AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 5, 1999
REGISTRATION NO. 333-65563

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

POST-EFFECTIVE

AMENDMENT NO. 1
TO
FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

UNITED ROAD SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 7549 94-3278455
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
8 AUTOMATION LANE
ALBANY, NEW YORK 12205
(518) 446-0140
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
EDWARD T. SHEEHAN
CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
UNITED ROAD SERVICES,
INC.
8 AUTOMATION LANE
ALBANY, NEW YORK 12205
(518) 446-0140
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

---------------
COPIES TO:
KAREN A. DEWIS, ESQ.
MCDERMOTT, WILL & EMERY
600 13TH STREET, N.W.
WASHINGTON, D.C. 20005-3096
(202) 756-8000

---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]

---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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

PROSPECTUS

1,213,944 SHARES

UNITED ROAD SERVICES, INC.

COMMON STOCK

This is an offering of shares of Common Stock of United Road Services, Inc. by
certain existing stockholders who received shares of Common Stock in connection
with our acquisitions.

Selling stockholders may sell shares at prices related to the prevailing market
prices or at negotiated prices. The Nasdaq National Market lists our Common
Stock under the symbol "URSI". On December 31, 1998, the last reported sale
price of the Common Stock was $18 3/8 per share.

We will not receive any proceeds when stockholders sell their shares. We will
pay all expenses to register the shares, except that the selling stockholders
will pay any underwriting commissions and expenses, brokerage fees, transfer
taxes, and the fees and expenses of their attorneys and other experts.

INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 4.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

The date of this Prospectus is January , 1999

You should rely only on the information contained in this document or other
documents that we have referred you to. We have not authorized anyone to
provide you with information that is different.

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

TABLE OF CONTENTS

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

Available Information............................................... ii
Prospectus Summary.................................................. 1
Risk Factors........................................................ 5
Price Range of Common Stock......................................... 13
Dividend Policy..................................................... 13
Capitalization...................................................... 14
Selected Financial Data............................................. 15
Management's Discussion and Analysis of Financial Condition and
Results of Operations.............................................. 17
Business............................................................ 24
Management.......................................................... 32
Certain Transactions................................................ 36
Principal Stockholders.............................................. 38
Selling Stockholders................................................ 39
Plan of Distribution................................................ 40
Description of Capital Stock........................................ 41
Legal Matters....................................................... 44
Experts............................................................. 44
Index to Financial Statements....................................... F-1

AVAILABLE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy reports, statements, or other
information at the SEC's public reference rooms in Washington, D.C., New York,
New York or Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the SEC at "http://www.sec.gov." You can also review
copies of our SEC filings at the offices of the Nasdaq Stock Market, Inc., 1735
K Street, N.W., Washington, D.C. 20006.

We have filed with the SEC a registration statement on Form S-1 to register
shares of our Common Stock. This prospectus is part of that registration
statement and, as permitted by the SEC'S rules, does not contain all the
information set forth in the registration statement. For further information
with respect to us and the Common Stock, you may refer to the registration
statement and to the exhibits and schedules filed as part of the registration
statement. You can review and copy the registration statement and its exhibits
and schedules at the public reference facilities maintained by the SEC as
described above. The registration statement, including its exhibits and
schedules, is also available on the SEC's web site.

This prospectus may contain summaries of contracts or other documents. Because
they are summaries, they will not contain all of the information that may be
important to you. If you would like complete information about a contract or
other document, you should read the copy filed as an exhibit to the
registration statement.

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

This prospectus contains certain forward-looking statements which involve
substantial risks and uncertainties. These forward-looking statements can
generally be identified because the context of the statement includes words
such as "may," "will," "expect," "anticipate," "intend," "estimate,"
"continue," "believe" or other similar words. Similarly, statements that
describe our future plans, objectives and goals are also forward-looking
statements. Our actual results, performance or achievements could differ
materially from those expressed or implied in these forward-looking statements
as a result of certain factors, including those set forth in "Risk Factors" and
elsewhere in this prospectus.

PROSPECTUS SUMMARY

This summary highlights some information from this prospectus. It may not
contain all of the information important to you. To understand this offering
fully, you should read the entire prospectus carefully, including the risk
factors and the financial statements.

Please note that throughout this prospectus we use the terms "Founding
Companies" which means the seven companies that we acquired at the time of our
initial public offering in May 1998, and "Selected Acquired Companies" which
means the eleven companies that we have acquired since May 1998 whose separate
audited financial statements are required to be included in this prospectus.

Additionally, references in this prospectus to "we","our" or "us" refer to
United Road Services, Inc., not to any selling stockholders.

THE COMPANY

United Road Services, Inc. was formed in July 1997 to become a leading national
provider of motor vehicle and equipment towing, recovery and transport
services. We believe that we are now one of the largest providers of these
services in the United States.

We offer a broad range of towing, recovery, transport and related services,
including:

. towing, impounding and storing motor vehicles;

. conducting lien sales and auctions of abandoned vehicles;

. recovering heavy-duty commercial vehicles; and

. transporting new and used vehicles and heavy construction equipment.

We derive revenue from towing, recovery and transport services based on
distance, time or fixed charges and from related impounding and storage fees.
If impounded vehicles are not claimed by their owners within certain time
periods, we are entitled to be paid from the proceeds of lien sales or
auctions.

Our customers include:

. commercial entities, such as automobile leasing companies and insurance
companies,

. automobile auction companies,

. automobile dealers,

. repair shops and fleet operators,

. municipalities,

. law enforcement agencies such as police, sheriff and highway patrol
departments, and

. individual motorists.

