers~~ended ~~restructuring reserve~~June 30, ~~which~~2002. The increase was primarily ~~established~~due atto ~~June~~$13.5 million ~~30,~~from ~~2001,~~the asApril we2002 ~~were~~acquisition ~~able~~of tothe ~~sublease~~business ~~certain~~of ~~parts~~NAIT ~~centers~~and ~~facilities~~additional ~~earlier~~market ~~than~~penetration ~~originally~~for ~~estimated~~the insurance services unit's range of insurance products.

~~Income~~Revenue in ~~(Loss)~~transportation ~~from~~solutions ~~Operations~~decreased $8. ~~Income~~8 million ~~from operations~~ for the ~~three~~six months ended ~~September~~June 30, ~~2002~~2003 ~~was $45.1 million,~~as compared to ~~$31.5~~the ~~million~~six ~~for~~months ~~the~~ended ~~same~~June 30, ~~period~~2002, due primarily to a decrease in ~~2001~~business from its largest customer, as acompared ~~result~~to of2002 ~~the~~levels ~~factors~~which ~~discussed~~was ~~below~~higher than normal.

~~Income from~~Gross ~~operations~~Margin. Gross inmargin ~~moving services—North America~~ for the ~~three~~six months ended ~~September~~June 30, ~~2002~~2003 aswas ~~compared to the three months ended September~~$207.8 30million, ~~2001 increased~~an increase of $425.38 million ~~primarily~~compared ~~due~~ to ~~lower~~the ~~cargo~~six ~~loss~~months ~~and~~ended ~~damage expenses~~June 30, ~~reduced~~2002. ~~general~~The ~~and~~increase ~~administrative~~was ~~expenses~~due ~~and~~primarily ~~the~~to ~~elimination~~$25.7 million of ~~goodwill~~higher ~~amortization~~margins ~~which~~from ~~was~~our acquisitions and $17.2 9 million inof ~~the~~currency ~~three months ended September 30~~impact, ~~2001.~~partially ~~These~~offset by ~~favorable~~a ~~variances~~decrease ~~were~~of ~~partially~~$6.0 million ~~offset~~in byspecialized ~~lower~~transportation. ~~Allied~~The ~~and~~gross ~~northAmerican~~margin ~~lines margins~~ (as a ~~result~~percentage of ~~the~~sales) ~~revenue~~was ~~decrease~~19.8% ~~and~~for ~~$1.9~~the ~~million~~six ofmonths ~~bad debt~~ended ~~expense~~June 30, ~~associated~~2003 ~~with~~and awas ~~reserve~~18.8% for athe ~~moving~~six ~~services~~months ended ~~customer~~June 30, 2002.

~~Income from~~General ~~operations~~and inAdministrative ~~moving~~Expenses. General ~~services—Europe~~ and ~~Asia~~administrative ~~Pacific~~expenses ~~increased~~for ~~$3.3 million in~~ the ~~three~~six months ended ~~September~~June 30, ~~2002~~2003 aswere $169.2 million, an increase of $16.8 million compared to the ~~three~~ six months ended ~~September~~June 30, ~~2001~~2002. ~~Gross~~The ~~margin~~increase was ~~higher~~primarily due to ~~revenue~~$11.0 million ~~mix~~of expenses associated with our acquisitions and an$7.4 million ~~increase~~due into ~~volume~~currency impact. ~~Goodwill~~The ~~amortization~~increase was $0also ~~while~~due ~~for~~to ~~the~~$2.7 million ~~three~~of ~~months~~intangibles ~~ended~~amortization ~~September~~and ~~30,~~a ~~2001~~year-over-year ~~it was~~ $12.10 million decrease in income from derivatives. ~~This~~These ~~was~~items were partially offset by an$2.1 million ~~increase~~of inlower general and administrative expenses as a result of continuing cost containment programs, ~~due~~whereby ~~primarily~~we tohave ~~increased~~reduced discretionary ~~customer~~expenses, ~~claims~~and the effects of prior year restructuring programs, in which headcount was reduced. As a percentage of revenue, general and ~~incremental~~administrative expenses ~~associated~~were ~~with~~16.1% ~~acquisitions~~for the six months ended June 30, 2003, compared to 15.8% for the six months ended June 30, 2002.

~~Income from~~Restructuring. In ~~operations in insurance services for~~ the ~~three~~six months ended ~~September~~June 30, 2002, aswe ~~compared~~reversed into income $0.8 million of restructuring reserves pertaining to the ~~three~~parts ~~months~~centers ~~ended September 30~~restructuring, ~~2001~~which ~~increased $3.5 million~~was ~~primarily~~established ~~due~~in to2001, ~~higher~~as ~~margins~~we ~~due~~were able to ~~increased~~sublease ~~revenue~~certain ~~and~~parts ~~the~~centers ~~NAIT~~facilities ~~acquisition~~earlier than originally estimated.

Income from ~~operations~~Operations. Income infrom ~~relocation~~operations ~~services~~ for the ~~three~~six months ended ~~September~~June 30, ~~2002~~2003 aswas ~~compared~~$38.6 million, toan increase of $8.2 million from the ~~three~~same ~~months~~period ~~ended~~last ~~September 30,~~year. ~~2001~~The ~~increased~~ increase was primarily due to a net increase of $47.84 million ~~primarily~~from ~~due~~our toacquisitions ~~the~~net ~~CRS~~of ~~acquisition~~divestiture.

~~Loss~~Income from operations in ~~logistics~~global ~~services~~relocation solutions for the ~~three~~six months ended ~~September~~June 30, ~~2002~~2003 ~~was~~increased $15.83 million, as compared to ~~income from operations of $0.5 million in~~ the ~~three~~six months ended ~~September~~June 30, 2002, ~~2001.~~primarily ~~Margins were lower~~ due to ~~customer~~$4.1 million ~~mix~~from ~~change~~our ~~and~~acquisitions, ~~increased third party hauling costs~~$1.5 million ~~Revenue~~incremental ~~per~~income ~~shipment~~from ~~also~~operations ~~decreased~~from asthe aSIRVA ~~result~~Relocation ofacquisition, ~~the customer mix change~~$4.4 million ~~Insurance~~from ~~claims~~our ~~expense~~other operations ~~increased~~and ~~year-over-year~~$0.4 million ~~These~~currency ~~unfavorable~~impact, ~~variances were~~ partially offset by ~~lower~~$2.6 million ~~general~~reduction ~~and~~in ~~administrative~~specialized ~~expenses,~~transportation due to ~~general cost containment and~~ reduced ~~headcount~~margins, ~~the elimination of~~ $02.40 million of ~~goodwill~~ intangibles amortization and ~~the elimination of~~ $01.57 million of ~~losses~~year-over-year ~~related~~decrease ~~to the parts centers business, which we exited at the end of 2001. Also,~~ in ~~the~~income ~~three~~from ~~months ended September 30, 2001, there were hedging losses of $0~~derivatives.~~1 million.~~

~~Interest~~Income from ~~Expense. Interest~~operations ~~expense~~in network services for the ~~three~~six months ended ~~September~~June 30, ~~2002~~2003 was $1317.87 million, ~~compared~~$6.2 million tohigher than for the same period last year. The increase was primarily due to accretive income from operations from the NAIT acquisition of $163.53 million inand ~~the~~incremental ~~three~~income ~~months~~from ~~ended~~operations ~~September~~of $2.1 30million, ~~2001~~reflecting the sucess of integrating the NAIT operations. This ~~decrease~~was ispartially ~~due~~offset ~~primarily~~by a year-over-year derivative loss of $0.9 million related to ~~lower~~marking ~~interest~~the ~~rates~~insurance ~~and~~unit's ~~lower~~investment ~~average~~portfolio ~~borrowings~~to market.

