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

FORM 10-K

Commission file number: 333-96233

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

        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 ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

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

        The registrant does not have a class of equity securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 and there is no public market for voting stock of the registrant. See Part II, Item 5 of this Report.

        As of December 31, 2002 the registrant had outstanding 1,000 shares of $0.01 par value common stock.

DOCUMENTS INCORPORATED BY REFERENCE
None

TABLE OF CONTENTS

        When we refer to "North American Van Lines", "NAVL", "our company", "our", "we" or "us", we are referring to North American Van Lines, Inc., together with its subsidiaries and their predecessors, except where the context otherwise requires. When we refer to "SIRVA," we are referring to our parent, SIRVA, Inc., formerly known as Allied Worldwide, Inc.

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ITEM 1.    BUSINESS

General

        We are a leading global relocation and moving services company and also the largest logistics services provider among all U.S. van lines. We are a global network manager of agents, owner/operators and company-owned branches with locations in 21 countries. Our diversified customer base includes many leading Fortune 500 and FTSE-100 companies, private transferees and the government and military of the United States and other countries. Our business was originally organized in 1933 as a Michigan corporation. We were incorporated as a Delaware corporation on August 20, 1993.

        On March 29, 1998, SIRVA was incorporated and capitalized by Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership ("Fund V"). A wholly owned subsidiary of SIRVA was then capitalized for the purpose of acquiring all of the capital stock of North American Van Lines from Norfolk Southern Corporation (the "1998 Acquisition"). The 1998 Acquisition was accounted for as a purchase and resulted in a new basis of accounting for North American Van Lines. On November 19, 1999, North American Van Lines, through SIRVA, received additional capital from Fund V for the purpose of partially financing the acquisition of the NFC Moving Services Group (the "Allied Acquisition") from Exel plc, formerly known as NFC plc ("Exel"). On May 3 and April 12, 2002, North American Van Lines, through SIRVA, received additional capital from Clayton, Dubilier & Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership ("Fund VI") for the purpose of completing the acquisitions of the business ("CRS") of Cooperative Resource Services Ltd. and the business ("NAIT") of National Association of Independent Truckers. See "Management's Discussion and Analysis of Financial Condition and Results of Operation—Overview". Fund V and Fund VI are private investment funds managed by Clayton, Dubilier & Rice, Inc. a private equity investment firm organized as a Delaware corporation.

Business Segments

        We operate as a global provider of relocation services, household goods moving, business moving, storage and logistics services operating under the brand names of SIRVA Relocation, northAmerican Van Lines, Allied Van Lines, Global Van Lines, Allied International, Pickfords, Allied Pickfords and northAmerican Logistics, among others, with operations located throughout the United States, Canada, the United Kingdom, Europe, Australia, New Zealand and other Asia Pacific locations. We conduct our U.S. and Canadian operations primarily through a network of exclusive domestic agents and affiliated representatives for international moving. We conduct our other foreign operations primarily through 212 locations which we own or lease and operate directly, using selected other affiliated representatives to complete our service offering on a worldwide basis. See "Financial Statements and Supplementary Data" for financial information about geographic areas.

        We are not dependent on any single or major group of customers or suppliers for our operating revenues. We organize our operations in five reportable segments: moving services—North America, moving services—Europe and Asia Pacific, relocation services, insurance services and logistics services. The first three segments comprise global relocation services. See "Financial Statements and Supplementary Data" for financial information about segments.

Moving Services—North America Segment

        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. For the year ending December 31, 2002, the moving services—North America segment's revenue was $1,140.0 million.

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        This business is primarily conducted through a network of approximately 1,300 exclusive northAmerican, Allied or Global agent locations in the United States and Canada. Agents are independently owned local moving companies that provide customers with the local packing, warehousing and a portion of the hauling required to support household moves anywhere in the world. We, in turn, provide our agents with a broad range of services including identification and coordination of hauling capacity, coordination of shipments, optimization of capacity, sophisticated transportation and logistics technology, brand management and a variety of other marketing services.

        We participate in all lines of the residential moving interstate transportation business and have a highly diversified customer base, including (1) corporate accounts, (2) private transferees and (3) government and military.

        The northAmerican, Allied and Global agents are the primary sales channels for most of our business activities, for which they receive commissions, and market our services locally or as intermediaries with customers. Owner/operators are independent contractors who own and drive their tractors for us. The majority of the equipment used in the van line network is owned by our network of agents and owner/operators. See "—Agent Network" and "—Owner/Operators."

        For domestic moves, we coordinate origin and destination activities through our agents. For international moves originating in the United States and Canada, our northAmerican and Global lines act primarily as freight forwarders, arranging for cross-border transportation services with third-party providers and subcontracting with non-exclusive representatives for the hauling, delivery and unpacking required at the destination. With respect to Allied, international moves are coordinated by Allied's international moving services network. This network consists of Allied's wholly owned moving services companies and franchisees in the major non-U.S. markets and independent affiliated agents in major U.S. markets. Each network member is responsible for providing origin and freight-forwarding services for moves originating in its country of operation, as well as coordinating destination services using network members in the country of delivery. Customers moving either domestically or internationally contact local agents who obtain shipment details and provide moving cost estimates. Once a quote turns into a booking, the agents register the move with us, and we coordinate all parties involved in the move, including the origination and processing of all documents associated with the transaction.

        The moving services—North America segment has historically experienced stable pricing for its service offerings, although moving revenues are subject to seasonal swings and competition from other van lines or service providers for available shipments. See "—Competition" and "Management's Discussion and Analysis of Financial Condition and Results of Operation—Seasonality".

Moving Services—Europe and Asia Pacific Segment

        The moving services—Europe and Asia Pacific segment, operating principally as Pickfords or Allied Pickfords, operates in the United Kingdom, Europe, Australia, New Zealand and other Asia Pacific locations and provides complete domestic and international moving services. It also provides business services, including office moving and records management in most of the aforementioned locations. This segment's revenue is completely dependent on foreign operations, and we are subject to certain customary risks inherent in carrying on business abroad, including the effect of regulatory and legal restrictions imposed by foreign governments. For the year ending December 31, 2002, the moving services—Europe and Asia Pacific segment's revenue was $350.6 million.

        This business is conducted by operating local moving branches which provide similar services as agents perform in the moving services—North America segment. Unlike the moving services—North America segment, the moving services—Europe and Asia Pacific segment owns or leases property and vehicle assets used in its network.

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        Operating in the United Kingdom under the brand name Pickfords, this segment, through company-owned branches, deals directly with corporate clients, private transferees and government departments. In Australia and New Zealand, we also provide domestic and international moving services through company-owned branches operating primarily under the Allied Pickfords brand name and some smaller brands. In Asia, the network is a combination of company-owned branches, franchises and preferred agents, with a focus on international rather than domestic moving.

        In addition to its residential relocation services, Pickfords also provides crating services, storage services and records management which includes, among other things, the cataloging, storage, retrieval, look-up, destruction and transportation of customers' records. Pickfords also provides a full range of office moving services involving the transportation of office furnishings and equipment in connection with the relocation of any aspect of a business' operations throughout Europe. Similar services are offered by Allied Pickfords in Australia and New Zealand.

        Allied Arthur Pierre, based in Belgium, is a market leader in international residential moving in Belgium and also operates in Luxembourg and France. Our other operations in continental Europe include Allied Varekamp in the Netherlands and Maison Huet in France. Allied also has operations in major cities in Eastern Europe, including Budapest, Moscow, Prague and Warsaw. We also operate The Baxendale Insurance Company Ltd. (licensed in Ireland) as part of the moving services—Europe and Asia Pacific segment.

        This segment has also experienced stable pricing historically for its moving service offerings in a competitive market for its services, although moving revenues are subject to seasonal swings. See "Management's Discussion and Analysis of Financial Condition and Results of Operation—Seasonality." Because we own or lease our facilities and equipment, we have some ability to adjust pricing, labor and equipment based on regional demands.

Relocation Services Segment

        The relocation services segment is comprised of SIRVA Relocation LLC, a Delaware limited liability company ("SIRVA Relocation") and its wholly owned subsidiaries, which provide comprehensive global relocation services to companies and their employees from offices in the U.S. and Australia and, in early 2003, Hong Kong. The relocation services segment will also provide comprehensive relocation services to companies and their employees from offices in the United Kingdom upon completion of our acquisition of The Rowan Group PLC and Rowan 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, from RS Acquisition Holding, LLC, a Delaware limited liability company and a wholly owned subsidiary of SIRVA. Under the terms of the purchase agreement between RS Acquisition Holding LLC and us, we agreed to acquire Rowan Simmons no later than April 29, 2003. Our services include home marketing assistance, home sale benefits including buyout benefits, home purchase assistance, gross-up protection, group move management, expatriate assistance, title and closing services, title insurance, move management, van line invoice audits, temporary housing assistance, spousal and family assistance, rental assistance, expense management, policy consultation and process management. For the year ending December 31, 2002, the relocation service segment's revenue was $69.8 million.

        The relocation services segment's revenue sources include client services fees, referral fees from real estate brokers and commissions from moving services companies. While there is constant pressure from clients to maintain or reduce fees, client service fees have remained relatively steady. We also have engaged in significant efforts to reduce our costs and manage our suppliers, most notably by instituting programs to reduce realtor fees and those other costs impacting relocations, in an effort to maximize and maintain the quality of services provided.

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        We also provide title agency services in Ohio through our wholly owned subsidiary, SIRVA Title Agency, Inc., an Ohio corporation formerly known as CRS Title Agency, Inc., and in 32 states through our 50% interest in National Settlement Management, LLC, an Ohio limited liability company ("National Settlement").