STRATEGY

Our management team includes executives with experience in implementing
acquisition programs and effectively integrating acquired businesses as well as
local managers who have significant contacts and experience in towing, recovery
and transport services. We believe that this combination and the fragmented
industry provides us with the capability and opportunity to implement an
effective consolidation strategy.

In order to increase our revenue and profitability, we have developed the
following operating and acquisition strategies:

Operating Strategy:

. Provide High Quality Service

. Expand Scope of Services and Customer Base

. Achieve Operating Efficiencies

. Maintain Local Expertise

Acquisition Strategy:

. Enter New Geographic Markets

. Expand Within Existing Geographic Markets

RECENT DEVELOPMENTS

Between May 6, 1998 when we completed our initial public offering and the
Founding Company acquisitions and December 31, 1998, we acquired a total of 34
additional motor vehicle and equipment towing, recovery and transport service
business (including Keystone Towing, Inc. ("Keystone")) for aggregate
consideration of approximately $79.6 million in cash, 2,918,608 shares of
Common Stock and the assumption of approximately $23.2 million of indebtedness.
Among the companies we acquired were E&R Towing and Garage, Inc. and
Environmental Auto Removal, Inc. (collectively "E&R"), which we acquired on
August 21, 1998 for an aggregate purchase price of approximately $26.0 million,
consisting of approximately $22.8 million in cash and 173,498 shares of Common
Stock, and Pilot Transport, Inc. ("Pilot"), which we acquired on December 9,
1998 for approximately $25.0 million, consisting of approximately $10.6 million
in cash and 1.0 million shares of Common Stock. Financial statements and pro
forma financial information for E&R and Pilot are included among the financial
information contained in this prospectus.

On November 19, 1998, we entered into a Purchase Agreement with Charter URS LLC
("Charterhouse") providing for the issuance to Charterhouse of up to $75
million aggregate principal amount of our 8% Convertible Subordinated
Debentures due 2008. The Debentures are convertible into our Common Stock at an
exercise price of $15.00 per share, subject to adjustment as provided in the
Purchase Agreement. The conversion price exceeded the fair market value of the
Common Stock on the date of execution of the Purchase Agreement. We issued
$43.5 million aggregate principal amount of Debentures to Charterhouse at a
first closing on December 7, 1998. Issuance of the remaining $31.5 million
aggregate principal amount of Debentures to Charterhouse is subject to approval
of our stockholders.

You can contact us at the following address and telephone number: United Road
Services, Inc., 8 Automation Lane, Albany, New York 12205, 518-446-0140.

SUMMARY PRO FORMA COMBINED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following unaudited pro forma combined statement of operations data present
our historical financial data adjusted to give effect to (i) our purchases of
the Founding Companies and the Selected Acquired Companies as if they occurred
on January 1, 1997, and (ii) certain pro forma adjustments to the historical
statement of operations data described below. The unaudited pro forma combined
balance sheet data present our historical financial data adjusted to give
effect to those purchases of Selected Acquired Companies which occurred after
September 30, 1998, as if they occurred on September 30, 1998. The unaudited
pro forma data are not necessarily indicative of the results we would have
obtained had these events actually occurred on such dates or of our future
results. You should refer to other sections of this prospectus for more
information, including, "Selected Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and our Unaudited
Pro Forma Combined Financial Statements and historical financial statements for
the Founding Companies and the Selected Acquired Companies.

NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, 1997 1998
----------------- -----------------

STATEMENT OF OPERATIONS
DATA:
Net revenue............ $ 143,431 $ 129,382
Cost of revenue........ 101,139 90,320
----------- -----------
Gross profit........... 42,292 39,062
Selling, general and
administrative
expenses(1)........... 22,949 20,151
Goodwill
amortization(2)....... 3,769 2,965
----------- -----------
Income from operations. 15,574 15,946
Interest expense and
other, net............ 3,849 2,898
----------- -----------
Income before income
taxes................. 11,725 13,048
Income tax expense(3).. 5,887 6,085
----------- -----------
Net income............. $ 5,838 $ 6,963
=========== ===========
Diluted net income per
share................. $ 0.53 $ 0.63
=========== ===========
Shares used in
computing diluted net
income per share(4)... 10,981,738 10,981,738
=========== ===========

AT SEPTEMBER 30, 1998
-----------------------------------
ACTUAL PRO FORMA
COMBINED

BALANCE SHEET DATA:
Working capital
(deficit)............. $ 1,235 $ (4,118)(5)
Total assets........... 196,628 256,296
Long-term obligations,
excluding current
installments.......... 28,253 48,675
Stockholders' equity... 146,448 175,594

(1) Includes agreed upon reductions in salaries, bonuses and benefits to the
former owners of the Founding Companies and the Selected Acquired Companies
of $6.7 million for the year ended December 31, 1997 and $3.5 million for
the nine-months ended September 30, 1998.
(2) Consists of amortization, over a 40-year estimated life, of goodwill to be
recorded as a result of the acquisitions of the Founding Companies and the
Selected Acquired Companies.
(3) Assumes a corporate income tax rate of 38% and the non-deductibility of
goodwill.