~~Provision for~~ Income ~~Taxes. For the three months ended September 30, 2002, income tax expense~~ ~~was~~from ~~$12.0 million based~~operations onin ~~pre-tax~~transportation ~~income~~solutions ofdecreased $313.3 million. ~~For~~for the ~~three~~six months ended ~~September~~June 30, ~~2001,~~2003 ~~income~~as ~~tax~~compared ~~expense~~to ~~was~~the ~~$18.8 million~~six ~~based~~months onended ~~pre-tax~~June 30, ~~income~~2002, primarily ofdue ~~$14.9 million.~~to ~~Our estimated~~reduced ~~provision~~margins ~~for~~associated ~~income~~with ~~taxes~~the ~~differs~~revenue from the ~~amount~~reduced ~~computed~~business byof ~~applying~~transportation ~~the~~solution's ~~federal~~largest ~~and~~customer ~~state~~partially ~~statutory~~offset ~~rates.~~by ~~This~~the ~~difference~~reversal isinto ~~primarily~~income ~~due~~of ~~to (1)~~$0.8 ~~the~~million ~~non-deductibility~~ of ~~certain~~restructuring ~~items~~reserves ~~expensed~~pertaining ~~for~~to ~~book~~the ~~purposes~~parts ~~and~~center ~~(2) limitations~~restructuring, ~~that~~which ~~exist~~was onestablished ~~the~~in ~~availability~~2001, ofas ~~certain~~we ~~foreign~~were ~~income~~able ~~tax~~to ~~credits.~~sublease ~~These~~certain ~~items~~parts ~~create~~centers ~~taxable income~~earlier ~~that is greater~~ than ~~income~~originally ~~reported for financial statement purposes~~estimated.

~~Nine~~ Interest ~~Months~~Expense. Interest ~~Ended~~expense ~~September~~for the six months ended June 30, ~~2002~~2003 ~~Compared~~was $25.1 million compared to $24.8 million ~~Nine~~in ~~Months~~the ~~Ended~~six ~~September~~months ended June 30, ~~2001~~2002. The increase is due primarily to higher average borrowings related to our 2002 acquisitions, partially offset by lower interest rates.

~~The~~Provision ~~following~~for ~~table~~Income ~~sets~~Taxes. For ~~forth~~the ~~certain~~six ~~figures~~months ~~regarding~~ended ~~our~~June 30, ~~results~~2003, income tax expense was $4.2 million based on pre-tax income of ~~operations~~$13.3 million for a tax rate of 31.6%. For the ~~nine~~six months ended ~~September~~June 30, 2002, ~~compared~~income totax expense was $1.5 million based on pre-tax income of $5.2 million for a tax rate of 28.8%. Our estimated provision of income taxes differs from the ~~nine~~amount computed by applying the U.S. federal and state statutory rates. This difference is ~~months~~primarily ~~ended~~due ~~September~~to (1) ~~30,~~differences ~~2001~~in the statutory rates between the U.S. and countries where we have permanently reinvested earnings and (2) tax incentive programs for which we have qualified under the laws of certain jurisdictions.

		Nine Months Ended September 30, 2002			Nine Months Ended September 30, 2001			% Increase (Decrease) from Prior Period(a)
		(Dollars in millions)
Operating revenues:
	Moving Services—North America	$	883.3		$	1,026.7		(14.0	)%
	Moving Services—Europe and Asia Pacific		260.2			249.0		4.5	%
	Insurance Services		58.2			35.1		65.8	%
	Relocation Services		45.3			1.5		f
	Global Relocation Services		1,247.0			1,312.3		(5.0	)%
	Logistics Services		394.0			461.3		(14.6	)%
Operating revenues		$	1,641.0		$	1,773.6		(7.5	)%
Gross margin		$	345.4		$	340.7		1.4	%
	Operating expenses		270.7			293.0		(7.6	)%
	Restructuring		(0.8	)		4.9		f
Income (loss) from operations		$	75.5		$	42.8		76.4	%
Income (loss) from operations:
	Moving Services—North America	$	32.9		$	18.4		78.8	%
	Moving Services—Europe and Asia Pacific		17.5			17.2		1.7	%
	Insurance Services		17.0			10.9		56.0	%
	Relocation Services		6.3			(0.4	)	f
	Global Relocation Services		73.7			46.1		59.9	%
	Logistics Services		1.8			(3.3	)	f
Income from operations		$	75.5		$	42.8		76.4	%

Shipment counts are a measure of activity commonly used by the transportation industry. The following table represents shipments handled by the moving services—North America and logistics services segments. A moving services—North America shipment is the movement of household goods from the point of origin to the final destination. Logistics services shipments represent the movement of truckload or less-than-truckload quantities of products from the point of origin to the final destination. Our moving services—Europe and Asia Pacific segment, which operates outside of North America (principally the United Kingdom and Australia), primarily generates revenues among the following activities: domestic moving, international moving, business moving services and records management. While shipments are an indicator of revenue in residential moving, aggregate shipment counts for our moving services—Europe and Asia Pacific segment are not routinely prepared and therefore are not provided.

		Number of Shipments
		Nine Months Ended September 30, 2002	Nine Months Ended September 30, 2001	% Increase (Decrease) from Prior Period
Moving Services—North America:
	U.S. and Canada	170,000	189,000	(10.0	)%
	International	23,300	29,900	(22.1	)%
Logistics services:
	Specialized transportation	284,900	300,500	(5.2	)%
	European operations	262,300	283,400	(7.4	)%

Operating Revenues. Operating revenues for the nine months ended September 30, 2002 were $1,641.0 million, a decrease of $132.6 million compared to the same period in 2001 primarily as a result of the factors discussed below.

Revenue in moving services—North America for the nine months ended September 30, 2002 decreased $143.4 million or 14% as compared to the nine months ended September 30, 2001 due primarily to the continuation of the general economic slowdown. Shipments were lower by approximately 12%, 8% and 22% in the Allied and northAmerican lines and in the international unit, respectively. The percentage of revenue decrease in the Allied and northAmerican lines was higher than the percentage decrease in shipments primarily due to served market mix.

Revenue in moving services—Europe and Asia Pacific increased $11.2 million in the nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001. This was primarily due to an increase in Asia Pacific revenue, as Asia business and the domestic and international moving business in Australia improved. Records management business also improved for the nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001. This was partially offset by softness in U.K. industrial moving.

Revenue in insurance services for the nine months ended September 30, 2002 was $23.1 million higher as compared to the nine months ended September 30, 2001. The increase was due to the NAIT acquisition, a general increase in rates and additional market penetration.

Revenue in relocation services for the nine months ended September 30, 2002 was $43.8 million higher as compared to the nine months ended September 30, 2001. The increase was due to the CRS acquisition.