Insurance Services Segment

        The insurance services segment provides a variety of coverages specifically tailored for the trucking and moving industries, including occupational accident, auto physical damage, non-commercial liability, commercial auto liability, cargo warehouse and cargo liability. It also handles the claims resulting from these coverages. It is comprised of TransGuard Insurance Company of America, Inc., an Illinois corporation ("TransGuard") and a multiple-line property and casualty insurance company, and NAIT. TransGuard is licensed in Illinois and also holds licenses in 46 other states and the District of Columbia. For the year ending December 31, 2002, the insurance services segment's revenue was $81.6 million.

        Sales and marketing of the insurance services products are handled on a retail, as well as a wholesale, basis. This is accomplished through memberships in various trade organizations as well as use of approximately 200 select independent agents.

Logistics Services Segment

        The logistics services segment operates in North America and 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 us, our agents and owner-operators. For the year ending December 31, 2002, the logistics services segment's revenue was $535.2 million.

        Our logistics services segment manages the coordination of complex supply chain networks, with a focus on high-value products that require specialized transport and handling. Specifically, we provide our clients with integrated supply chain management, distribution facilities, turnkey new store equipment transportation and set up, freight forwarding and product assembly. Our logistics services segment is organized into three business units:

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logistics solutions, which uses customized information technology to coordinate a variety of services such as finished goods, order fulfillment, project-specific delivery management and the tracing of products through the supply chain;



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specialized transportation;



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network services, which provides freight forwarding and brokerage services to customers, as well as vehicle and driver services to agents and owner-operators; and



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European operations, which handles logistics solutions and specialized transportation of high-value products to and from any major city in the United Kingdom and Europe through wholly owned subsidiaries operating under the trade names midiData and northAmerican Logistics.

Logistics services manages the cost efficiency of clients' shipments primarily through its OnTrac Network, a system that combines logistics tools with 31 distribution centers and hundreds of agent service points. We have established numerous ongoing relationships with key corporate logistics clients, including many Fortune 500 companies. No single customer represented more than 6.0% of our logistics services revenue in 2002. These customers are located primarily in the United States, Canada and Europe, with distribution systems that range from regional to global.

        This segment is driven by corporate customers' increasing need for specialized handling of sophisticated equipment. It has traditionally been focused largely on the computer, electronics and medical

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equipment sectors. With our fleet of trailers specifically equipped to handle the loading, unloading and hauling of sensitive, technology-based products, we can combine our physical distribution capabilities with our logistics solutions to provide our clients with a complete package of distribution management. The specialized product delivery process is similar to that in moving services, where corporate accounts contact local representatives to establish shipment requirements and we then coordinate the availability of our specially equipped trailers with the availability of owner/operators who provide the tractor and perform the hauling and handling services.

        Our revenues are affected by competition from other van lines and from less-than-truckload and logistics service providers, as well as changes in business demand for computer, electronics and other specialty products. See "—Competition".

Agent Network

        In our moving services—North America segment we have a network of approximately 1,300 agent locations operating under the Allied, Global or north American brand names which provide (1) local customer service, packing, loading and warehousing, (2) long-distance hauling, delivery, installation and set-up services and (3) direct sales solicitation and customer development in the markets where they are located. The agents also own assets associated with operating their local moving and storage business (warehouse(s), tractors, trailers and associated other packing and moving equipment) and in many instances have contracts with owner/operators or have hired employee drivers to bring hauling capacity to the network.

        We have established, long-term relationships with our branded agent network, which on an individual basis have often extended to a multi-generation affiliation with us. The relationship with the agent network is governed by an agency contract which defines the terms and conditions of their exclusive representation of us on all interstate household goods shipments, as well as the compensation structure for services provided. While we enter into certain short-term contracts, we will often enter into long-term contracts, which extend from 3 to 12 years in length, with selected agents. This process provides security to both parties, and also ensures us long-term representation and revenue in key markets. We have long-term contracts in place with agents who represent approximately 83% of U.S. moving services—North America's 2002 revenue. As a result of these arrangements, we have historically experienced relatively low agent turnover and no one agent constituted more than 5% of moving services—North America's 2002 revenue.

        The logistics services segment utilizes the same agent network for a majority of the sales and a portion of the transportation, warehousing and delivery services it provides for its specialized product customers. The agent contract provides for exclusive representation of us and also defines the compensation structure for services provided. Due to geographic concentrations of specialized transportation customers in major markets, ten agents book approximately 60% of the specialized transportation's logistics services 2002 revenue. Approximately 90% of specialized transportation's logistics services revenue is booked by agents who are under long-term contract with us.

Owner/Operators

        Owner/operators are independent contractors who work with either us or with our agents. They:

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provide the hauling skills required to transport shipments interstate;



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provide or contract with temporary workers to provide labor required for servicing the customer;



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provide an element of customer service at the pick-up or delivery point; and



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supply equipment they own to provide hauling services.

The owner/operators enter into contractual agreements either with us directly or through our agents who set compensation rates and other terms. Owner/operators do not generate revenue through any sales or marketing efforts. We maintain approximately 700 company or agent owner/operators for relocation

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services and approximately 800 company owner/operators for logistics services. These owner/operators own or lease their own tractors but, in most cases, pull company/agent-owned trailers. Owner/operators provide most of the logistics hauling capacity and supplement the residential moving fleet of agent drivers. In addition to the primary owner/operator contract for transportation, we have also developed additional programs or services offered to owner/operators that provide us with additional sources of revenue, including tractor sales and financing, fleet service maintenance, fuel sales and physical damage insurance coverage. As we believe is the case in general in the van line industry, we have had some difficulty in attracting and retaining qualified owner/operators.

Sales and Marketing

        Our sales, customer support and marketing department evaluates target markets and sets a customer-driven sales agenda, ensures the consistency of customer communication, directs local input through the Corporate Marketing Agent Advisory Council and provides resources for agents to locally customize advertising and sales-support programs.

        Our sales force is comprised of experienced agents and product sales specialists. We provide a broad range of professional sales training programs and customized sales management training to our agents and employees. We also support industry association-based training and certification programs such as the American Moving and Storage Association's Certified Moving Consultant and Registered International Mover.

        Advertising campaigns work in tandem with telephone directory advertising to create brand awareness in the industry and the market. We advertise primarily on cable television and through national billboard buys. Advertising targets key customer segments as well as owner/operators.

Competition

        The moving services business is highly competitive and fragmented. With respect to our moving services—North America segment, aside from the handful of large van lines, the industry remains extremely fragmented with many small private players that may have strong positions in local markets. We compete primarily with other van lines, independent movers and self-storage and self-haul service providers. Some of our chief competitors in the moving services—North America segment are Unigroup (United and Mayflower), Atlas and Bekins. Quality and customer service in the moving industry are key factors in the mover selection process. We invest considerable time and effort to provide value-added services to our customers. This service is exemplified through our history of on-time delivery, strong safety record, numerous quality recognition awards, diverse customer base and long-term agent relationships.

        With respect to our moving services—Europe and Asia Pacific segment, the industry is also extremely fragmented between regional, national and local companies. Many of these companies may specialize in segments of the moving market such as international, domestic or office moving. Price is a key factor in selection of a mover, so there is a need to operate cost effectively while maintaining high customer service standards. Our chief competitors in the moving services—Europe and Asia Pacific segment include Crown Relocations, Britannia, TransEuro, Amertrans, Sterling, Michael Gerson, White & Company and Interdean in residential moving and Harrow Green, Edes and Business Moves in office moving.

        The logistics services business is also highly competitive and fragmented but is consolidating because of the advantages of global distribution networks, large vehicle fleets and global information technology systems. In addition, consolidation is driven by customers' desire for integrated services, high growth in international and cross-border delivery segments and, in Europe, deregulation of European delivery markets. Industry participants are acquiring, merging or forming alliances with partners that can expand global reach, breadth of services or technological capabilities in order to better enable those participants to compete in a rapidly changing global environment. In specialized transportation services, we compete with a broad spectrum of transportation providers including freight forwarders, brokers and various logistics providers. The primary basis of competition is in performance, specifically within our information

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technology systems. We offer sophisticated systems approaches to manage and monitor the flow of goods we are transporting and to provide attractive logistics solutions services. Both in North America and Europe, logistics services providers are bundling services to offer single-source logistics solutions. Some of our primary competitors in supply chain management services are Ryder Logistics, FedEx Logistics, Menlo Logistics, Deutsche Post and UPS Logistics. United Van Lines and Uni-Data continue as formidable competitors in the specialized transportation sector.

        Competition for the freight that we transport is based primarily on service, freight rate, reliability, transit times and scope of operations. In the United States, competition and the reduction in regulation caused by the Motor Carrier Act of 1980 has created downward pressure on the logistics industry's pricing structure.

        The relocation services business is highly competitive. Our two largest competitors, Cendant and Prudential, provide relocation services as an ancillary function to their core businesses (respectively, marketing/franchise management and insurance/financial services). The remainder of the relocation business is highly fragmented. We are one of the few relocation services providers that does not have any real estate affiliations.

        The insurance services business within the moving and storage industry is highly competitive. We consider TransGuard to be a leading insurance carrier in this industry. With an expansion into worker's compensation coverage, TransGuard will be one of only two carriers offering a complete insurance program for moving and storage agents. TransGuard's largest competitors include Vanliner, Royal Sun Alliance and Protective Insurance Company.

Government Regulation

        Our operations are subject to various federal, state, local and foreign laws and regulations that in many instances require permits and licenses. Our U.S. motor carrier operations, as a common and contract carrier, are regulated by the Surface Transportation Board (the "STB") which is an independent, three-member agency within the U.S. Department of Transportation (the "DOT"). The STB has jurisdiction similar to the former Interstate Commerce Commission (the "ICC") which includes issues such as rates, tariffs, antitrust immunity and undercharge and overcharge claims. The DOT, and in particular the Federal Highway Safety Administration (the "FHWSA") within the DOT, also has jurisdiction over such matters as safety, the registration of motor carriers, freight forwarders and brokers, insurance (financial responsibility) matters, financial reporting requirements and enforcement of leasing and loading and unloading practices. In addition to motor carrier operations, we also conduct domestic operations as a licensed or permitted freight forwarder and property broker. Many of the licenses and permits that we hold were issued by the ICC. With respect to interstate motor carrier operations, the FHWSA is the principal regulator in terms of safety, including carrier and driver qualification, drug and alcohol testing of drivers, hours of service requirements and maintenance and qualification of equipment.