(4) Shares used in computing diluted net income per share include (i) 2,604,000
shares issued to members of our management in connection with our
formation, (ii) 218,736 shares issued to investors pursuant to subscription
agreements, (iii) 5,405,022 shares issued to owners of the Founding
Companies and the Selected Acquired Companies in connection with the
acquisitions; (iv) 2,594,863 of the shares issued in our initial public
offering, representing that portion of the total 7,590,000 shares issued in
our initial public offering necessary to pay the cash portion of the
purchase price for the acquisitions of the Founding Companies and expenses
related to the initial public offering and the acquisitions of the Founding
Companies; and (v) 159,117 shares reflecting the incremental effect of
options.

(5) Includes $50.0 million paid to owners of the Selected Acquired Companies,
representing the cash portion of the purchase price for the acquisitions of
the Selected Acquired Companies.

RISK FACTORS

BEFORE YOU BUY SHARES OF COMMON STOCK FROM ANY SELLING STOCKHOLDER, YOU SHOULD
BE AWARE THAT THERE ARE VARIOUS RISKS, INCLUDING THOSE DESCRIBED BELOW. YOU
SHOULD CONSIDER CAREFULLY THESE RISK FACTORS, TOGETHER WITH ALL OF THE OTHER
INFORMATION IN THIS PROSPECTUS, BEFORE YOU DECIDE TO PURCHASE SHARES OF OUR
COMMON STOCK.

SOME OF THE INFORMATION IN THIS PROSPECTUS MAY CONTAIN FORWARD-LOOKING
STATEMENTS. SUCH STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
WORDS SUCH AS "MAY," "WILL," "EXPECT," "ANTICIPATE," "INTEND," "ESTIMATE,"
"CONTINUE," "BELIEVE" AND SIMILAR WORDS. THESE STATEMENTS DISCUSS FUTURE
EXPECTATIONS, CONTAIN PROJECTIONS OF OUR FUTURE RESULTS OF OPERATIONS OR
FINANCIAL CONDITION OR STATE OTHER "FORWARD-LOOKING" INFORMATION. WHEN
CONSIDERING SUCH STATEMENTS, YOU SHOULD KEEP IN MIND THE RISK FACTORS AND OTHER
CAUTIONARY STATEMENTS IN THIS PROSPECTUS. THE RISK FACTORS NOTED IN THIS
SECTION AND OTHER FACTORS NOTED IN THIS PROSPECTUS COULD CAUSE OUR ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING
STATEMENT.

LIMITED COMBINED OPERATING HISTORY; RISKS OF INTEGRATING ACQUIRED COMPANIES

We conducted no operations and generated no net revenue prior to our initial
public offering in May 1998. At the time of our initial public offering, we
purchased the seven Founding Companies. Between May 6, 1998 and December 31,
1998, we have acquired a total of 34 additional businesses. Prior to their
acquisition by us, the companies we acquired were operated as independent
entities, and we cannot assure you that we will be able to integrate the
operations of these businesses successfully into our operations or to institute
the necessary systems and procedures (including accounting and financial
reporting systems) to manage the combined enterprise on a profitable basis. Our
management group has been assembled only recently, and they may not be able to
successfully manage the combined entity or to implement effectively our
operating strategy and acquisition program. The Unaudited Pro Forma Combined
Financial Statements included in this prospectus cover periods when the
companies we acquired were not under common control or management with us and
are not necessarily indicative of our future operating results. Our inability
to integrate these companies successfully would have a material adverse effect
on our business, financial condition and results of operations. See "Business-
Strategy" and "Management."

RISKS RELATED TO OUR ACQUISITION STRATEGY

Part of our strategy is to expand our operations by buying additional towing,
recovery and transport service businesses. We may not be able to identify,
acquire or manage profitably additional businesses or integrate successfully
any acquired businesses without substantial costs, delays or other operational
or financial problems. Further, acquisitions involve a number of special risks,
including failure of the acquired business to achieve expected results,
diversion of management's attention, failure to retain key personnel of the
acquired business and risks associated with unanticipated events or
liabilities. Some or all of these additional risks could have a material
adverse effect on our business, financial condition and results of operations.
We may consider acquiring complementary businesses that provide services that
we do not currently provide. We may not be able to successfully integrate these
complementary businesses.

In addition, the companies that we have already acquired or other companies we
may acquire in the future may not achieve anticipated revenues and earnings.

RISKS RELATED TO ACQUISITION FINANCING

We cannot now predict the timing, size or success of our future acquisitions or
the associated capital requirements. We currently intend to finance future
acquisitions by using a combination of Common Stock, cash and debt. To the
extent we sell shares of Common Stock to finance future acquisitions, the
interests of existing stockholders will be diluted. If the Common Stock does
not maintain a sufficient market value, or if the owners of the businesses we
wish to acquire are unwilling to accept Common Stock as part of the purchase
price, we may be required to use more of our cash resources, if available, in
order to pursue our acquisition program. If we do not have sufficient cash
resources, our growth could be limited unless we are able to borrow money or
sell more stock. We may not be able to obtain the cash we will need for our
acquisition program on acceptable terms, or at all. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."

RISKS RELATED TO OPERATING STRATEGY

A key element of our operating strategy is to increase the revenue and improve
the profitability of the companies we acquire.

We intend to increase revenue by continuing to provide high quality service and
by expanding both the scope of services we offer and our customer base. Our
ability to increase revenue will be affected by various factors, including the
demand for towing, recovery and transport services, the level of competition in
the industry, our ability to expand the range of services we offer to existing
customers, our ability to attract new customers and our ability to attract and
retain a sufficient number of qualified personnel.