Revenue in logistics services decreased $67.3 million in the nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001 due primarily to reduced shipments within specialized transportation and reduced activity levels in freight forwarding, due to the general economic slowdown, particularly in the technology and telecommunications sectors. Also, revenues were $13.5 million lower than in the nine months ending September 30, 2001 as we exited the parts center business at the end of 2001. These reductions were partially offset by new volume in logistics solutions due to the addition of new customers and increased program volume with existing customers.

Gross Margin. Gross margin for the nine months ended September 30, 2002 was $345.4 million, an increase of $9.7 million compared to the nine months ended September 30, 2001. The gross margin (as a percentage of sales) was 21.0% for the nine months ended September 30, 2002 and was 19.2% for the nine months ended September 30, 2001. This increase was due primarily to acquisitions, customer mix and operating and service delivery efficiencies.

Operating Expenses. Operating expenses for the nine months ended September 30, 2002 were $270.7 million, a decrease of $22.3 million compared to the nine months ended September 30, 2001. Cargo loss and damage expenses were $9.7 million lower than in the same period in the prior year due to favorable development of claim frequency and severity trends. Cost containment programs continue such as delayering the organization and generally reducing discretionary expenses. Also, effective January 2002,

we adopted Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", under which goodwill is no longer amortized but is reviewed at least annually for impairment. The resultant decrease due to the elimination of goodwill amortization was $8.3 million. Partially offsetting the above were higher general and administrative expenses due to incremental expenses of our acquisitions. As a percentage of revenue, operating expenses were 16.5% for the nine months ended September 30, 2002, compared to 16.5% for the nine months ended September 30, 2001.

Restructuring. In the nine months ended September 30, 2002, we recorded $0.8 million of restructuring credit pertaining to the logistics parts centers, as we were able to sublease certain parts centers facilities earlier than originally estimated. In the nine months ended September 30, 2001, we incurred $4.9 million of expense, due primarily to the logistics parts center restructuring.

Income from Operations. Income from operations for the nine months ended September 30, 2002 was $75.5 million, compared to $42.8 million for the same period in 2001 as a result of the factors discussed below.

Income from operations in moving services—North America for the nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001 increased $14.5 million primarily due to lower cargo loss and damage expense, reduced general and administrative expenses and the elimination of goodwill amortization which was $3.7 million for the nine months ended September 30, 2001. Income from operations in moving services—North America for the nine months ended September 30, 2002 was also higher than for the nine months ended September 30, 2001 due to the expenses associated with the January 2001 agent convention. These favorable variances were partially offset by lower Allied and northAmerican lines margins as a result of the volume decrease.

Income from operations in moving services—Europe and Asia Pacific increased $0.3 million in the nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001. Gross margin was higher due to revenue mix. Goodwill amortization was $0 in the nine months ended September 30, 2002 and $3.4 million in the nine months ended September 30, 2001. These favorable variances were partially offset by an increase in general and administrative expenses, due primarily to severance costs and increased customer claims, and a year-over-year decrease of $0.5 million relating to gains on outstanding foreign currency exchange contracts.

Income from operations in insurance services for the nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001 increased $6.1 million primarily due to higher margins due to increased revenue, the NAIT acquisition and a year-over-year derivative gain of $0.7 million.

Income from operations in relocation services for the nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001 increased $6.7 million primarily due to the CRS acquisition.

Income from operations in logistics services for the nine months ended September 30, 2002 was $1.8 million, an increase of $5.1 million compared to the nine months ended September 30, 2001 due to lower general and administrative expenses and the elimination of $1.2 million of goodwill amortization. Also, in the nine months ended September 30, 2001, losses related to the parts centers business, which we exited at the end of 2001, were $5.8 million. These favorable variances were partially offset by lower margins due to the reduction in specialized transportation shipment volume and reduced activity in freight forwarding.

Interest Expense. Interest expense for the nine months ended September 30, 2002 was $38.7 million compared to $48.1 million in the nine months ended September 30, 2001. This decrease is due primarily to lower interest rates and lower average borrowings.

Provision (Benefit) for Income Taxes. For the nine months ended September 30, 2002, income tax expense was $13.6 million based on pre-tax income of $36.5 million. For the nine months ended September 30, 2001, the income tax benefit was $1.3 million based on a pre-tax loss of $5.1 million. Our estimated provision for income taxes differs from the amount computed by applying the federal and state statutory rates. This difference is primarily due to (1) the non-deductibility of certain items expensed for book purposes and (2) limitations that exist on the availability of certain foreign income tax credits. These items create taxable income that is greater than income reported for financial statement purposes.

Financial Condition

The information provided below about our cash flows, debt, credit facilities, capital and operating lease obligations and future commitments is included here to facilitate a review of our liquidity.

Consolidated Cash Flow Information

The following table presents certain cash flow information for the periods indicated. You should read this information about cash flow in conjunction with our consolidated financial statements and the accompanying notes to those financial statements appearing elsewhere in this filing.

	Six Months Ended June 30,
	2003			2002
Cash and cash equivalents at January 1,	$	42.9		$	32.1
Cash flow provided by (used for) operating activities		(12.6	)		32.3
Cash flow used for investing activities		(47.0	)		(91.4	)
Cash flow provided by financing activities		68.4			70.4
Effect of translation		2.0			0.5

Cash and cash equivalents at period end	$	53.7		$	43.9

Cash flows from operating activities.

For the six months ended June 30, 2003 and 2002, net cash used by operating activities was $12.6 million and net cash provided by operating activities was $32.3 million, respectively.

The following table presents certain additional information regarding cash flow provided by (used for) operating activities, which provides a more complete understanding of the key drivers of our cash flow performance.

	Six Months Ended June 30,
	2003			2002
Net income	$	9.1		$	3.7
Adjustments to reconcile net income to cash flow provided by (used for) operating activities		33.8			22.2
Other changes in working capital(1)		(38.5	)		(1.6	)

		4.4			24.3
Changes in relocation properties held for sale		(17.0	)		8.0

Cash flow provided by (used for) operating activities	$	(12.6	)	$	32.3

(1): Represents "changes in operating assets and liabilities" as disclosed in our consolidated and condensed consolidated statements of cash flow, excluding changes in relocation properties held for resale, net

In May 2002, we acquired SIRVA Relocation, which added a new dimension to our business. As part of our relocation product offering, we provide equity advances to relocating client employees, and occasionally take possession of the home (and the related mortgage) under buy-out programs arranged with our corporate client. These advances and properties are classified as current assets in our consolidated balance sheets. These assets, net of associated mortgages or client funding, are financed in large part by our relocation financing facilities. In accordance with generally accepted accounting principles, movements in our relocation assets and corresponding payables are classified within cash flows from operations, while the corresponding funding movements are classified within cash flows from financing operations. For internal management purposes, we exclude the impact of movements in these relocation assets from both operating and financing cash flow, as we believe that they are of a cash-neutral nature.

For the six months ended June 30, 2003 and 2002, net cash used for operating activities was $12.6 million and net cash provided by operating activities was $32.3 million, respectively. Excluding the impact of our relocation assets, cash flow provided by operating activities for the six months ended June 30, 2003 was $4.4 million as compared to $24.3 million in the comparable period of 2002. We measure a large component of working capital by tracking a calculation of average daily sales outstanding in receivables ("DSO"). DSO stood at 48 days at June 30, 2003, in line with the position at December 31, 2002. DSO stood at 50 days at June 30, 2002 as compared to 52 days at December 31, 2001. This movement, and lower revenues, resulted in a positive working capital cash flow effect in 2002 while increased revenues with consistent DSO in 2003 has resulted in a use of cash to support growth in the business.