        We are an ocean transportation intermediary pursuant to the Shipping Act of 1984, as amended. As such, we hold ocean freight forwarder licenses issued by the Federal Maritime Commission (the "FMC") and are subject to FMC bonding requirements applicable to ocean freight forwarders. We also conduct certain operations as a non-vessel-operating common carrier ("NVOCC") and are subject to the regulations relating to FMC tariff filing and bonding requirement bonds, and under the Shipping Act of 1984, particularly with respect to terms thereof proscribing rebating practices. The FMC does not currently regulate the level of our fees in any material respect.

        Our U.S. customs brokerage activities are licensed by the United States Department of the Treasury and are regulated by the United States Customs Service. We are also subject to similar regulations by the regulatory authorities of foreign jurisdictions in which we operate.

        With respect to U.S. state and Canadian provincial licenses, the permitting and licensing structure largely parallels the U.S. federal licensing regulatory structure.

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        In the United States, NAVL, Allied and Global have been participants in certain collective activities, including collective rate-making with other motor carriers pursuant to an exemption from the antitrust laws as currently set forth in The Motor Carrier Act of 1980. Over the years, the scope of the antitrust exemption has decreased and there can be no assurance that such exemption from the antitrust laws will continue in the future. The loss of such exemption could result in an adverse effect on our operations or financial condition.

        In Europe, including the United Kingdom, we hold "O" (operators) licenses, international transport licenses and certificates of professional competence. These licenses are approvals from the relevant local authority permitting the operation of commercial vehicles from specified bases. One of the prerequisites for these licenses is the employment by the relevant business of individuals who hold certain certificates of professional competence.

        TransGuard and our other insurance subsidiaries such as The Baxendale Insurance Company Ltd., which is part of our moving services—Europe and Asia Pacific segment, are subject to extensive supervision and regulation by insurance regulators in their respective jurisdictions, including regulations limiting the transfer of assets, loans, or the payments of dividends from such insurance subsidiaries to their affiliates, including us. Such regulation could limit our ability to draw on these insurance subsidiaries' assets to repay our indebtedness.

        SIRVA Title Agency, Inc. and its affiliate National Settlement must be licensed in any state in which they act as an agent to offer title insurance. SIRVA Title Agency is licensed in Ohio and National Settlement is licensed in 32 states. Each state has a varying degree of regulatory and annual reporting requirements. In addition, in order to receive referral fees, SIRVA Relocation is currently licensed, through individual employees, as a real estate broker in Ohio, Illinois, Colorado and Minnesota. Internal Revenue Service rules and regulations concerning home sale transactions also have a significant impact on our relocation services segment.

        Any violation of the laws and regulations discussed above could increase claims and/or liabilities, including claims for uninsured punitive damages. Failure to maintain required permits or licenses, or to comply with applicable regulations, including environmental permits and regulations, could subject us to fines or, in the event of a serious violation, suspension or revocation of operating authority or criminal penalties. All of these regulatory authorities have broad powers generally governing activities such as authority to engage in motor carrier operations, rates and charges and certain mergers, consolidations and acquisitions. Although compliance with these regulations has not had a materially adverse effect on our operations or financial condition in the past, there can be no assurance that such regulations or any changes to such regulations will not materially adversely impact our operations in the future.

        Our international operations are conducted primarily through local branches owned or leased by various subsidiaries in 21 countries outside the United States and in a number of additional countries through agents, franchises and non-exclusive representatives. We are subject to certain customary risks inherent in carrying on business abroad, including the effect of regulatory and legal restrictions imposed by foreign governments. As discussed above under "—Moving Services—Europe and Asia Pacific Segment," our moving services—Europe and Asia Pacific operations are conducted almost exclusively outside of the United States.

Environmental Matters

        Our operations are subject to a range of environmental requirements in the various foreign, federal, state and local jurisdictions in which we operate. In particular, because we own or lease or have in the past owned or leased facilities at which underground storage tanks are located and operated, we are subject to regulations governing the design, construction and operation of underground storage tanks and governing releases from these tanks. We have incurred, and will continue to incur, costs related to our investigation and cleanup of releases of materials from underground storage tanks, though such costs are not expected to have a material adverse effect on our financial position, results of operations or liquidity.

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        We have been named as a potentially responsible party ("PRP") in several environmental cleanup proceedings by federal or state authorities or by other PRPs. 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 reserves established. It is possible that additional claims or lawsuits involving known or unknown environmental matters may arise in the future.

        We actively monitor our compliance with various U.S. federal, state and local environmental regulations and management believes that we are presently in material compliance with all applicable U.S. federal, state and local environmental laws and regulations. Underground storage tanks are monitored on a regular basis by company personnel and pressure-tested periodically by qualified third-party providers. The tanks have leak detection systems for early leak detection. Our two main fleet services facilities have environmental assessments on a regular basis. Periodic employee training for proper hazardous material handling is performed in compliance within the required three-year cycle. Further, certain employees are trained on proper shipping procedures, including DOT and International Air Transport Association regulations. The majority of expense for such testing and training is for personnel costs for designated trainers to monitor compliance with foreign environmental regulations and we believe that we are presently in substantial compliance with all applicable foreign environmental laws and regulations. These compliance costs are included in our results of operations and are not material.

        We can be expected to continue to incur ongoing capital and operating expenses to maintain compliance with applicable environmental requirements, upgrade existing equipment at our facilities and meet new regulatory requirements. While it is not possible to predict with certainty future environmental compliance requirements, management believes that future expenditures relating to environmental compliance requirements will not materially adversely affect our financial condition.

        As conditions may exist on our properties related to environmental problems that are latent or undisclosed, there can be no assurance that we will not incur liabilities or costs, the amount and materiality of which cannot be reliably estimated at this time. However, based on our assessment of facts and circumstances now known, management believes it is unlikely that any identified matters, either individually or in aggregate, will have a material adverse effect on our financial position, results of operations, or liquidity.

Trademarks

        The marks northAmerican®, Allied®, Home Touch® and Worldtrac® are registered trademarks. Other brand or product names used in this prospectus are trademarks or registered trademarks of their respective companies.

        We have been highly active in seeking protection for numerous marks and logos relating to the "northAmerican", "Allied", "Global" and "Pickfords" brands. We have actively contested unauthorized use of the "northAmerican", "Global" and "Allied" marks. We have largely been successful, but in a few exceptional circumstances have tolerated some third-party use of similar marks in transport-related commerce where we felt that there was no confusion by such use and no confusion was likely to occur in the future.

Employees

        As of December 31, 2002, our workforce comprised approximately 6,500 employees, of which approximately 1,700 were unionized. We believe our relationships with our employees are good. The unionized employees consisted of approximately 1,500 employees covered by union agreements in the United Kingdom and approximately 200 employees in Asia, New Zealand and Australia and a small number of U.S. employees in our logistics services business. We have not experienced any major work stoppages in the last ten years.

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ITEM 2.    PROPERTIES

        We own executive and administrative office space used by our moving services—North America and logistics segments at our headquarters at 5001 U.S. Highway 30 West, Fort Wayne, Indiana, which consists of approximately 385,676 square feet. We also operate warehouse space of approximately 211,860 square feet (which is primarily owned). All the other properties used in our operations consist of freight forwarding offices, administrative offices and warehouse and distribution facilities. As of December 31, 2002, we had 269 facilities in 21 countries around the world, 27 of which were owned and 242 of which were leased. We own or lease major facilities in Westmont, Illinois used by our moving services—North America and insurance services segments, in Mayfield Heights, Ohio, used by our relocations services segment, in Canada used by our moving business—North America segment and throughout the United Kingdom, Australia and New Zealand, each used by our moving services—Europe and Asia Pacific segment and own or lease facilities at significant moving and logistics services locations in many countries throughout the world. The following table sets forth our owned or leased properties by location.

        We believe that our office, warehouse and distribution facilities are generally well maintained and suitable to support our current and planned business needs.

ITEM 3.    LEGAL PROCEEDINGS

        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 of $15.2 million was rendered in 2002 and was fully paid by us and two of our insurers. After these insurance payments and reimbursements, we have paid $7.6 million which we believe is fully reimbursable by insurance. TIG Insurance Co. ("TIG"), one of our several co-insurers, filed suit against us, one of our subsidiaries and several other parties in the 191st Judicial District Court of Dallas County, Texas, on September 12, 2002, contesting TIG's and other insurers' coverage obligation and seeking declaratory judgment. NAVL filed a counterclaim and cross-claim against TIG and National Union Fire Insurance Company, seeking reimbursement for all remaining amounts that we paid in satisfaction of the judgment and associated costs and expenses. If TIG prevails, there is the possibility that some or all of the unreimbursed portion of the payment we made may not be reimbursed. We have a reserve that we consider appropriate in the circumstances.

        We have been named as a potentially responsible party ("PRP") in several environmental cleanup proceedings by federal or state authorities or by other PRPs. 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 reserves established. It is possible that additional claims or lawsuits involving known or unknown environmental matters may arise in the future.

        We are involved from time to time in other routine legal matters incidental to our business. We believe that the resolution of such matters will not have a material adverse effect on our financial position or results of operations.

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

        None

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PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        There is no established public trading market for our common stock. We are a wholly owned subsidiary of SIRVA.