We intend to improve profitability by various means, including eliminating
duplicative operating costs and overhead, improving our asset utilization and
capitalizing on our enhanced purchasing power. Our ability to improve
profitability will be affected by various factors, including the costs
associated with centralizing our administrative functions, our ability to
benefit from the elimination of redundant operations, and our ability to
benefit from enhanced purchasing power. Many of these factors are beyond our
control, and our operating strategy may not be successful. See "Business--
Strategy."

MANAGEMENT OF GROWTH

Our strategy is to expand our operations through acquisitions and internal
growth. We expect to spend significant time and resources in evaluating,
completing and integrating acquisitions. Our systems, procedures and controls
may not be adequate to support our operations as they expand. Any future growth
will impose significant added responsibilities on members of our senior
management, including the need to recruit and integrate new senior level
managers and executives. We may not be able to successfully recruit and retain
such additional management. Our failure to manage our growth effectively or our
inability to attract and retain additional qualified management, could have a
material adverse effect on our business, financial condition and results of
operations.

COMPETITION

The market for towing, recovery and transport services is extremely
competitive. Such competition is based primarily on quality, service,
timeliness, price and geographic proximity. We compete with certain large
companies on a regional and local basis, some of which may have greater
financial and marketing resources than we have. We also compete with thousands
of smaller local companies, which may have lower overhead cost structures than
we have and may, therefore, be able to provide their services at lower rates
than we can. We may also face competition for acquisition candidates from
companies that are attempting to consolidate towing, recovery and transport
service providers. Some of our current or future competitors may be better
positioned than we are to finance acquisitions, to pay higher prices for
businesses or to finance their internal operations.

NEED FOR INTEGRATED INFORMATION TECHNOLOGY SYSTEMS

Our accounting and financial reporting activities are centralized at our
headquarters in Albany, New York. In addition, we are in the process of
developing a national dispatch system for our transport operations. We
anticipate that we will need to upgrade and expand our information technology
systems on an ongoing basis as we expand our operations and complete
acquisitions. We may encounter unexpected delays and costs in implementing such
systems. Additionally, these systems, when installed, may not function as we
expect. See "Business--Dispatch and Information Systems."

DEPENDENCE ON MUNICIPALITY AND LAW ENFORCEMENT AGENCY RELATIONSHIPS

We provide services to certain municipalities and a number of law enforcement
agencies under contracts. These contracts typically have terms of five years or
less and in some cases are subject to competitive bidding upon expiration.
These contracts may not be renewed upon expiration or may be renewed on terms
less favorable to us. It is also possible that at some future time more of our
customers may implement a competitive bidding process for the award of towing
contracts. With some municipality and law enforcement agency customers, we have
no formal contract, and it is possible that one or more customers would elect,
at any time to stop utilizing our services. See "Business--Operations and
Services Provided."

REGULATION

Towing, recovery and transport services are subject to various federal, state
and local laws and regulations regarding equipment, driver certification,
training and recordkeeping, and workplace safety. Our vehicles and facilities
are subject to periodic inspection by the United States Department of
Transportation and similar state and local agencies. Our failure to comply with
these laws and regulations could subject us to substantial fines and could lead
to the closure of operations that are not in compliance. In addition, certain
government contracting laws and regulations may affect our ability to acquire
complementary businesses in a given city or county. Companies providing towing,
recovery and transport services are required to have numerous federal, state
and local licenses and permits. When we buy such companies, we must transfer or
apply for such licenses and permits in order to conduct the acquired business.
Any failure to obtain such licenses and permits or any delay in our receipt of
such licenses and permits could have a material adverse effect on our business,
financial condition and results of operations.

POTENTIAL EXPOSURE TO ENVIRONMENTAL LIABILITIES

Our operations are subject to a number of federal, state and local laws and
regulations relating to the storage of petroleum products, hazardous materials
and impounded vehicles, as well as safety regulations relating to the upkeep
and maintenance of our vehicles. In particular, our operations are subject to
federal, state and local laws and regulations governing leakage from salvage
vehicles, waste disposal, the handling of hazardous substances, environmental
protection, remediation, workplace exposure and other matters. It is possible
that an environmental claim could be made against us or that we could be
identified by the Environmental Protection Agency, a state agency or one or
more third parties as a potentially responsible party under federal or state
environmental laws. If that happens, we could be forced to incur substantial
investigation, legal and remediation costs. Such costs could have a material
adverse effect on our business, financial condition and results of operations.

POTENTIAL LIABILITIES ASSOCIATED WITH ACQUISITIONS

The companies that we have acquired or those that we acquire in the future may
have liabilities that we did not or may not discover during our pre-acquisition
due diligence investigations. Such liabilities may include liabilities arising
from environmental contamination or non-compliance by prior owners with
environmental laws or regulatory requirements. As a successor owner or
operator, we may be responsible for such liabilities. The businesses we acquire
generally handle and store petroleum and other hazardous substances at their
facilities. There may have been or there may be releases of these hazardous
substances into the soil or groundwater which we may be required under federal,
state or local law to investigate and clean up. Any such liabilities or related
investigations or clean-ups could have a material adverse effect on our
business, financial condition and results of operations.

LABOR RELATIONS

Although currently none of our employees are members of unions, it is possible
that some employees could unionize in the future or that we could acquire
companies with unionized employees. If our employees were to unionize or we
were to acquire a company with unionized employees, we could incur higher
ongoing labor costs and could experience a significant disruption of our
operations in the event of a strike or other work stoppage. Any of these
possibilities could have a material adverse effect on our business, financial
condition and results of operations.