Since our acquisition of SIRVA Relocation in May 2002, we have experienced significant growth in client relocations. This significant growth has resulted in an increase in equity advances and homes held in inventory. Consequently current assets relating to advances and relocation properties held for resale increased by $17.0 million in the first half of 2003 compared to a decrease of $8.0 million in the first half of 2002. The 2003 increase has resulted in decreased reported cash flows from operating activities, but has not materially impacted the availability under our other credit facilities.

We believe that cash generated from 2003 operations, together with amounts available under the revolving credit facility and any other available source of liquidity, will be adequate to permit us to meet our debt service obligations, capital expenditure program requirements, ongoing operating costs and working capital needs for at least the next twelve months.

Cash flows used for investing activities.

For the six months ended June 30, 2003 and 2002, net cash used for investing activities was $47.0 million and $91.4 million, respectively. Total cash used for acquisitions was $30.7 million and $82.9 million in the six months ended June 30, 2003 and 2002 respectively. Cash flows for acquisitions in these two interim periods represent our acquisition of Scanvan in 2003 and NAIT, SIRVA Relocation and Maison Huet in 2002. Our capital expenditures, which we use for computer equipment, software development and transportation and warehouse equipment, totaled $9.7 million and $17.4 million for the six months ended June 30, 2003 and 2002, respectively. Capital expenditures for 2003 are expected to range between $25.0 million and $35.0 million, and we expect to fund these capital expenditures from our cash flows from operations. We will continue to pursue acquisitions around the world that we believe would further strengthen our global presence or would advance our strategic position in the markets that we serve.

Cash flows from financing activities.

The following table presents certain additional information regarding cash flow provided by (used in) financing activities, which provides a more complete understanding of the key drivers of our cash flow performance.

	Six Months Ended June 30,
	2003			2002
Changes in revolving credit facility	$	63.5		$	(5.0	)
Changes in long-term debt and capital lease obligations		(14.9	)		26.0
Capital contribution from SIRVA		—			56.5
Other		4.4			(7.1	)

		53.0			70.4
Changes in relocation financing facilities		15.4			—

Cash flow provided by financing activities	$	68.4		$	70.4

Cash flows from financing activities consist primarily of bank borrowings and repayments and proceeds from the issuance of common stock by our parent that were contributed to us.

In the six months ended June 30, 2002, we acquired businesses for a total consideration of $82.9 million, which were financed through the issuance of $56.5 million of SIRVA common stock and $50.0 million in new bank debt. In addition, our Tranche debt was reduced by $21.9 million as the result of a required excess cash flow payment. In the six months ended June 30, 2003, we acquired businesses for a total consideration of $30.7 million, which were financed by our revolving credit facility.

Following our acquisition of Rowan Simmons in August 2002, we began to provide relocation related financing services to our clients in the U.K. These operations resulted in cash inflows from our relocation financing facilities of $15.4 million in the six months ended June 30, 2003.

In the six months ended June 30, 2003 and 2002, cash flows provided by financing activities totaled $68.4 million and $70.4 million, respectively. In each instance, the financing activities supported our strategic acquisition program, our capital expenditures and the increase in working capital in 2003 associated with our growth.

Liquidity and Capital Resources

We broadly define liquidity as our ability to generate sufficient cash flow from operating activities to meet our obligations and commitments. In addition, liquidity includes the ability to obtain appropriate debt and equity financing and to convert into cash those assets that are no longer required to meet existing strategic and financial objectives. Therefore, liquidity cannot be considered separately from capital resources that consist of current or potentially available funds for use in achieving long-range business objectives and meeting debt service commitments.

debt and equity financing and to convert into cash those assets that are no longer required to meet existing strategic and financial objectives. Therefore, liquidity cannot be considered separately from capital resources that consist of current or potentially available funds for use in achieving long-range business objectives and meeting debt service commitments.

Our short-term and long-term liquidity needs will arise primarily from:

•: interest expense, which was $52.2 million in 2002, and is expected to be approximately $50.0 million in 2003 primarily due to lower interest rates. For the six months ended June 30, 2003, interest expense was $25.1 million;
•: principal repayments of debt and capital leases, which are scheduled to total $28.3 million in 2003, $26.7 million in 2004, $40.7 million in 2005, $155.5 million in 2006, $141.8 million in 2007 and $152.6 million thereafter. For the six months ended June 30, 2003, principal repayments of debt and capital leases were $15.1 million;
•: operating lease payments, which were $58.9 million in 2002 and are scheduled to total $49.0 million in 2003, $39.2 million in 2004, $36.3 million in 2005, $27.0 million in 2006, $24.4 million in 2007 and $102.9 million thereafter;
•: unconditional purchase commitments which are scheduled to total $17.2 million in 2003, $21.7 million in 2004, $21.0 million in 2005, $19.3 million in 2006, $18.6 million in 2007 and $83.5 million thereafter;
•: capital expenditures, which were $33.3 million in 2002, and are expected to range between $30.0 million and $35.0 million in 2003. For the six months ended June 30, 2003, capital expenditures were $9.7 million; and
•: working capital requirements as may be needed to support business growth.

The seasonal nature of the moving business results in increased short-term working capital requirements in the summer months. This will result in an increase in receivables which are typically collected, and revolving credit borrowings which are typically repaid, by late fall. Due to this seasonality, we can operate with negative working capital due to the turnover of our accounts receivable and access to our revolving credit facility.

Debt Service. Principal and interest payments under our senior credit facility and interest payments on the notes represent significant liquidity requirements for us. AsOur senior credit facility is comprised of ~~September~~note payable—Tranche A, note payable—Tranche B and a revolving credit facility. As of June 30, ~~2002~~2003, we had $~~570~~624.48 million of indebtedness ~~comprised of indebtedness~~ for borrowed money and capital leases, consisting of:

•: $150.0 million principal amount of our 13³/8% senior subordinated notes;
•: $318.8 million outstanding under our term loans (consisting of a note payable—tranche A and a note payable—tranche B amounting to $110.0 million and $208.8 million, respectively);
•: $84.0 million outstanding under our $150.0 million revolving credit facility;
•: $15.5 million of capital leases;
•: $39.5 million of short-term debt, consisting of a $31.6 million mortgage revolving credit facility and $7.9 million of foreign subsidiaries operating lines of credit; and
•: $17.0 million of other debt.

As a result, we are required to devote a substantial amount of our cash flow to service this indebtedness. We are required to repay our note payable—tranche A in quarterly principal payments over seven years and our note payable—tranche B in quarterly principal payments over eight years. We are required to repay any amounts borrowed under the revolving credit facility forming part of our senior credit facility by the seventh anniversary of the initial borrowings under the senior credit facility. All borrowings under the senior credit facility bear interest at floating rates based upon the interest rate option elected by us.

In connection with the purchase of the relocation services business of Cooperative Resource Services, Ltd. on May 3, 2002, we borrowed an additional $50.0 million under the note payable—tranche B facility. See "Management's Discussion and Analysis of Financial Condition and of Operations—Overview."