ITEM 6.    SELECTED FINANCIAL DATA

        We derived our selected historical financial data for the years 1999 through 2002, for the three-month period ended March 28, 1998 and for the nine month period ended December 26, 1998 from our audited financial statements or those of our predecessor for the periods then ended. Our selected historical financial data for the periods presented ending after November 19, 1999 (the date of completion of the Allied Acquisition) includes financial data of Allied Van Lines, Inc. and its subsidiaries that we acquired ("Allied"). The presentation of selected historical financial data is only a summary and you should read it together with our historical financial statements and related notes.

(1)

On March 29, 1998, SIRVA (whose majority shareholder is Fund V), through its wholly owned subsidiary NA Acquisition Corporation, acquired all of the outstanding shares of common stock of North American Van Lines. On such date, NA Acquisition Corporation was merged into North American Van Lines with North American Van Lines as the surviving

11

corporation and remaining a wholly owned subsidiary of SIRVA. The acquisition was accounted for as a purchase in accordance with U.S. GAAP.

The consolidated financial statements for the three-month period prior to March 29, 1998 have been prepared on the historical cost basis using accounting principles that had been adopted by our predecessor. After our acquisition by Fund V on March 29, 1998, we changed our accounting basis to recognize estimated revenue and related transportation expenses when shipments are delivered, the preferred method under U.S. GAAP. Our predecessor company recognized estimated revenue and related transportation expenses when shipments were loaded. Management estimates that the impact of this difference on reported operating revenues and income from operations is not material.

(2)

Includes financial data of Allied from November 19, 1999. On November 19, 1999, we completed the acquisition of Allied from Exel, which was accounted for as a purchase. The terms of the acquisition provided for an adjustment to the purchase price pertaining to the amount of net controllable assets acquired as of the date of the Allied Acquisition. We were unable to negotiate the final amount of net controllable assets acquired with Exel and, therefore, a third party arbitrator was engaged for resolution of that amount in accordance with the terms of the acquisition agreement.

On September 12, 2001, the third party arbitrator rendered a binding determination. The arbitrator determined that the amount of the net controllable assets as of the acquisition date was greater than the amount estimated in the acquisition agreement by $18.1 million, resulting in an increase of the purchase price of $18.1 million. Interest on the purchase price adjustment of $3.3 million was paid for the period from the acquisition date to the date when we made payment and was accounted for as interest expense. The acquisition agreement also contained indemnification obligations on Exel for certain tax payments made by us on behalf of Exel. These tax payments plus associated interest totaled $4.0 million and were deducted from the purchase price adjustment. Our cash payment to Exel on October 19, 2001, for the net balance owed to Exel totaled $17.4 million. The purchase adjustment resulted in a net increase to goodwill of $18.1 million.

(3)

On December 31, 2001, we completed a stock-for-stock merger with Moveline under an agreement and plan of merger, dated as of November 9, 2001, pursuant to which Moveline merged with one of our wholly owned subsidiaries with such subsidiary as the surviving corporation. Under the terms of the merger agreement, Moveline's stockholders received a fraction of a share of common stock of our parent, SIRVA, for each Moveline share acquired in the merger. Immediately following the merger, we contributed the surviving subsidiary to Allied Van Lines, Inc., another of our wholly owned subsidiaries. Allied Van Lines subsequently merged with that subsidiary, with Allied Van Lines as the surviving corporation. In connection with the stock-for-stock merger, Fund V acquired 1,760,570 additional shares of common stock of SIRVA.

Moveline, which was founded and spun-off by SIRVA on August 1, 2000, had developed and marketed a proprietary information technology-based customer care solution that builds upon the moving industry's historical van-line business model. Prior to the merger, Fund V held a majority of the capital stock of both Moveline and SIRVA.

In accordance with the accounting rules for mergers of entities under common control, our merger with Moveline was accounted for in a manner similar to a pooling-of-interests since it was acquired from Fund V and our parent, SIRVA. Our consolidated financial statements were restated to include the combined results of operations, financial position and cash flows of Moveline since its inception.

As a result of the merger, all material intercompany accounts and transactions with Moveline were eliminated in consolidation.

Operating revenues and net loss previously reported by the separate companies and the combined amounts presented in the accompanying Consolidated Statement of Operations were as follows:

Fees and expenses related to the merger and costs to integrate the combined companies were expensed in the fourth quarter 2001.

(4)

Restructuring and other unusual items have been included in this line item as follows: (a) in the year ended December 31, 2002, we incurred $0.4 million of restructuring and other unusual items, comprised of $7.1 million of impairment charges, due to a reduction in the number of software modules implemented as a result of a change in business strategy in logistics services and $4.6 million of expenses related to the December 2002 SIRVA headquarters building move, partially offset by $7.4 million of pension and retiree medical curtailment gain as the pension plan was frozen and retiree medical benefits were reduced, $3.0 million of gain from the sale of our U.K. industrial moving business and $0.9 million of restructuring credit pertaining to the logistics services' parts centers as we were able to sublease certain parts centers facilities earlier than originally estimated; (b) in the year ended December 31, 2001, we incurred $4.9 million of restructuring charges, of which $4.3 million related to exiting the logistics services' parts center business and associated headcount reductions and $0.6 million related to our moving services—

12

Europe and Asia Pacific segment's U.K. branch network and the elimination of management redundancy within the industrial moving unit (which we refer to as the "Branch System"); (c) in the year ended December 31, 2000, we incurred $4.9 million of restructuring charges consisting of $2.7 million of costs relating to the Branch System and $2.2 million of restructuring charges in connection with implementing Fast Forward (a long-term initiative designed to improve productivity and profitability targeted as improving efficiency by eliminating or streamlining work processes and reducing costs by eliminating redundant equipment, facilities and related headcount); (d) in the year ended December 25, 1999, we incurred $4.1 million of restructuring expense for severance related costs, building lease terminations and losses on the sale of equipment, all related to implementing Fast Forward, and $5.0 million of expense related to a customer contract termination and related settlement costs and (e) in 1998, the predecessor incurred incremental compensation of $4.6 million due to contracts with key executives with incentive provisions to encourage them to remain with the predecessor until a sale of the business was completed.

(5)

During 1999, we retired debt resulting in an extraordinary charge of $3.4 million, net of applicable income tax benefit.

(6)

Effective January 1, 2001 we adopted FAS Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") as amended, which resulted in a change in method of accounting. The cumulative effect of this accounting change was a loss of $0.5 million ($0.3 million, net of tax).

(7)

Total debt consists of long-term debt, current portion of long-term debt, capital lease obligations, amounts outstanding under the revolving credit facility forming part of our senior credit facility and other short-term debt.

(8)

Depreciation and other amortization include depreciation expense for property and equipment, amortization expense for intangible assets and deferred agent contract expenditures and exclude amortization expense for deferred debt issuance costs, which are recorded as part of interest expense.

(9)

For purposes of calculating the ratio of earnings to fixed charges, earnings consist of income from continuing operations plus fixed charges less capitalized interest. Fixed charges consist of (i) interest whether expensed or capitalized, (ii) the amortization of deferred debt issuance costs and (iii) an allocation of one-third of the rental expense from operating leases, which management considers to be a reasonable approximation of the interest factor of operating lease payments. For the year ended December 25, 1999 and the three-month period ended March 28, 1998, earnings were insufficient to cover fixed charges by approximately $1.1 million and $1.3 million, respectively.

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Overview

        On July 29, 2002, RS Acquisition Holding, LLC, a Delaware limited liability company and a wholly owned subsidiary of SIRVA, acquired 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 $14.0 million. The purchase price was funded from the proceeds of a bank loan. Under the terms of the purchase agreement between RS Acquisition Holding, LLC and us, we agreed to acquire Rowan Simmons, excluding the homes inventory and associated mortgage liabilities, from RS Acquisition Holding, LLC no later than April 29, 2003 for approximately $14.0 million. 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.

        On May 3, 2002, SIRVA, through two wholly owned subsidiaries, purchased CRS, the business conducted by Cooperative Resource Services, Ltd. that provides comprehensive relocation services to companies and their employees, including home sale services, relocation coordination services and mortgage lending services. One of these two subsidiaries, SIRVA Relocation, which we own directly, purchased the non-mortgage lending operations net assets and equity from CRS. The mortgage lending operations of the seller were purchased by the other subsidiary, CMS Holding LLC ("CMS Holding"), which is owned directly by SIRVA. The mortgage lending operations share common customers with the other operations of SIRVA Relocation. Subject to certain adjustments, the combined cash purchase price for the acquisitions was approximately $60.0 million, of which $3.5 million was paid for the assets of the mortgage lending operations. Approximately $45.0 million of the purchase price was paid in cash and $15.0 million (non-cash) was paid in notes issued by us. In addition, certain liabilities relating to the acquired business were assumed in connection with the acquisition, including $26.6 million of indebtedness under a revolving credit facility used to fund the mortgage lending operations, which was 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 retired as part of the acquisition, were financed with proceeds of $36.5 million of cash contributions from SIRVA. SIRVA obtained those proceeds from the sale of its common stock to Fund VI, an affiliate of Fund V, the controlling shareholder of SIRVA, and the incurrence of $50.0 million of additional senior indebtedness. 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 $53.1 million, customer relationships of $28.7 million and covenants not to compete of $6.1 million.

        On April 12, 2002, we purchased NAIT, the business conducted by the National Association of Independent Truckers, a leading provider of insurance services to independent contract truck drivers, for approximately $25.4 million in cash, $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 an actuarially determined amount of $7.4 million 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 13,800 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 existing cash and investment balances and $20.0 million 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 $16.8 million, trade names of $12.3 million, member relationships of $6.1 million and a covenant not to compete of $5.8 million.