LIABILITY AND INSURANCE

From time to time, we could be subject to various claims relating to our
operations, including (i) claims for personal injury or death caused by
accidents involving our vehicles and service personnel; (ii) worker's
compensation claims and (iii) other employment related claims. Although we
maintain insurance (subject to customary deductibles), our insurance may not
cover certain types of claims, such as claims for punitive damages or for
damages arising from intentional misconduct (which are often alleged in third-
party lawsuits). In the future, we may not be able to maintain adequate levels
of insurance on reasonable terms. In addition, it is possible that existing or
future claims may exceed the level of our insurance or that we may not have
sufficient capital available to pay any uninsured claims.

QUARTERLY FLUCTUATIONS OF OPERATING RESULTS

We may experience significant fluctuations in quarterly operating results due
to a number of factors. These factors could include: (i) the timing of
acquisitions and related costs; (ii) our success in integrating acquired
companies; (iii) the loss of significant customers or contracts; (iv) the
timing of expenditures for new equipment and the disposition of used equipment;
(v) price changes in response to competitive factors; and (vi) general economic
conditions. As a result, you should not rely on operating results for any one
quarter as an indication or guarantee of performance in future quarters.

SEASONALITY

The demand for towing, recovery and transport services is subject to seasonal
variations. Specifically, the demand for towing and recovery services is
generally highest in extreme weather, such as heat, cold, rain and snow.
Consequently, the summer and winter seasons tend to be the busiest times.
Conversely, auto transport tends to be strongest in the months with the mildest
weather, since inclement weather tends to slow the delivery of vehicles.

RELIANCE ON KEY PERSONNEL

We are highly dependent upon our senior management team. In particular, the
loss of the services of Edward T. Sheehan, Dr. Allan D. Pass or Donald J. Marr
could have a material adverse effect on our business, financial condition and
results of operations. We do not presently maintain "key man" life insurance
with respect to members of senior management.

Our operating facilities are managed by regional and local managers who have
substantial knowledge and experience of the local towing, recovery and
transport markets served, including former owners and employees of the
companies we have acquired. The loss of one or more of these managers could
have a material adverse effect on our business, financial condition and results
of operations if we are unable to find a suitable replacement in a timely
manner.

The timely, professional and dependable service demanded by towing, recovery
and transport customers requires an adequate supply of skilled dispatchers,
drivers and support personnel. Accordingly, our success will depend on our
ability to employ, train and retain the personnel necessary to meet our service
requirements. From time to time, and in particular areas, there are shortages
of skilled personnel. In the future, we may not be able to maintain an adequate
skilled labor force necessary to operate efficiently, our labor expenses may
increase as a result of a shortage in the supply of skilled personnel, or we
may have to curtail our planned growth as a result of labor shortages.

CONTROL BY EXISTING MANAGEMENT

Our executive officers and directors beneficially owned 2,168,163 shares, or
approximately 13.8% of the outstanding Common Stock as of December 31, 1998.
Accordingly, these persons, if acting in concert, hold sufficient voting power
to significantly influence the election of all of our directors and the outcome
of all issues on which stockholders vote. Such concentration of ownership may
have the effect of delaying, deferring or preventing a change in control or
transactions in which our

stockholders might receive a premium for their shares over prevailing market
prices. See "Principal Stockholders."

LACK OF SENIOR MANAGEMENT EXPERIENCE IN TOWING, RECOVERY AND TRANSPORT SERVICES

Our senior management has no prior experience in towing, recovery and transport
services. As a result, our senior management may not be able to conduct our
operations profitably, to effectively integrate the operations of acquired
companies or to hire and retain personnel with relevant experience. Any failure
by our senior management to accomplish any such thing, could have a material
adverse effect on our business, financial condition and results of operations.

EARN-OUT PAYMENTS

We may be required to make certain "earn-out" payments to the owners of
individual Founding Companies and Keystone, based on their future revenues. For
example, if the 1998 net revenues of any of these companies is at least equal
to 110% of its 1997 net revenue, we will be required to make a payment to the
former owners of the successful business. The target net revenue for the years
1999 through 2002 is 110% of the greater of the prior year's actual net revenue
or target net revenue. If target net revenue is achieved for a particular year,
we will be required to make an initial payment equal to 5% of the excess of
actual net revenue over the target level. In addition, once the target level of
net revenue for a particular year is met, we must make subsequent and equal
payments for each year through 2002, but only if the net revenue for each later
year exceeds the net revenue for the year the earn-out target was first
achieved.

To the extent any Founding Company or Keystone meets its net revenue growth
target without a corresponding increase in its operating results, this could
have a material adverse effect on our business, financial condition and results
of operations. See "Certain Transactions."

CERTAIN ANTI-TAKEOVER PROVISIONS

Our Board of Directors has the authority to issue up to 5,000,000 shares of
Preferred Stock and to determine the terms, including voting rights, of those
shares without any further vote or action by the stockholders. The rights of
the holders of Common Stock are subject to, and may be adversely affected by,
the rights of the holders of any Preferred Stock that may be issued in the
future. The issuance of Preferred Stock could have the effect of discouraging a
third party from attempting to buy a majority of our outstanding voting stock.
We have no current plans to issue shares of Preferred Stock.