Covenant Restrictions. The senior credit facility imposes restrictions on our ability to make capital expenditures. Additionally, the senior credit facility, the indenture governing the notes and the agreements

and ~~governing~~ our ~~parent~~note ~~company's~~payable—tranche B ~~senior~~in ~~discount~~quarterly ~~debt,~~principal ~~which~~payments asover ateight ~~September 30,~~years. ~~2002,~~We ~~had~~are ~~accreted~~required to ~~$54.1 million,~~repay ~~limit~~any amounts borrowed under the revolving credit facility forming part of our ~~ability~~senior tocredit ~~incur~~facility ~~additional~~by ~~indebtedness~~the seventh anniversary of the initial borrowings under the senior credit facility. ~~Such~~All ~~restrictions~~borrowings under the senior credit facility bear interest at floating rates based ~~could~~upon ~~limit~~the ~~our~~interest ~~ability~~rate tooption elected by us.

As of June 30, 2003, the Company had available $54.6 million under the revolving credit facility forming part of our senior credit facility to meet our future working capital and other business needs.

Covenant Restrictions. The senior credit facility imposes restrictions on our ability to make capital expenditures. Additionally, the senior credit facility, the indenture governing the notes and the agreements governing our parent company's senior discount debt, which at June 30, 2003 had accreted to $61.1 million, limit our ability to incur additional indebtedness. Such restrictions could limit our ability to:

•: respond to certain market conditions;
•: complete our capital spending program;
•: provide for unanticipated capital investments; or
•: take advantage of business opportunities.

The covenants in the senior credit facility also, among other things, limit our ability to

•: dispose of assets;
•: incur guarantee obligations;
•: prepay other indebtedness;
•: make restricted payments;
•: create liens;
•: make equity or debt investments;
•: make acquisitions;
•: modify terms of the indenture;
•: engage in mergers or consolidations;
•: change the business conducted by us;
•: make capital expenditures; or
•: engage in certain transactions with affiliates.

The indenture governing our senior subordinated notes and the agreements governing our parent company's senior discount debt, ~~which at September 30, 2002, had accreted to $54.1 million,~~ contain a number of similar restrictions.

Capital Expenditures.

Capital expenditures for 2002 are expected to approximate $31.0 million for computer equipment, software development and transportation and warehouse equipment.

Financing Sources. As of September 30, 2002, there was approximately $77.7 million available under the revolving credit facility forming part of our senior credit facility to meet our future working capital and other business needs. We believe that cash generated from operations, which was $46.7 million, primarily due to net income, depreciation, an increase in accounts payable and other current liabilities, partially offset by seasonal growth in accounts receivable for the nine months ended September 30, 2002, together with amounts available under the revolving credit facility and any other available source of liquidity will be adequate to permit us to meet our debt service obligations, capital expenditure program requirements, ongoing operating costs and working capital needs for at least the next twelve months. Our future operating performance and ability to service or refinance the notes and to repay, extend, or refinance our senior credit facility will be, among other things, subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

We made a $21.9 million prepayment of notes payable—tranche A and notes payable—tranche B debt on March 29, 2002, due to excess cash flow in 2001, as defined in our senior credit facility. Of that amount, approximately $4.2 million replaced principal payments due at that time, with the remaining approximately $17.7 million reducing future principal payments.

In addition, we guarantee operating lines of credit maintained by wholly-owned foreign subsidiaries. As of September 30, 2002 and December 31, 2001, the outstanding balance was $3.9 million and $1.2 million, respectively.

In connection with the purchase of the relocation services business of Cooperative Resource Services, Ltd. on May 3, 2002, we borrowed an additional $50.0 million under our senior credit facility. See "Management's Discussion and Analysis of Financial Condition and of Operations—Overview."

Commitments and Contingencies

OnPurchase ~~July 1,~~commitments ~~2002,~~consisted ~~we entered into a ten year purchase commitment with Covansys Corporation and Affiliated Computer Services, Inc. to provide outsourcing services for 100%~~ of the ~~Company's~~following ~~information~~at systems infrastructure, including data center operations and telecommunications, and, initially, approximately 50% of application software development. Covansys Corporation is a related party, as approximately 23% of its outstanding common stock is owned by Fund VI, an affiliate of Fund V. As of SeptemberJune 30, ~~2002,~~2003: ~~the remaining purchase commitment was $181.2 million.~~

Outsourcing agreements through June 30, 2012	$	172.0
Software licenses		3.2

	$	175.2

Litigation

We were a defendant in a personal injury suit resulting from a 1996 accident involving one of our agent's drivers. The case was tried in 1998, and we were found liable. After appeals, a final judgment ~~remains~~of to$15.2 million bewas rendered in 2002 and was fully paid asby us and two of ~~September 30,~~our ~~2002~~insurers. inAfter ~~the~~these ~~amount~~insurance ofpayments ~~approximately~~and reimbursements, we have paid $157.06 million. Wewhich we believe ~~the loss~~ is fully ~~covered~~reimbursable by insurance;. ~~however~~TIG Insurance Co. ("TIG"), one of our several co-insurers, filed suit against us, one of ~~this~~our ~~case~~subsidiaries ~~has~~and ~~filed~~several ~~suit~~other parties in the 191st Judicial District Court of Dallas County, Texas, on September 12, 2002, contesting ~~its~~TIG's and other insurers' coverage obligations and seeking declaratory judgment. IfNAVL ~~the~~filed coa counterclaim and cross-~~insurer~~claim ~~prevails~~against TIG and National Union Fire Insurance Company, ~~there~~seeking isreimbursement ~~the~~for ~~possibility~~all remaining amounts that awe ~~portion~~paid in satisfaction of the judgment ~~will~~and beassociated ~~uninsured~~costs and expenses. ~~The potential~~If ~~uninsured~~TIG prevails, there is the possibility that some or all of the unreimbursed portion of the ~~judgment~~payment ~~ranges~~we ~~from~~made $0may tonot ~~approximately~~be $7reimbursed.2 ~~million.~~ We have a reserve that we consider appropriate ~~within~~in ~~this range~~the circumstances.

We have ~~EBITDA~~produced ~~Calculation~~ and are producing records in response to two grand jury subpoenas issued in connection with an investigation being conducted by attorneys in the Department of Justice Antitrust Division through a grand jury in the Eastern District of Virginia. We are cooperating with the investigation and understand that numerous other companies have received similar subpoenas.

EBITDA for the historical periods presented is generally calculated in accordance with the definition of that term given in the senior credit agreement governing our senior credit facility (including certain allowable adjustments). EBITDA is determined by combining income from operations, restructuring charges or credits, depreciation and amortization, non-operating income (expense) and allowable EBITDA adjustments.