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        On December 31, 2001, we completed a stock-for-stock merger with Moveline, Inc. ("Moveline"), a Delaware corporation, a majority of the outstanding capital stock of which was owned by Fund V, under an agreement and plan of merger dated as of November 9, 2001, pursuant to which Moveline merged with one of our wholly-owned subsidiaries, with such subsidiary as the surviving corporation. Under the terms of the merger agreement, Moveline's stockholders received a fraction of a share of the common stock of our parent, SIRVA, for each Moveline share acquired in the merger. Immediately following the merger, we contributed the surviving subsidiary to Allied Van Lines, Inc., a Delaware corporation and another of our wholly owned subsidiaries. Allied Van Lines subsequently merged with that subsidiary with Allied Van Lines as the surviving corporation. In connection with the stock-for-stock merger, Fund V acquired 1,760,570 additional shares of SIRVA. Prior to the merger, Moveline had developed and marketed a proprietary information technology-based customer care solution that builds upon the moving industry's historical van line business model. Our consolidated financial statements were restated to include the combined results of operations, financial position and cash flows of Moveline since its inception, as though it had always been a part of us.

        Due to these acquisitions, we have realigned certain businesses within our segment structure and created two additional segments. Our operating revenues are derived from the following five business segments: (1) our moving services—North America segment, (2) our moving services—Europe and Asia Pacific segment, (3) our relocation services segment, (4) our insurance services segment, and (5) our logistics services segment. Segments (1) through (3) comprise global relocation services.

        Our moving services—North America segment operates under the northAmerican, Allied and Global brand names and provides two types of moving services: (1) domestic, which provides residential moving services in the United States and Canada through a network of exclusive agents who provide the sales, packing, loading, transportation, delivery and warehousing services and (2) international, which primarily markets to multi-national companies most often based in the United States and provides or coordinates moving services for 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 offering.

        Our moving services—Europe and Asia Pacific segment operates in the United Kingdom, Europe, Australia and Asia Pacific through a network of company-owned branches that utilize the Pickfords or Allied Pickfords brand names among others. This segment provides complete domestic and international residential moving services, including sales, packing, loading, transportation, delivery and warehousing. It also provides records management and office and industrial relocation services.

        Our relocation services segment is comprised of SIRVA Relocation and its wholly owned subsidiaries, which operate as global providers of domestic and international relocation services to corporate clients and their employees, including home sale services, relocation coordination services, expense management and transaction reporting.

        Our 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 us 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.

        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

15

operations, which handle logistics solutions and specialized transportation of high-value products to and from major cities in the United Kingdom and Europe.

Business Trends and Initiatives

        In 2002, we established the strategic objective of dramatically expanding our presence in the corporate relocation market. As a result, we acquired CRS, 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 will be supplemented by the opening in Hong Kong of an Asia relocation center in early 2003. Our parent, SIRVA, also acquired CMS Holding, the mortgage lending arm of the CRS group, adding mortgage services to our relocation offering, and also acquired, in July of 2002, Rowan Simmons in the U.K., the largest local provider of relocation services in that market. 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.

        Our moving services group continues to expand through acquisitions. After completing the Allied Acquisition 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, and acquired in 2002 Prime International in Australia, Total Recall in the U.K. and Maison Huet in France.

        Our insurance 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 NAIT, which focuses on servicing the substantial community of owner/operator drivers with insurance and other professional and support services.

        We have been successful at smoothly integrating these acquisitions and will continue to pursue additional transactions around the world that we believe would further strengthen our global presence or would advance our strategic position in the markets that we serve.

        We have also pursued a number of long-term initiatives designed to improve productivity and profitability. We have invested significant amounts in information technology solutions in order to enhance operational and administrative efficiencies. We have also initiated several restructuring projects over the last few years to streamline management structures, integrate acquired businesses, reshape service delivery operations, reduce general and administrative headcount and exit under-performing business units. We feel that these efforts have been instrumental in reducing our costs and positioning us well for continued profitable growth, although no assurance can be given in this regard.

Critical Accounting Policies

        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 expenses and other such costs associated with the service delivery. The estimate for PTE is not adjusted until we receive actual charges, which are typically within 30 days of the estimate.

        In the Relocation Services segment, fees are paid to us by corporate customers at either a fixed price per transferred employee or based upon a fixed percentage of the home's selling price. In either case, revenue is recognized when a home sale contract with the ultimate buyer is signed. However, if we purchase a property from the transferee when no outside buyer has been located and the property enters our inventory, revenue is not recognized on that property until the closing of a sale to an outside buyer.

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Additionally, fees are paid to us by company-qualified real estate agents for the listing or home purchase referral of a transferred employee.

        Insurance reserves:    We have first dollar coverage for principally all insurable business risks except cargo damage claims and delay claims. 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.

        Claims reserves:    We estimate costs relating to cargo damage and delay claims based primarily on actuarial methods applied to historical trends. For the year ended December 31, 2002, our cargo loss and damage expense was $13.4 million lower than for the year ended December 31, 2001, due to favorable development of claim frequency and severity trends. There can be no assurance that this favorable trend will continue for the year ended December 31, 2003.

        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 postemployment 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) homes inventory, net of allowance for loss upon sale is estimated based on historical write-off data and current facts and circumstances; (e) costs relating to cargo damage and delay claims are estimated based on actuarial methods; (f) an impairment loss is recognized if the carrying amount of a long-lived asset is not recoverable from its undiscounted cash flows and is measured as the difference between the carrying amount and fair value of the asset; and (g) insurance loss reserves are estimated utilizing third party actuaries.

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Results of Operations

        Our operating revenues are derived from our moving services—North America, moving services—Europe and Asia Pacific, relocation services, insurance 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 America's transportation expenses are comprised of payments to:

•

owner/operators or agents based on a predetermined rate schedule to provide equipment and haul shipments;



•

owner/operators or agent crews for services such as packing, crating, loading and unloading;



•

agents for booking (sales activity), estimating and customer service; and



•

other third parties such as ocean freight carriers for other transportation services.

        Moving services—Europe and Asia Pacific's transportation expenses are similar to those of moving services—North America, except that expenses incurred to provide moving and storage services are largely in the form of direct labor and equipment expenses rather than in the form of agent or owner/operator expenses.

        Relocation services direct expenses are primarily comprised of commissions paid to realtors, home closing costs and staff expenses associated with providing relocation coordination services.

        Insurance services direct expenses are primarily comprised of underwriting policies, payments of loss recovery to policy holders and loss adjustment expense.

        Logistics services transportation expenses are comprised of:

•

payments to owner/operators, employee or agent drivers on a predetermined rate schedule to provide equipment and haul shipments;



•

payments to owner/operators, employee or agent crews for services such as pick-up, delivery and installation;



•

facility and equipment costs, including lease expense and labor costs associated with running the transportation network and our equipment;



•

payments to agents for booking (sales activity) and customer service; and



•

sub-contracted transportation expenses in providing supply chain management services.

        Operating expenses include our insurance and claims, bad debt and general and administrative expenses. Employee compensation and benefits account for over 50% of general and administrative expenses. Other significant components of general and administrative expenses are communication costs, rent, supplies and other purchased services.

        Our financial statements reflect operations since our acquisition by Fund V on March 29, 1998 through December 26, 1998 and for the years ended December 25, 1999 and December 31, 2000, 2001 and 2002. After our acquisition by Fund V, in accordance with Emerging Issues Task Force 91-9, "Revenue and Expense Recognition for Freight Services in Process", we changed our accounting basis and recognize estimated revenue and direct costs when shipments are delivered. Our predecessor company recognized estimated revenue and direct costs when shipments were loaded. Management believes the impact of this difference on reported operating revenues and income from operations is not material.

        The results of operations for the period December 28, 1997 through March 28, 1998 represents the historical results of operations of our predecessor under the ownership of Norfolk Southern Corporation prior to the closing of the 1998 Acquisition. Solely to facilitate comparison and assessment of the trends in

18

the results of operations, the following presentation of results of operations for the year ended December 26, 1998 was obtained by combining the historical results of operations of our predecessor for the period from December 28, 1997 through March 28, 1998 with our results of operations for the period from March 29, 1998 through December 26, 1998 (the "1998 Period") adjusted for the effects of purchase accounting as if the transaction had occurred as of December 28, 1997.

        Prior to the Allied Acquisition, we had operated on a fiscal calendar ending on the Saturday nearest to December 31 of each year. To coordinate our accounting calendar with Allied's following the Allied Acquisition, we recorded the operations of North American Van Lines and its non-Allied subsidiaries for the last week of December 1999 as January 2000 business. This has resulted in an additional week (the "2000 Additional Week") in the year ended December 31, 2000, as compared to the year ended December 31, 2001.

        Our financial and operating data for the periods ending after November 19, 1999 include financial and operating data of Allied.

        The following table sets forth the percentage relationship of certain items to our operating revenues for the periods indicated:

19

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

        The following table sets forth certain figures regarding our results of operations for the year ended December 31, 2002, compared to the year ended December 31, 2001.

(a)

Percentages are reflected except when greater than 100%, in which case an "f" for favorable is shown.

        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 in the United Kingdom and Australia), primarily generates revenues from 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.

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        Operating Revenues.    Operating revenues for the year ended December 31, 2002 were $2,177.2 million, a decrease of $72.1 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 year ended December 31, 2002 decreased $140.6 million or 11% as compared to the year ended December 31, 2001 due primarily to the continuation of the general economic slowdown. Shipments were lower by approximately 10%, 7% and 14% 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 the mix of customers served.

        Revenue in moving services—Europe and Asia Pacific increased $20.2 million in the year ended December 31, 2002 as compared to the year ended December 31, 2001. This was primarily due to a favorable currency impact of $18.0 million and 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 year ended December 31, 2002 as compared to the year ended December 31, 2001. This was partially offset by softness in industrial moving in the United Kingdom. For the year ended December 31, 2002, the Pound Sterling, the Australian dollar and the Euro were stronger as compared to the year ended December 31, 2001 by approximately 4%, 5% and 5%, respectively, when translated into the weaker U.S. dollar.

        Revenue in relocation services for the year ended December 31, 2002 was $67.8 million higher as compared to the year ended December 31, 2001. The increase was due to the CRS acquisition.