Our bylaws and indemnification agreements provide that we will indemnify our
officers and directors against losses they may incur in legal proceedings
resulting from their service as directors and officers. In addition, our
certificate of incorporation provides for a classified Board of Directors and
limits the ability of stockholders to (i) fill vacancies on the Board of
Directors, (ii) call special meetings of the stockholders, (ii) take action by
written consent or (iv) bring certain matters before a meeting of the
stockholders without prior notice. In addition, Section 203 of the Delaware
General Corporation Law restricts certain business combinations with any
"interested stockholder" as defined by the statute. These provisions are also
intended to discourage potential acquisition

proposals and could delay or prevent a change in control. As a result, they may
cause the market price of the Common Stock to be lower than it otherwise would
be. Such provisions also may have the effect of preventing changes in our
management. See "Description of Capital Stock."

ABSENCE OF DIVIDENDS

We have never paid any cash dividends and, for the foreseeable future, intend
to retain any future earnings for the development of our business. See
"Dividend Policy."

LIMITED TRADING HISTORY OF COMMON STOCK; STOCK PRICE VOLATILITY

Our Common Stock was first publicly traded on May 1, 1998. The market price of
the Common Stock may fluctuate substantially due to a variety of factors. These
factors may include: (i) quarterly fluctuations in results of operations, (ii)
the liquidity of the market for the Common Stock, (iii) investor perceptions of
our company and the motor vehicle and equipment towing, recovery and transport
industry in general, (iv) changes in earnings estimates by analysts, (v) sales
of Common Stock by existing holders, (vi) loss of key personnel, (vii) general
economic conditions, and (viii) other factors. The market price for our Common
Stock may also be affected by our ability to meet analysts' expectations.

In addition, the stock market is subject to extreme price and volume
fluctuations. This volatility has had a significant effect on the market prices
of securities issued by many companies for reasons unrelated to the operating
performance of these companies. In the past, following periods of volatility in
the market price of a company's securities, such companies have been sued by
stockholders. If we were sued, it could result in substantial costs and a
diversion of management's attention and resources, which could have a material
adverse effect on our financial condition and results of operations. See "Price
Range of Common Stock."

YEAR 2000 COMPLIANCE

We have taken a variety of steps in an effort to assess our readiness for
potential year 2000 problems. We have recently centralized our accounting and
financial reporting activities at our headquarters in Albany, New York. The
software that we have implemented to accomplish this is year 2000 compliant. In
addition, in order to make our operations more efficient, we are developing a
national dispatch system for our transport operations and are replacing all of
our local operating systems with standardized operational software. Both the
national transport dispatch system and the new local operating systems will be
year 2000 compliant and we currently expect that they will be installed prior
to January 1, 2000. If an unforeseeable event were to make us unable to install
these systems by 2000, we would need to rely on our local dispatch and
operating systems, which we believe may not be year 2000 compliant. If the
local systems become inoperable, we expect that we will be able to manually
perform such functions, although not as efficiently. We cannot now predict the
likelihood, extent or impact of such events on our results of operations or
financial condition.

We are currently developing a plan to review with our significant vendors,
customers and financial institutions their individual year 2000 compliance.
Such a review has not yet been formally commenced. We cannot now predict the
impact that year 2000 problems at our vendors, customers or financial
institutions will have on us.

Other than ensuring that our centralized systems are year 2000 compliant, and
given that our operations and our interactions with our vendors and customers
have historically been conducted in a substantially manual mode, we have not
developed a contingency plan to guide our responses to year 2000 problems when
they may arise. We intend to continue to examine the year 2000 issue as it
potentially impacts us and will develop a contingency plan if we believe one is
necessary.

No one knows the extent of the potential impact of the year 2000 problem
generally and we cannot predict the likelihood that year 2000 problems will
cause a significant disruption in the economy as a whole. If you would like
additional information regarding our year 2000 compliance, you should read
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Year 2000 Compliance."

PRICE RANGE OF COMMON STOCK

The Common Stock began trading on the Nasdaq National Market on May 1, 1998
under the symbol "URSI." The following table sets forth the high and low sale
prices of the Common Stock since May 1, 1998, as reported by Nasdaq.

HIGH LOW

1998
Second Quarter (from May 1)............................. $19 9/16 $15 1/8
Third Quarter .......................................... 26 9 1/2
Fourth Quarter (through December 31).................... 19 1/4 5 3/4

On December 31, 1998, the last reported sale price of the Common Stock was $18
3/8 per share. As of December 31, 1998, there were approximately 101 holders of
record of Common Stock.

DIVIDEND POLICY

We have never paid any cash dividends and intend, for the foreseeable future,
to retain any future earnings for the development of our business. Our credit
facility restricts our ability to pay dividends. Our future dividend policy
will be determined by the Board of Directors on the basis of various factors,
including our results of operations, financial condition, capital requirements
and investment opportunities.

CAPITALIZATION

The following table sets forth, as of September 30, 1998, (i) our actual
capitalization and (ii) our capitalization on a pro forma combined basis
adjusted to give effect to our purchases of those Selected Acquired Companies
that occurred after September 30, 1998. You should read this table with the
Unaudited Pro Forma Combined Financial Statements appearing elsewhere in this
prospectus.