EBITDA, as defined, is calculated as follows:

	Three Months Ended September 30, 2002		Three Months Ended September 30, 2001			Nine Months Ended September 30, 2002			Nine Months Ended September 30, 2001
	(Dollars in millions)
Income from operations	$	45.1	$	31.5		$	75.5		$	42.8
Restructuring charge (credit)		—		(0.1	)		(0.8	)		4.9
Depreciation and amortization		10.3		12.4			28.3			36.0
Non-operating income (expense)		—		(0.1	)		(0.3	)		0.2
EBITDA adjustments		0.5		4.6			3.3			12.8
EBITDA	$	55.9	$	48.3		$	106.0		$	96.7

EBITDA adjustments have been included in this line item as follows: (a) in the three months ended September 30, 2002, we incurred $0.5 million of EBITDA adjustments consisting of $0.2 million of EBITDA losses incurred by Moveline, permitted under an amendment to the credit agreement governing our senior credit facility, referred to as "Moveline Related Strategic Initiatives", $0.2 million of e-commerce spending and $0.1 million for the development and implementation of new information technology; (b) in the three months ended September 30, 2001 we incurred $4.6 million of EBITDA adjustments consisting of $2.0 million of Moveline Related Strategic Initiatives, $1.0 million of e-commerce spending, $0.9 million for the development and implementation of new information technology and $0.7 million for additional expenses pertaining to exiting the parts centers business; (c) in the nine

months ended September 30, 2002, we incurred $3.3 million of EBITDA adjustments, consisting of $0.8 million of Moveline Related Strategic Initiatives, $1.3 million of e-commerce spending and $1.2 million for the development and implementation of new information technology and (d) in the nine months ended September 30, 2001, we incurred $12.8 million of EBITDA adjustments consisting of $8.0 million of Moveline related initiatives, $2.7 million of e-commerce spending, $0.3 million of expense relating to achieving certain cost savings through synergies arising as a result of the acquisition of the Allied and Pickfords moving van business on November 19, 1999, $1.1 million for the development and implementation of new information technology and $0.7 million of additional expenses pertaining to exiting the parts centers.

EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations as determined by generally accepted accounting principles, and our calculation thereof may not be comparable to that reported by other companies. We believe that it is widely accepted that EBITDA provides useful information regarding a company's ability to service and/or incur indebtedness. EBITDA does not take into account a company's working capital requirements, debt service requirements and other commitments and, accordingly, is not necessarily indicative of amounts that may be available for discretionary use.

Seasonality

Our operations are subject to seasonal trends common to the moving ~~industry~~and relocation industries. Results of our operations for the quarters ending in December and March are typically lower than the quarters ending in June and September due to reduced shipments in the winter months. With respect to ~~moving~~relocation ~~services~~solutions—North America, over half of its revenue is typically generated from May through September. For ~~logistics~~movement ~~services~~of specialized transportation products, shipping requirements of the customer base result in higher shipment volumes at the end of each quarter. ~~Moving~~Relocation ~~services~~solutions—Europe and Asia Pacific experiences seasonality with respect to residential ~~relocations~~moves; however, this is somewhat diminished by the geographic diversity of our ~~business~~ moving activities and involvement with other non-seasonal ~~operations~~ business services such as records management and office moving.

Recent Accounting Pronouncements

In ~~August~~ ~~2001~~January 2003, the ~~Financial Accounting Standards Board ("~~FASB") issued ~~Statement~~Interpretation ~~of Financial Accounting Standards~~ No. ~~144~~46, "~~Accounting~~Consolidation ~~for~~of ~~the~~Variable ~~Impairment~~Interest ~~or Disposal of Long-Lived Assets~~Entities" ("~~SFAS~~FIN ~~144~~46")~~, superseding SFAS 121, effective for fiscal years beginning after December 15, 2001~~. ~~The provisions of SFAS~~FIN ~~144~~46 ~~are for long-lived assets to~~addresses beconsolidation ~~disposed of~~ by ~~sale~~business orenterprises ~~otherwise~~of ~~are~~variable ~~effective~~interest ~~for~~entities. ~~disposal~~We ~~activities~~believe ~~initiated~~the byadoption anof ~~entity's~~FIN 46 ~~commitment~~will tonot have a ~~plan~~material ~~after~~effect ~~the~~on ~~initial~~our ~~date~~operating ofresults ~~adoption~~or offinancial ~~SFAS 144~~condition. WeAs ~~adopted~~of ~~SFAS~~June ~~144~~30, ~~on January 1~~2003, ~~2002~~we ~~and~~had ~~the~~no ~~adoption~~variable ~~did~~interest ~~not have a significant impact on our financial condition and results of operations~~entities.

In April ~~2002~~ 2003, the FASB issued Statement ~~of Financial Accounting Standards~~ No. ~~145~~149, "~~Rescission~~Amendment of ~~FASB~~Statement 133 ~~Statements~~on ~~No. 4,~~Derivative 44Instruments and ~~64,~~Hedging ~~Amendment~~Activities" ~~of FASB Statement No~~("SFAS 149"). SFAS ~~13,~~149 amends and ~~Technical~~clarifies ~~Corrections."~~financial ~~The~~accounting ~~statement~~and ~~updates,~~reporting ~~clarifies~~for ~~and~~derivative ~~simplifies~~instruments, ~~existing~~including ~~accounting~~certain ~~pronouncements.~~derivative ~~The~~instruments ~~provisions~~embedded ofin ~~this~~other ~~statement~~contracts ~~related~~(collectively, referred to ~~rescission~~as ofderivatives) ~~Statement~~and 4for ~~shall~~hedging beactivities ~~applied~~under ~~in fiscal years beginning after May~~SFAS ~~15, 2002~~133. ~~The~~This ~~provisions~~statement inis ~~paragraphs~~effective 8for ~~and~~contracts ~~9(c)~~entered ofinto ~~the~~or ~~statement~~modified ~~related~~after toJune 30, ~~Statement~~2003, 13and ~~shall~~for behedging ~~effective~~relationships ~~for~~designated ~~transactions occurring~~ after ~~May~~June 1530, ~~2002~~ 2003. We ~~are~~have ~~considering~~not yet determined the ~~Standard~~effect ~~and~~of ~~its~~the ~~effect~~adoption of SFAS 149 on our operating results or financial ~~statements~~condition.

In ~~July~~May ~~2002~~2003, the FASB issued Statement ~~of Financial Accounting Standards~~ No. ~~146,~~150 "Accounting ~~for~~For ~~Costs~~Certain ~~Associated~~Financial Instruments with ~~Exit~~Characteristics orof ~~Disposal~~both ~~Activities."~~Liabilities ~~The~~and ~~statement~~Equity" ("SFAS 150"). ~~requires~~SFAS 150 ~~companies~~establishes tostandards ~~recognize~~for ~~costs~~how ~~associated~~a company classifies and measures certain financial instruments with ~~exit~~characteristics orof ~~disposal~~both ~~activities~~liabilities ~~when~~and ~~they~~equity. ~~are~~It ~~incurred~~requires ~~rather~~that ~~than~~a atcompany ~~the~~classify ~~date~~a financial ofinstrument that is within its scope as a ~~commitment~~liability to(or an ~~exit~~asset orin ~~disposal~~some ~~plan~~circumstances). ~~This~~Many ~~statement~~of ~~replaces previous~~those ~~accounting~~instruments ~~guidance~~were ~~provided~~previously byclassified ~~EITF~~as ~~(Emerging~~equity. ~~issues~~This ~~Task~~statement ~~Force)~~is ~~Issue~~effective ~~No. 94-3.~~for financial ~~Statement~~instruments ~~146~~entered isinto toor bemodified ~~applied~~after ~~prospectively~~May 31, to2003, ~~exit~~and orotherwise

is effective for the first fiscal period beginning after December 15, 2003. We believe the adoption of SFAS 150 will not have a material effect on operating results or financial condition.