        Revenue in insurance services for the year ended December 31, 2002 was $33.3 million higher as compared to the year ended December 31, 2001. The increase was due to the NAIT acquisition, a general increase in rates and additional market penetration.

        Revenue in logistics services decreased $52.8 million in the year ended December 31, 2002 as compared to the year ended December 31, 2001 due 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. Revenues were also $14.5 million lower than in the year ending December 31, 2001 because 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 year ended December 31, 2002 was $459.3 million, an increase of $22.4 million compared to the year ended December 31, 2001. The gross margin (as a percentage of sales) was 21.1% for the year ended December 31, 2002 and was 19.4% for the year ended December 31, 2001. The increase was primarily due to $33.9 million from acquisitions and, to a lesser extent, customer mix and operating and service delivery efficiencies, partially offset by the margin effect of the volume shortfall.

        Operating Expenses.    Operating expenses for the year ended December 31, 2002 were $364.9 million, a decrease of $13.8 million compared to the year ended December 31, 2001. Cargo loss and damage expenses were $13.4 million lower than in the same period in the prior year due to favorable development of claim frequency and severity trends. We are continuing cost containment programs such as delayering the organization and generally reducing discretionary expenses. 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 $10.9 million. Partially offsetting the above were $19.7 million of higher general and administrative expenses due to incremental expenses of our acquisitions. As a percentage of revenue, operating expenses were 16.8% for the year ended December 31, 2002, which approximated the ratio for the year ended December 31, 2001.

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        Restructuring and other unusual items.    In the year ended December 31, 2002, we incurred $0.4 million of restructuring and other unusual items, comprised of $7.1 million of software impairment charges due to a reduction in the number of software modules implemented as a result of a change in business strategy in logistics services and $4.6 million of expenses related to the December 2002 SIRVA headquarters building move. These amounts were partially offset by $7.4 million of pension and retiree medical curtailment gain due to the freezing of the U.S. pension plan and the reduction of retiree medical benefits, $3.0 million of gain from the sale of our U.K. industrial moving business and a $0.9 million restructuring credit pertaining to the logistics parts centers due to our entering into subleases of certain parts centers facilities earlier than originally estimated. In the year ended December 31, 2001, we incurred $4.9 million of expense, due primarily to the logistics parts center restructuring.

        Income (Loss) from Operations.    Income from operations for the year ended December 31, 2002 was $94.0 million, compared to $53.3 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 year ended December 31, 2002 as compared to the year ended December 31, 2001 increased $22.3 million primarily due to $12.3 million of lower cargo loss and damage expense, $20.1 million of reduced general and administrative expenses and the elimination of goodwill amortization, which was $4.8 million for the year ended December 31, 2001. Income from operations in moving services—North American for the year ended December 31, 2002 was also higher than for the year ended December 31, 2001 due to the expenses associated with the January 2001 agent convention and $2.6 million of pension and retiree medical curtailment gain. These favorable variances were partially offset by $13.9 million of lower Allied and northAmerican lines margins as a result of the volume decrease and $3.5 million of expenses related to the December 2002 SIRVA headquarters move.

        Income from operations in moving services—Europe and Asia Pacific increased $0.2 million for the year ended December 31, 2002 as compared to the year ended December 31, 2001. This was primarily due to higher gross margin due to revenue mix and the elimination of goodwill amortization, which was $4.5 million for the year ended December 31, 2001. On December 28, 2002, we sold our U.K. industrial moving business, resulting in a gain of $3.0 million. These favorable variances were partially offset by an increase in general and administrative expenses, due primarily to $2.6 million of severance costs and $1.8 million of increased customer claims and a year-over-year decrease of $0.7 million relating to gains on outstanding foreign currency exchange contracts.

        Income from operations in relocation services for the year ended December 31, 2002 as compared to the year ended December 31, 2001 increased $9.3 million primarily due to the CRS acquisition.

        Income from operations in insurance services for the year ended December 31, 2002 as compared to the year ended December 31, 2001 increased $7.8 million primarily due to higher margins due to increased revenue, the NAIT acquisition and a year-over-year derivative gain of $0.7 million.

        Loss from operations in logistics services for the year ended December 31, 2002 was $2.1 million, an improvement of $1.1 million compared to the year ended December 31, 2001 due to lower general and administrative expenses, the elimination of $1.6 million of goodwill amortization and $4.5 million of pension and retiree medical curtailment gain. In the year ended December 31, 2001, losses related to the parts centers business, which we exited at the end of 2001, were $6.6 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 and $7.1 million of software impairment charges.

        Interest Expense.    Interest expenses for the year ended December 31, 2002 were $52.2 million compared to $62.0 million in the year ended December 31, 2001. This decrease is due primarily to lower interest rates and lower average borrowings.

        Provision for Income Taxes.    For the year ended December 31, 2002, income tax expense was $14.1 million based on pre-tax income of $41.2 million. For the year ended December 31, 2001, the income

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tax provision was $1.9 million based on a pre-tax loss of $8.8 million. Our estimated provision for income taxes differs from the amount computed by applying the federal and state statutory rates. The income tax rate difference for the year ended December 31, 2002 was improved over the statutory rate for the year ended December 31, 2001 primarily due to the elimination of goodwill amortization expense. For the year ended December 31, 2001, this difference is primarily due to (1) the non-deductibility of certain items, primarily goodwill amortization, expensed for book purposes and (2) limitations that exist on the availability of certain foreign income tax credits. These items created taxable income that is greater than income reported for financial statement purposes for the year ended December 31, 2001.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

        The following table sets forth certain figures regarding our results of operations for the year ended December 31, 2001, compared to the year ended December 31, 2000.

(a)

Percentages are reflected except when greater or less than 100%, in which case an "f" for favorable or "u" for unfavorable is shown.

        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 in the United Kingdom and Australia), primarily generates revenues from 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.

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        Operating Revenues.    Operating revenues for the year ended December 31, 2001 were $2,249.3 million, a decrease of $129.4 million compared to the same period in 2000 primarily as a result of the factors discussed below.

        Revenue in moving services—North America for the year ended December 31, 2001 decreased $75.5 million as compared to the year ended December 31, 2000 due primarily to the general economic slowdown which resulted in lower shipment activity in the Allied and northAmerican lines and the international unit. These shortfalls were partially offset by increased revenue per shipment in the Allied and northAmerican lines. The percentage of revenue decrease in the Allied and northAmerican lines was lower than the percentage decrease in shipments due to the mix of customers served and higher revenue per shipment.

        Revenue in moving services—Europe and Asia Pacific increased $7.0 million in the year ended December 31, 2001 as compared to the year ended December 31, 2000. This was primarily due to underlying growth on a local currency basis in records management, increased volume in the residential moving business in the United Kingdom and industrial moving business improvement year-over-year. The Australia unit of Asia Pacific also showed improvement due primarily to an increase in international moving. New Zealand increased its revenue due to an acquisition made in late 2000. This was partially offset by an unfavorable currency impact of $19.8 million. For the year ended December 31, 2001, the Pound Sterling, the Australian dollar and the Euro were weaker as compared to the year ended December 31, 2000 by approximately 5%, 11% and 3%, respectively, when translated into the relatively stronger U.S. Dollar.

        Revenue in relocation services for the year ended December 31, 2001 increased to $2.0 million from $1.8 million for the year ended December 31, 2000.

        Revenue in insurance services for the year ended December 31, 2001 increased to $48.3 million from $43.9 million in the year ended December 31, 2000. The increase was due to additional product offerings and an expanded customer base.

        Revenue in logistics services decreased $65.5 million in the year ended December 31, 2001 as compared to the year ended December 31, 2000 due primarily to the elimination of $14.1 million of revenue associated with the home delivery business, reduced activity levels totaling $15.6 million of revenue in the parts center business which reflects the loss of a major customer (we exited the parts center business at the end of 2001), lower volume in specialized transportation, principally due to the general economic slowdown and a $12.5 million decrease in special product division revenue due to loss of the special products division's largest agent in late 2000. The agent terminated its relationship with us in order to serve another van line, due to contract pricing differences. The special products division primarily hauls specialty products such as medical and fitness equipment and tradeshow-related items. These decreases were partially offset by higher solutions volume due to the addition of new customers and the addition of new business in the European operations.

        Gross Margin.    Gross margin for the year ended December 31, 2001 was $436.9 million, a decrease of $9.7 million compared to the year ended December 31, 2000. The decrease was due primarily to a

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shipment volume decline due to the general economic slowdown. The gross margin (as a percentage of sales) was 19.4% for the year ended December 31, 2001 and was 18.8% for the year ended December 31, 2000. This increase was due primarily to customer mix and operating and service delivery efficiencies.

        Operating Expenses.    Operating expenses for the year ended December 31, 2001 were $378.7 million, a decrease of $13.2 million compared to the year ended December 31, 2000. The decrease is due to reduced shipment volume, which resulted in reduced cargo and related claims expense. As a percentage of revenue, operating expenses were 16.8% for the year ended December 31, 2001, compared to 16.5% for the year ended December 31, 2000. The increase was due primarily to incremental systems expenses aimed at enhancing applications in our logistics services segment.

        Restructuring.    In the year ended December 31, 2001, we incurred $4.9 million of restructuring expense, of which $4.3 million relates to the exiting of the logistics services parts center business and headcount reductions and $0.6 million relates to the Branch System. In the year ended December 31, 2000, we incurred $2.7 million of costs relating to the Branch System and $2.2 million of restructuring charges in connection with our Fast Forward program.

        Income (Loss) from Operations.    Income from operations for the year ended December 31, 2001 was $53.3 million, compared to $49.8 million for the same period in 2000 as a result of the factors discussed below.