AT SEPTEMBER 30, 1998
-----------------------
PRO FORMA
ACTUAL COMBINED
(IN THOUSANDS)

Short-term obligations, including current
installments......................................... $ 3,803 $ 8,823
======== ========
Long-term obligations, excluding current installments. $ 28,253 $ 48,675
-------- --------
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares
authorized; no shares issued and outstanding......... -- --
Common stock, $0.001 par value, 35,000,000 shares
authorized; 14,497,384 shares issued and outstanding
actual; and 10,493,735 shares issued and outstanding
pro forma combined................................... 14 16
Additional paid-in capital............................ 144,413 173,557
Retained earnings..................................... 2,021 2,021
-------- --------
Total stockholders' equity.......................... 146,448 175,594
-------- --------
Total capitalization................................ $174,701 $224,269
======== ========

SELECTED FINANCIAL DATA

We purchased the Founding Companies simultaneously with our initial public
offering in May 1998. During the remainder of 1998 we purchased a total of 34
additional businesses. The following selected historical financial data as of
December 31, 1997 and for the period from July 25, 1997 (inception) to December
31, 1997 have been derived from our audited financial statements. The selected
financial data as of September 30, 1998 and for the nine-month period then
ended have been derived from, and are qualified by reference to, our unaudited
financial statements included elsewhere in this prospectus.

For financial statement presentation purposes, Northland Auto Transporters,
Inc. and Northland Fleet Leasing, Inc., ("Northland"), one of the Founding
Companies, has been designated as our predecessor entity. The following
selected historical financial data for Northland as of December 31, 1996 and
1997 and for each of the years in the three-year period ended December 31, 1997
have been derived from the audited financial statements of Northland.

In our opinion, the unaudited data shown below contain all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation. The results of the interim periods are not necessarily indicative
of the results for the full year. You should read the following selected
financial data in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," the Unaudited Pro Forma
Combined Financial Statements and the historical financial statements for the
Founding Companies and the Selected Acquired Companies included elsewhere in
this prospectus.

NINE MONTHS
PERIOD FROM YEAR ENDED ENDED
JULY 25, 1997 DECEMBER 31, 1997 SEPTEMBER 30, 1998
(INCEPTION) TO ----------------- --------------------
DECEMBER 31, 1997 PRO FORMA PRO FORMA
----------------- COMBINED ACTUAL COMBINED
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

STATEMENT OF OPERATIONS
DATA--UNITED ROAD
SERVICES:
Net revenue............. $ -- $ 143,431 $ 44,842 $ 129,382
Cost of revenue......... -- 101,139 32,073 90,320
---------- ---------- --------- ----------
Gross profit............ -- 42,292 12,769 39,062
Selling, general and
administrative
expenses(1)............ 174 22,949 7,565 20,151
Goodwill
amortization(2)........ -- 3,769 883 2,965
---------- ---------- --------- ----------
Income (loss) from
operations............. (174) 15,574 4,321 15,946
Interest income
(expense) and other,
net.................... -- (3,849) 89 (2,898)
---------- ---------- --------- ----------
Income (loss) before
income tax............. (174) 11,725 4,410 13,048
Income tax expense(3)... -- 5,887 2,215 6,085
---------- ---------- --------- ----------
Net income (loss)....... $ (174) $ 5,838 $ 2,195 6,963
========== ========== ========= ==========
Diluted net income
(loss) per share....... $ (0.08) $ 0.53 $ 0.25 $ 0.63
========== ========== ========= ==========
Shares used in computing
diluted net income
(loss) per share....... 2,055,300(4) 10,981,738(5) 8,937,442 10,981,738(5)
========== ========== ========= ==========

AT AT SEPTEMBER 30, 1998
DECEMBER 31, -----------------------
1997 PRO FORMA
ACTUAL COMBINED
(IN THOUSANDS)

BALANCE SHEET DATA--UNITED ROAD SERVICES:
Working capital (deficit)................ $(104) $ 1,235 $ (4,188)(6)
Total assets............................. 50 196,628 256,296
Long-term obligations, excluding current
installments............................ -- 28,253 48,675
Stockholders' equity (deficit)........... (104) 146,448 175,594

YEARS ENDED DECEMBER 31,
--------------------------------------
1993 1994 1995 1996 1997
HISTORICAL STATEMENT OF OPERATIONS DATA-- (IN
NORTHLAND: THOUSANDS)

Net revenue.......................... $4,736 $3,769 $4,671 $6,353 $10,159
Operating income (loss).............. (128) (44) 324 346 1,438
Other income (expense), net.......... 199 117 (18) -- (49)
Net income........................... 71 67 275 346 1,054

AT DECEMBER 31,
--------------------------------------
1993 1994 1995 1996 1997
HISTORICAL BALANCE SHEET DATA-- (IN
NORTHLAND: THOUSANDS)

Working capital...................... $ 387 $ 52 $ 375 $ 235 $ 399
Total assets......................... 1,193 2,368 2,653 3,268 5,465
Long-term obligations, excluding
current installments................ 60 205 257 331 1,074
Stockholders' equity................. 815 1,369 1,645 1,991 3,045

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

(1) Includes agreed upon reductions in salaries, bonuses and benefits to the
former owners of the Founding Companies and the Selected Acquired Companies
of $6.7 million for the year ended December 31, 1997 and $3.5 million for
the nine months ended September 30, 1998.
(2) Consists of amortization, over a 40-year estimated life, of goodwill to be
recorded as a result of the acquisitions of the Founding Companies and
Selected Acquired Companies.
(3) Assumes a corporate income tax rate of 38% and the non-deductibility of
goodwill.
(4) Represents the actual weighted average outstanding shares, adjusted for the
incremental effect of options.