Restructuring

In June 2001, our transportation solutions operating segment established a program to exit the parts center business. The charges included severance and employee benefit costs for 293 employees, lease and asset impairment costs to shut down and exit the parts center business by the end of 2001. Due to lease terms and severance agreements, certain facility lease payments will continue through September 2005. During the three and six months ended June 30, 2002, $0.1 million and $0.8 million, respectively, of restructuring credit occurred when we were able to sublease certain parts center facilities earlier than originally estimated.

Forward Looking Statements

•: changes in the market for our services, including declining demand for those services in the logistics market and lower than anticipated growth in the relocation market, could adversely affect our profitability;
•: we may have difficulty integrating future acquisitions;
•: competition in each of the segments of our business could intensify;
•: we are subject to certain risks attendant to our foreign operations, including regulatory restrictions or prohibitions on the provision of our services, potentially adverse tax consequences of operating in multiple jurisdictions and foreign currency exchange risk;
•: latent environmental liabilities, the cost of which cannot be reliably estimated at this time, may arise, or the settlement cost for each site for which we have been identified as a PRP may be significantly higher than our present estimates;
•: the scope of our exemption from antitrust laws may significantly decrease or be eliminated;
•: our network services segment is subject to extensive regulation and such regulation could limit our ability to draw on our insurance subsidiaries' assets to repay our indebtedness;
•: we are subject to a number of regulatory authorities and the violation of laws or regulations promulgated by such authorities, or the failure to maintain required permits and licenses, including environmental permits and licenses, could subject us to fines or, in the event of a serious violation, suspension or revocation of operating authority or criminal penalties;
•: we may not realize anticipated deferred tax assets;
•: our indebtedness may prevent us from responding to certain market conditions, meeting our capital spending program, providing for unanticipated capital investment and taking advantage of business opportunities;
•: our owner/operators are currently not considered to be employees by taxing and other regulatory authorities but should these authorities change their position, our costs could increase significantly;
•: we depend on highly trained executive officers and employees and any difficulty in maintaining our current employees would adversely affect our ability to operate our business; and

•: other factors discussed in our prior Securities and Exchange Commission filings.

We ~~disposal~~assume ~~activities~~no ~~initiated~~obligation ~~after~~to ~~December 31,~~update ~~2002.~~these Weforward-looking ~~are~~statements ~~considering~~or ~~the~~advise ~~Standard~~of ~~and~~changes ~~its~~in ~~effect~~the assumptions on ~~our~~which ~~financial~~they ~~statements~~were based.

~~Quantitative~~ ~~and~~ ~~Qualitative~~ ITEM ~~Disclosures~~3. QUANTITATIVE ~~About~~AND ~~Market~~QUALITATIVE ~~Risk~~ DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, including changes in interest rates and foreign currency exchange rates.

We are exposed to various interest rate risks that arise in the normal course of business. We finance our operations with borrowings comprised primarily of variable rate indebtedness. Significant increases in interest rates could adversely affect our operating margins, results of operations and our ability to service indebtedness. A 1% rate increase would increase our gross interest expense by $3.7 million. The interest rate swap instruments described below would reduce the annual impact of a 1% change by $1.9 million in 2003. An increase of 1% in interest rates payable on our variable rate indebtedness would increase our net annual interest rate expense by approximately $31.3 9 million in the next year~~, and $3~~.~~8 million~~ ~~annually thereafter.~~

We utilize interest rate agreements and foreign exchange contracts to manage interest rate and foreign currency exposures. The principal objective of such contracts is to minimize the risks and/or costs associated with financial and international operating activities. We do not utilize financial instruments for trading purposes. The counterparties to these contractual arrangements are financial institutions with which we also have other financial relationships. We are exposed to credit loss in the event of nonperformance by these counterparties~~. However~~, but we dohave ~~not~~no ~~anticipate~~reason to anticipate nonperformance by the other parties~~, and no material loss would be expected from their nonperformance~~.

We had ~~three~~four open interest rate swap agreements as of ~~September~~June 30, ~~2002~~2003. The intent of these agreements is to reduce interest rate risk by swapping an unknown variable interest ~~rate~~ rate for a fixed rate. These agreements qualify for hedge accounting treatment., ~~Therefore~~therefore, for the effective position of these derivatives, market rate changes are reported in ~~Other~~accumulated ~~Comprehensive~~other comprehensive ~~Income~~income. The following is a recap of each agreement.

Notional amount	$4060.0 million	$7060.0 million	$2040.0 million	$20.0 million
Fixed rate paid	43.9110%	52.4489%	42.~~785~~43%	2.44%
Variable rate received	31 month LIBOR	1 month LIBOR	1 month LIBOR	1 month LIBOR
Expiration date	March 2003	December 2002	April 2003
Effective date	January 2003	March 2003	April 2003	April 2003
Expiration date	January 2007	March 2006	April 2005	April 2005

Assets, liabilities, and commitments that are to be settled in cash and are denominated in foreign currencies for transaction purposes are sensitive to changes in currency exchange rates. All material trade receivable balances are denominated in the host currency of the local operation. For the ~~nine~~six months ended ~~September~~June 30, ~~2002~~2003 and ~~2001~~ 2002, we recognized a currency ~~gains~~loss of $0.15 million and ~~$0.8 million~~an insignificant gain, respectively, for transactional related items.

From time to time, we utilize foreign currency forward contracts in the regular course of business to manage our exposure against foreign currency fluctuations. The forward contracts establish the exchange rates at which we will purchase or sell the contracted amount of U.S. Dollars for specified foreign currencies at a future date. We utilize forward contracts which are short-term in ~~duration~~maturity (less than one year). The major currency exposures hedged by us are the Australian dollar, the British pound sterling and the Euro. The contract amounts of foreign currency forwards at ~~September~~June 30, ~~2002~~2003 and ~~December 31,~~2002 ~~2001~~ were $852.42 million and $3.56 million, respectively. A hypothetical 10% adverse movement in foreign exchange rates applied to our foreign currency exchange rate sensitive instruments held as of ~~September~~June 30, ~~2002~~2003 would result in a hypothetical loss of approximately $03.841 million. ~~Changes~~Because these derivatives do not qualify for hedge accounting treatment, changes in fair value relating to these derivatives are recognized in current period earnings. For the ~~nine~~six months ended ~~September~~June 30, ~~2002~~2003 and ~~2001~~2002 we recognized a loss of $01.29 million and a gain of $0.41 million, respectively, resulting from changes in the fair value of foreign currency ~~derivaties~~derivatives.

The company holds various convertible bonds in the investment portfolio of our insurance operations. The value of the conversion feature is bifurcated from the value of the underlying bond. Changes in fair

We hold various convertible bonds in the investment portfolio of our insurance operations. The value of the conversion feature is bifurcated from the value of the underlying bond. Changes in fair value are recorded in current period earnings. For the ~~nine~~six months ended ~~September~~June 30, ~~2002~~2003 and ~~2001~~2002, we recognized a loss of $0.31 million and gain of $1.0.8 million, respectively. ofThe insurance investment portfolio also included marketable equity securities which are classified as available-for-sale and are recorded at fair value within other assets on our balance sheet. Unrealized holding gains and losses, ~~respectively~~net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive income until realized.