        Income from operations in moving services—North America for the year ended December 31, 2001 as compared to the year ended December 31, 2000 increased $7.5 million primarily due to lower cargo claims-related expense and reduced bad debt and depreciation expense. General and administrative expenses were also lower than in the same period in 2000. These favorable variances were partially offset by lower Allied and northAmerican lines margins as a result of the general economic slowdown, the expenses associated with the January 2001 agent convention and the margin effect of the 2000 Additional Week in the northAmerican line.

        Income from operations for moving services—Europe and Asia Pacific increased $2.6 million in the year ended December 31, 2001 as compared to the year ended December 31, 2000. Margins were higher, with improvement in Australia and New Zealand offset by lower margins in the residential moving business in the United Kingdom. Depreciation expense was lower and there was additional restructuring expense that occurred in 2000. The 2001 favorable variance in income from operations was partially offset by an unfavorable currency impact of $1.2 million and lower year-over-year gains relating to outstanding foreign currency exchange contracts.

        Relocation services loss from operations for the year ended December 31, 2001 was $0.9 million, while for the year ended December 31, 2000, income from operations was $0.6 million. The decrease was primarily due to additional general and administrative expenses for the year ended December 31, 2001.

        Insurance services income from operations for the year ended December 31, 2001 increased to $15.8 million from $15.1 million for the year ended December 31, 2000. The increase was a result of higher margins due to additional product offerings and an expanded customer base.

        Loss from operations in logistics services for the year ended December 31, 2001 was $3.2 million, a decrease of $5.8 million compared to the year ended December 31, 2000 due to lower margins in specialized transportation and in the parts centers partially offset by improved margins in programs. Also contributing to the unfavorable performance was $3.3 million of additional restructuring expense year-over-year consisting of severance and employee benefit costs, lease and asset impairment costs related to the exiting of the parts center business and incremental systems expenses aimed at enhancing solutions applications, partially offset by reduced depreciation expense. The margin effect of the 2000 Additional Week also contributed to the unfavorable variance.

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        Interest Expense.    Interest expense for the year ended December 31, 2001 was $62.0 million compared to $67.3 million in the year ended December 31, 2000. This decrease was due primarily to lower interest rates. The decrease in interest expense was partially offset by $3.3 million of interest paid on the Allied Acquisition purchase price adjustment.

        Income Tax Provision (Benefit).    For the year ended December 31, 2001, the income tax provision was $1.9 million based on a pre-tax loss of $8.8 million. For the year ended December 31, 2000, the income tax benefit was less than $0.1 million based on a pre-tax loss of $17.1 million. Our estimated provision for income taxes differs from the amount computed by applying the federal and state statutory rates. This difference was primarily due to (1) the non-deductibility of amortization expense associated with certain intangible assets 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.

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.

        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 approximate $53.0 million in 2003 due to an increased average debt level, partially offset by lower interest rates;



•

principal repayments of debt and capital leases, which will 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;



•

operating lease payments, which were $58.9 million in 2002 and will 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 will total $22.0 million in 2003, $20.0 million in 2004, $19.3 million in 2005, $19.2 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 $40.0 million in 2003; 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. Our senior credit facility is comprised of note payable—Tranche A, note payable—Tranche B and a revolving credit facility. As of December 31,

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2002, we had $543.6 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;



•

$329.9 million outstanding under our term loans (consisting of a note payable—tranche A and a note payable—tranche B amounting to $120.0 million and $209.9 million, respectively);



•

$27.0 million outstanding under our $150.0 million revolving credit facility;



•

$19.0 million of capital leases; and



•

$17.7 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.

        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 December 31, 2002 had accreted to $56.6 million, limit our ability to incur additional indebtedness. Such restrictions could limit our ability to

•

respond to certain market conditions;



•

meet 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 contain a number of similar restrictions.

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        Cash Flows from Operating Sources.    We believe that cash generated from 2003 operations, which was $84.0 million for the year ended December 31, 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.

        Cash Flows from Investing Sources.    Capital expenditures for 2003 are expected to range between $30.0 million and $40.0 million for computer equipment, software development and transportation and warehouse equipment. 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 Sources.    Our future operating performance and ability to service or refinance the notes and to repay, extend or refinance our senior credit facility will be subject to, among other things, future economic conditions and to financial, business and other factors, many of which are beyond our control.

        During 2002, our Tranche debt was reduced by $21.9 million as the result of a required excess cash flow payment. Our credit agreement requires us to use 50% of the prior year's excess cash flow, as defined in the credit agreement governing our senior credit facility, as a permanent prepayment of Tranche debt. Funds were borrowed from the revolving credit facility to repay the Tranche debt. Of the amount paid, $4.2 million replaced principal payments due at that time, with the remaining $17.7 million reducing future principal payment. The primary driver of the 2001 excess cash flow was the significant reduction in our working capital. Accounts receivable days sales outstanding fell from 62 days at the end of 2000 to 49 days at the end of 2001. For the year ended December 31, 2002, we had no excess cash flow payment required.

        In connection with the purchase of the relocation services business of CRS on May 3, 2002, we borrowed an additional $50.0 million under the note payable—Tranche B facility. See "—Overview."

        The following table provides a summary, as of December 31, 2002, of our contractual obligations related to long-term debt, leases and other commercial commitments:

        We guarantee certain operating lines of credit maintained by wholly owned foreign subsidiaries. As of December 31, 2002 and December 31, 2001, the outstanding balance was $1.1 million and $1.2 million, respectively.

Commitments and Contingencies

        On July 1, 2002, we entered into a ten-year purchase commitment with Covansys Corporation and Affiliated Computer Services, Inc. to provide selected outsourcing services for our domestic information systems infrastructure, including data center operations and telecommunications and certain application software development. Covansys Corporation is a related party, as approximately 24% of its outstanding common stock is owned by Fund VI. As of December 31, 2002, the remaining purchase commitment was $176.4 million.

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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 of $15.2 million was rendered in 2002 and was fully paid by us and two of our insurers. After these insurance payments and reimbursements, we have paid $7.6 million which we believe is fully reimbursable by insurance. TIG Insurance Co. ("TIG"), one of our several co-insurers, filed suit against us, one of our subsidiaries and several other parties in the 191^st Judicial District court of Dallas County, Texas, on September 12, 2002, contesting TIG's and other insurers' coverage obligations and seeking declaratory judgment. NAVL filed a counterclaim and cross-claim against TIG and National Union Fire Insurance Company, seeking reimbursement for all remaining amounts that we paid in satisfaction of the judgment and associated costs and expenses. If TIG prevails, there is the possibility that some or all of the unreimbursed portion of the payment we made may not be reimbursed. We have a reserve that we consider appropriate in the circumstances.

Off Balance Sheet Arrangements

        During 2002, we sold a portion of our equipment notes receivable portfolio to an unaffiliated third party. The transaction, which qualified as a sale under Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" resulted in cash proceeds of $1.2 million, which approximated the fair value of notes receivable sold. The equipment notes receivable are due from agents or owner-operators for trailers, tractors and straight trucks and are collateralized by those assets. Each note is generally for a term of five years, bearing interest at either a fixed or variable rate of prime plus 1.0%—3.0%. Principal and interest are payable monthly over the term of the agreement. Under the terms of the sales agreement, we are responsible for servicing, administering, and collecting these notes receivable on behalf of the unaffiliated third party. Servicing fees under the sales agreement are deemed adequate compensation to us for performing the servicing, accordingly no servicing asset or liability has been recognized in the accompanying financial statements. Under the terms of the transaction, the maximum recourse exposure to us was $0.4 million.

Related Party Transactions

        We are parties to a consulting agreement with Clayton, Dubilier & Rice, Inc. whereby Clayton, Dubilier & Rice, Inc. receives a management fee for financial advisory and management consulting services. For the years ended December 31, 2002, 2001 and 2000, such fees were $1.375 million, $1.375 million, and $0.4 million, respectively.

        We have guaranteed loans made by a third-party lender in aggregate principal amounts of $0.8 million and $0.021 million as of December 31, 2002 and 2001, respectively, to various members of management, including certain of our executive officers, in connection with their investment in SIRVA. We would become liable for such amounts in the event that a member of management would fail to repay the principal and interest, when due. These loans mature in May 2004 and bear interest at the prime rate plus 1.0%. All loans to members of management were made prior to passage of the Sarbanes-Oxley Act. Subsequent to its passage, we adopted a policy prohibiting us from making loans to or guaranteeing loans of executive officers.

        See "Certain Relationships and Related Party Transactions."

Foreign Currency Translation

        The future magnitude and direction of foreign currency translation adjustments depends on the relationship of the U.S. Dollar to other foreign currencies. The effects of foreign currency fluctuations in our foreign operations are somewhat mitigated by the fact that the majority of expenses are incurred in the same currency in which corresponding revenues are generated.

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        Operating revenues from operations outside of the United States during 2002 amounted to $459.3 million, or 21.1% of our operating revenues. At December 31, 2002, approximately 35.8% of our total long-lived assets were denominated in currencies other than the U.S. Dollar. The functional currency for our international subsidiaries is the local currency for the country in which the subsidiaries own their primary assets. We have operations in several foreign countries including those that use the Canadian dollar, the British pound sterling, the Australian dollar or the Euro as their functional currencies.

        The translation of the applicable currencies into U.S. Dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. The effect of U.S. Dollar currency exchange rates in Canada, the United Kingdom, Europe, Australia and other countries in which we operate produced a net currency translation adjustment gain of $6.7 million, net of tax, which was recorded as an adjustment to stockholders' equity as an element of other comprehensive income, for the year ended December 31, 2002.

Inflation

        We believe that inflation generally does not have a material effect on the results of our operations.

Retirement Plans

        The domestic defined pension plans were amended effective April 1, 2002 for the purpose of combining the plans into one benefit plan covering all domestic employees. This single pension plan was then frozen effective December 31, 2002, which triggered curtailment accounting treatment due to the elimination of benefits earned for future years of service. The curtailment amounts were recorded in the results of operations as an unusual item for the year ended December 31, 2002.

        The postretirement medical plan covering certain domestic employees was amended effective April 1, 2002 to include substantially all of our domestic employees. The amendment also eliminated after age 65 benefits previously associated with this plan. Effective December 31, 2002, the plan was amended to eliminate any subsidies to employees that have not reached 50 years of age with a minimum of ten years of service as of December 31, 2002. This amendment triggered curtailment accounting treatment. The curtailment amounts were recorded in the results of operations as an unusual item for the year ended December 31, 2002.

        The total amount of pension and retiree curtailment gain for the year ended December 31, 2002 was $7.4 million.

        Retirement plan expenses and obligations are dependent on assumptions used in calculating such amounts. These assumptions include discount rate, rate of compensation increases and expected return on plan assets. In accordance with U.S. GAAP, actual results that differ from the assumption are accumulated and amortized over future periods. While we believe that assumptions used are appropriate, differences in actual experience or changes in assumptions may affect our retirement plan obligations and future expense. In 2002, we maintained the expected return on plan assets at 9.0%. In developing our expected long-term rate of return assumption, we evaluated input from our independent financial advisor, including their review of our pension asset class ten-year weighted average returns for each of the last ten years. The average ten-year return by year is 12.3%. We anticipate that our investment managers will generate long-term returns of at least 9.0%. A reduction in the expected return on plan assets from 9.0% to 8.5% would increase pension expense by approximately $0.3 million. The discount rate range was lowered to 6.75% from 7.25%. The discount rate we utilize for determining pension obligations is based on a review of AA+ long-term bonds held based on actuarial indices. A reduction in the discount rate from 6.75% to 6.50% would increase pension expense by approximately $0.3 million. Pension expense in 2003 is expected to increase by approximately $0.5 million primarily due to amortization of differences between actual and expected returns on plan assets. During 2002, we recorded a minimum pension liability adjustment of

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$18.3 million, net of tax, to accumulated other comprehensive income (loss). If the equity markets continue recent trends, we could be required to record a charge to accumulated other comprehensive income (loss).

Seasonality

        Our operations are subject to seasonal trends common to the moving 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 services—North America, over half of its revenue is typically generated from May through September. For logistics services, shipping requirements of the customer base result in higher shipment volumes at the end of each quarter. Moving services—Europe and Asia Pacific experiences seasonality with respect to residential moves; however, this is somewhat diminished by the geographic diversity of our moving activities and involvement with other non-seasonal business services such as records management and office moving.

Recent Accounting Pronouncements

        In August 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), superseding SFAS 121, effective for fiscal years beginning after December 15, 2001. The provisions of SFAS 144 are for long-lived assets to be disposed of by the sale or otherwise are effective for disposal activities initiated by an entity's commitment to a plan after the initial date of adoption of SFAS 144. We adopted SFAS 144 on January 1, 2002.

        In April 2002, the FASB issued Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections" ("SFAS 145"). The statement updates, clarifies and simplifies existing accounting pronouncements. The provisions of SFAS 145 related to rescission of Statement 4 shall be applied in fiscal years beginning after May 15, 2002. The provisions in paragraphs 8 and 9(c) of the statement related to Statement 13 shall be effective for transactions occurring after May 15, 2002. The adoption of SFAS 145 did not have a material effect on our operating results or financial condition.

        In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146"). The statement requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. This statement replaces previous accounting guidance provided by EITF (Emerging Issues Task Force) Issue No. 94-3. SFAS 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002.

        In November 2002, the FASB issued Statement of Financial Accounting Standards Interpretation No. 45, "Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45"). The interpretation clarifies the requirements relating to a guarantor's accounting for, and disclosure of, the issuance of certain types of guarantees. The provisions for initial recognition and measurement of FIN 45 are to be applied on a prospective basis to guarantees issued on or modified after December 31, 2002. We will consider the recognition and measurement provisions of FIN 45 and its effect on the financial statements. The disclosure requirements are effective for fiscal years ending after December 15, 2002. Our guarantees are as follows:

        We have guaranteed certain of our wholly owned foreign subsidiaries' operating lines of credit.

        Interest rate swap agreements and foreign exchange instruments with banks that are associated with our senior credit facility are borrower obligations under our senior credit facility, hence such agreements and instruments are secured and guaranteed.

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        We have guaranteed loans made by a third-party lender in aggregate principal amounts of $0.8 million and $0.021 million as of December 31, 2002 and 2001, respectively, to various members of management, including certain of our executive officers, in connection with their investment in SIRVA. We would become liable for such amounts in the event that a member of management would fail to repay the principal and interest, when due. These loans mature in May 2004 and bear interest at the prime rate plus 1.0%. All loans to members of management were made prior to passage of the Sarbanes-Oxley Act. Subsequent to its passage, we adopted a policy prohibiting us from making loans to or guaranteeing loans of executive officers.

        Our subsidiary entities have guaranteed our senior subordinated notes issued in conjunction with the Allied Acquisition.

        In December 2002, the 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 fair 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 effect of the method used on reported results. We adopted only the disclosure requirements of SFAS 148.

        In January 2003, the FASB issued Statement of Financial Accounting Standards Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"). FIN 46 addresses consolidation by business enterprises of variable interest entities. As of December 31, 2002, we had no variable interest entities.

Restructuring and Other Unusual Items

        In the year ended December 31, 2002, we incurred $0.4 million of restructuring and other unusual items, comprised of $7.1 million impairment charge due to a reduction in the number of software modules implemented as a result of a change in business strategy in logistics services and $4.6 million of expenses related to the December 2002 SIRVA headquarters move. These items were partially offset by $7.4 million of pension and retiree medical curtailment gain as the pension plan was frozen and retiree medical benefits were reduced, $3.0 million of gain from the sale of our U.K. industrial moving business and $0.9 million of restructuring credit pertaining to the logistics services' parts centers as we were able to sublease certain parts centers facilities earlier than originally estimated.

        In the year ended December 31, 2001, we incurred $4.9 million of restructuring charges, of which $4.3 million related to exiting the logistics services' parts center business and associated headcount reductions and $0.6 million related to our moving services—Europe and Asia Pacific segment's U.K. branch network and the elimination of management redundancy within the industrial moving unit.

Forward Looking Statements

        This Form 10-K 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:

•

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;

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•

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 insurance 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 assume no obligation to update these forward-looking statements or advise of changes in the assumptions on which they were based.

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ITEM 7A.    QUANTITATIVE AND QUALITATIVE 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 $1.6 million in 2003. An increase of 1% in interest rates payable on our variable rate indebtedness would increase our annual interest rate expense by approximately $2.1 million in the next year.

        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, we do not anticipate nonperformance by the other parties, and no material loss would be expected from their nonperformance.

        We had two open interest rate swap agreements as of December 31, 2002. The intent of these agreements is to reduce interest rate risk by swapping an unknown variable interest rate for a fixed rate. These agreements qualify for hedge accounting treatment, therefore, market rate changes are reported in accumulated other comprehensive income. The following is a recap of each agreement.

        We entered into four additional interest rate swap agreements on January 3, 2003. The following is a recap of each agreement.

        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 year ended December 31, 2002 and 2001, we recognized a currency loss of $0.2 million and a gain of $0.5 million, 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 (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 December 31, 2002 and 2001 were $3.4 million and $3.5 million, respectively. A hypothetical 10% adverse movement in foreign exchange rates applied to our foreign currency exchange rate sensitive instruments held as of December 31, 2002 would

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result in a hypothetical loss of approximately $0.34 million. These derivatives do not qualify for hedge accounting treatment, therefore, changes in fair value relating to these derivatives are recognized in current period earnings. For the year ended December 31, 2002 and 2001 we recognized a loss of $0.1 million and a gain of $0.4 million, respectively, resulting from changes in the fair value of foreign currency derivatives.

        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 year ended December 31, 2002 and 2001, we recognized $0.7 million and $0.01 million of gains, respectively. The insurance investment portfolio also included marketable equity securities which are classified as available-for-sale and are recorded at fair value. Unrealized holding gains and losses, 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.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The following financial statements and schedules of North American Van Lines are included in this report:

I.

Report of Independent Accountants



II.

Consolidated Balance Sheets at December 31, 2002 and 2001



III.

Consolidated Statements of Operations for the years ended December 31, 2002, 2001 and 2000



IV.

Consolidated Statements of Changes in Stockholder's Equity for the years ended December 31, 2002, 2001 and 2000



V.

Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000



VI.

Notes to Consolidated Financial Statements



VII.

Schedule II, Valuation and Qualifying Accounts for the years ended December 31, 2002, 2001 and 2000.

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Report of Independent Accountants

The Board of Directors
SIRVA, Inc.:

        In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of North American Van Lines, Inc. and its subsidiaries at December 31, 2002 and December 31, 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. In addition, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        As discussed in Note 6 to the consolidated financial statements, the Company changed the manner in which it accounts for goodwill and other intangible assets upon adoption of the accounting guidance of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets on January 1, 2002.

PricewaterhouseCoopers LLP
Chicago, Illinois

February 7, 2003

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NORTH AMERICAN VAN LINES, INC.

Consolidated Balance Sheets

At December 31, 2002 and 2001

(Dollars in thousands)

The accompanying notes are an integral part of the consolidated financial statements.

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NORTH AMERICAN VAN LINES, INC.

Consolidated Balance Sheets

At December 31, 2002 and 2001

(Dollars in thousands except share data)

        The accompanying notes are an integral part of the consolidated financial statements.

39

NORTH AMERICAN VAN LINES, INC.

Consolidated Statements of Operations

For the years ended December 31, 2002, 2001 and 2000

(Dollars in thousands)

        The accompanying notes are an integral part of the consolidated financial statements.

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NORTH AMERICAN VAN LINES, INC.

Consolidated Statements of Changes in Stockholder's Equity

For the years ended December 31, 2002, 2001 and 2000

(Dollars in thousands)