~~Other~~ ~~assets~~ ~~at September 30, 2002, included marketable equity securities which are classified as available-for-sale and are recorded at fair value. Unrealized holding gains and~~ ~~losses,~~ITEM ~~net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive income until realized~~4. CONTROLS AND PROCEDURES

~~Restructuring~~ Under the supervision and with the participation of management, our chief executive officer and chief financial officer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures within 90 days of the filing date of this quarterly report, and, based on their evaluation, the chief executive officer and chief financial officer have concluded that these controls and procedures are effective. There were no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures are also designed to ensure that information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

In June 2001, our logistics services operating segment established a program to exit the parts center business. The charges included severance and employee benefit costs for 293 employees, lease and asset impairment costs to shut down and exit the parts center business by the end of 2001. Due to lease terms and severance agreements, certain facility lease payments will continue through September 2005. During the nine months ended September 30, 2002, $0.8 million of restructuring credit occurred when we were able to sublease certain parts center facilities earlier than originally estimated.

Forward Looking Statements

This Form 10-Q may contain forward-looking statements which include assumptions about future market conditions, operations and results. These statements are based on current expectations and are subject to risks and uncertainties. They are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Among the many factors that could cause actual results to differ materially from any forward-looking statements are the changes in the markets for our products and services, including the future growth of the logistics and relocation markets, expected characteristics of competition, foreign exchange risk, expected actions of third parties such as agents, representatives, owner/operators and suppliers and other factors discussed in our prior Securities and Exchange Commission filings. We assume no obligation to update these forward-looking statements or advise of changes in the assumptions on which they were based.

Controls and Procedures

Under the supervision and with the participation of management, our chief executive officer and chief financial officer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures within 90 days of the filing date of this quarterly report, and, based on their evaluation, the chief executive officer and chief financial officer have concluded that these controls and procedures are effective. There were no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures are also designed to ensure that information is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

PART II. ~~Other~~OTHER ~~Information~~ INFORMATION

~~Item~~ITEM 1. ~~Legal~~LEGAL ~~Proceedings~~ PROCEEDINGS

We have produced and are producing records in response to two grand jury subpoenas issued in connection with an investigation being conducted by attorneys in the Department of Justice ~~Item~~Antitrust ~~2. Changes~~Division through a grand jury in ~~Securities~~the ~~and~~Eastern ~~Use~~District of ~~Proceeds~~ Virginia. We are cooperating with the investigation and understand that numerous other companies have received similar subpoenas.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None

~~Item~~ITEM 3. ~~Defaults~~DEFAULTS ~~upon~~UPON ~~Senior~~SENIOR ~~Securities~~ SECURITIES

None

~~Item~~ITEM 4. ~~Submission~~SUBMISSION ofOF ~~Matters~~MATTERS toTO aA ~~Vote~~VOTE ofOF ~~Security~~SECURITY ~~Holders~~ HOLDERS

None

~~Item~~ITEM 5. ~~Other~~OTHER ~~Information~~ INFORMATION

~~None~~(a) Due to the acquisitions in 2002 and a desire to organize the business along new lines, the Company has realigned certain businesses within its segment structure. Segment information as of and for the years ended December 31, 2002, 2001 and 2000, presented in realigned format.

Item 6. Exhibits and Reports on Form 8-K

December 31, 2002:	Revenues		Depreciation and Amortization(1)		Income (Loss) from Operations		Total Assets(2)
Relocation Solutions—North America	$	1,538,725	$	22,428	$	39,614	$	717,422
Relocation Solutions—Europe and Asia Pacific		407,972		17,058		24,840		374,794

Global Relocation Solutions		1,946,697		39,486		64,454		1,092,216
Network Services		125,042		3,118		26,453		223,465
Transportation Solutions		108,194		1,174		3,275		20,282

Consolidated Totals	$	2,179,933	$	43,778	$	94,182	$	1,335,963

10.1 Employment Agreement, dated July 8, 2002, between SIRVA, Inc. and Brian P. Kelley.

Filed on August 13, 2002 indicating compliance with Sections 13(a) or 15(d) of the Securities Exchange Act of 1934.

December 31, 2001:	Revenues		Depreciation and Amortization(1)		Income (Loss) from Operations			Total Assets(2)
Relocation Solutions—North America	$	1,652,135	$	25,872	$	15,142		$	609,451
Relocation Solutions—Europe and Asia Pacific		387,081		20,104		25,976			312,768

Global Relocation Solutions		2,039,216		45,976		41,118			922,219
Network Services		84,210		659		18,478			149,609
Transportation Solutions		125,877		2,107		(6,294	)		23,986

Consolidated Totals	$	2,249,303	$	48,742	$	53,302		$	1,095,814

December 31, 2000:	Revenues		Depreciation and Amortization(1)		Income (Loss) from Operations
Relocation Solutions—North America	$	1,791,803	$	29,053	$	8,424
Relocation Solutions—Europe and Asia Pacific		372,745		21,834		23,730

Global Relocation Solutions		2,164,548		50,887		32,154
Network Services		75,812		704		17,365
Transportation Solutions		138,334		2,289		326

Consolidated Totals	$	2,378,694	$	53,880	$	49,845

(1): Depreciation and amortization are comprised of depreciation, goodwill amortization (prior to January 1, 2002), intangibles amortization in 2002 and deferred agent contract amortization.
(2): Total assets by segment are specific assets such as trade receivables and property and equipment. Assets also include allocated assets such as computer hardware and software, contracts receivable associated with equipment sales, deferred taxes, goodwill and intangible assets.

Specified items related to segment assets:

	Year Ended December 31, 2002 Capital Expenditures		Year Ended December 31, 2001 Capital Expenditures		Year Ended December 31, 2000 Capital Expenditures
Relocation Solutions—North America	$	13,296	$	27,195	$	38,134
Relocation Solutions—Europe Asia Pacific		18,335		20,840		16,943

Global Relocation Solutions		31,631		48,035		55,077
Network Services		1,648		44		7
Transportation Solutions		51		269		293

Consolidated Totals	$	33,330	$	48,348	$	55,377

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits

31: Certifications required by Rule 13a-14(a).
32: Certifications required by Section 1350 of Chapter 63 of Title 18 of the United States Code.

(b)

Reports on Form 8-K

Report on Form 8-K filed on May 9, 2003 reporting certifications pursuant to 18 United States Code, Section 1350.

SIGNATURES

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

	NORTH AMERICAN VAN LINES, INC.
Date November 12, 2002		/s/ RONALD L. MILEWSKI Ronald L. Milewski Chief Financial Officer
Date August 14, 2003		/s/ JOAN E. RYAN Joan E. Ryan Chief Financial Officer
Date November 12, 2002		/s/ DENNIS M. THOMPSON Dennis M. Thompson Controller
Date August 14, 2003		/s/ DENNIS M. THOMPSON Dennis M. Thompson Controller

3839

CERTIFICATION

I, Ronald L. Milewski, certify that:

1. I have reviewed this quarterly report on Form 10-Q of North American Van Lines, Inc.

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date November 12, 2002

/s/ RONALD L. MILEWSKI Ronald L. Milewski Chief Financial Officer

CERTIFICATION

I, Brian P. Kelley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of North American Van Lines, Inc.

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

Date November 12, 2002

/s/ BRIAN P. KELLEY Brian P. Kelley Chief Executive Officer

QuickLinks

PART I.

ITEM 1. FINANCIAL STATEMENTS

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

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

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

SIGNATURES

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