(5) Shares used in computing diluted net income per share include (i)
2,604,000 shares issued to members of our management in connection with
our formation, (ii) 218,736 shares issued to investors pursuant to
subscription agreements, (iii) 5,405,022 shares issued to owners of the
Founding Companies and the Selected Acquired Companies in connection with
the acquisitions; (iv) 2,594,863 of the shares issued in our initial
public offering, representing that portion of the total 7,590,000 shares
issued in our initial public offering necessary to pay the cash portion of
the purchase price for the acquisitions of the Founding Companies and
expenses related to the initial public offering and the acquisitions of
the Founding Companies; and (v) 159,117 shares reflecting the incremental
effect of options.

(6) Includes $50.0 million paid to owners of the Selected Acquired Companies,
representing the cash portion of the purchase price for the acquisitions of
the Selected Acquired Companies.

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

You should read the following discussion and analysis in conjunction with the
Financial Statements and "Selected Financial Data" which we have provided in
this prospectus. In addition to the historical information that we provide, the
discussion in this prospectus contains forward-looking statements that involve
risks and uncertainties, such as statements of our plans, objectives,
expectations and intentions. You should read the cautionary statements made in
this prospectus as being applicable to all related forward-looking statements
wherever they appear in this prospectus. Our actual results could differ
materially from those we discuss in this prospectus. Factors that could cause
or contribute to such differences include those discussed below, as well as
those discussed elsewhere in this prospectus.

INTRODUCTION

We provide a broad range of towing, recovery, transport and related services.
The services we offer include:

. towing, impounding and storing motor vehicles;

. conducting lien sales and auctions of abandoned vehicles;

. recovering heavy-duty commercial vehicles; and

. transporting new and used vehicles and heavy construction equipment.

We derive revenue from towing, recovery and transport services based on
distance, time or fixed charges and from related impounding and storage fees.
If an impounded vehicle is not collected within a period prescribed by law
(typically between 30 and 90 days), we complete lien proceedings and sell the
vehicle at auction or to a scrap metal facility, depending on the value of the
vehicle. Depending on the jurisdiction, we either may keep all the proceeds
from the vehicle sales, or we may keep the proceeds up to the amount of the
towing and storage fees and pay the remainder to the municipality or law
enforcement agency. We provide these services in some cases under contracts
with municipalities or police, sheriff and highway patrol departments. In other
cases, we provide these services to municipalities or law enforcement agencies
without a long-term contract. The prices we charge for towing and storage of
impounded vehicles for municipalities or law enforcement agencies are limited
by contractual provisions or local regulation.

Our cost of revenue consists primarily of the following:

. salaries and benefits of drivers, dispatchers, supervisors and other
employees;

. fees charged by subcontractors;

. fuel;

. depreciation, repairs and maintenance;

. insurance;

. parts and supplies;

. other vehicle expenses; and

. equipment rentals.

Our selling, general and administrative expenses consist primarily of the
following:

. compensation and benefits to sales and administrative employees;

. fees for professional services;

. depreciation of administrative equipment and software;

. advertising; and

. other general office expenses.

In the case of law enforcement and private impound towing, we are paid either
by the owner of the impounded vehicle when the owner claims the vehicle or from
the proceeds of lien sales or auctions. With respect to our other operations,
we bill customers upon completion of our services, with payment due within 30
days. We recognize revenue as follows:

. towing revenue is recognized at the completion of each towing engagement;

. transport and recovery revenue is recognized upon the delivery of the
vehicle or equipment to its final destination; and

. revenue from auction sales is recorded when title to the vehicles has
been transferred.

We recognize expenses related to the generation of revenue as they are
incurred.

At the time of our initial public offering in May 1998, we acquired the seven
Founding Companies. Between May 6, 1998 and December 31, 1998, we acquired a
total of 34 additional motor vehicle and equipment towing, recovery and
transport service businesses for aggregate consideration of approximately $79.6
million in cash, 2,918,608 shares of Common Stock and the assumption of
approximately $23.2 million of indebtedness.

Due to the number of acquisitions we have completed to date, this management's
discussion and analysis addresses both our historical and pro forma results of
operations and financial condition. The historical discussion addresses our
actual results of operations as shown in our financial statements for the nine
months ended September 30, 1998 and the year ended December 31, 1997 (our first
year of operations). The historical results for the nine months ended September
30, 1998 include the results of all businesses we acquired prior to September
30, 1998 from their respective dates of acquisition.

The pro forma discussion addresses our results of operations for the nine
months ended September 30, 1998 and the year ended December 31, 1997, assuming
that we acquired the Founding Companies and the Selected Acquired Companies on
January 1, 1997, with certain pro forma adjustments as described in the notes
to the Unaudited Pro Forma Combined Financial Statements contained elsewhere in
this prospectus. The pro forma results of operations are not necessarily
indicative of the results we would have obtained had we actually acquired these
businesses on January 1, 1997 or of the Company's future results.

If all of the companies that we have acquired since inception were to be
included in our pro forma results of operations as if these acquisitions had
occurred on January 1, 1997, our net sales, net

income and diluted net income per share for the year ended December 31, 1997
and the nine months ended September 30, 1998 would have been:

YEAR ENDED NINE MONTHS
DECEMBER 31, ENDED
1997 SEPTEMBER 30, 1998
------------ ------------------
(IN THOUSANDS, EXCEPT PER SHARE
DATA)

Net revenue............................... $155,807 $140,726
======== ========
Net income................................ $ 6,344 $ 7,515
======== ========
Diluted net income per share.............. $ 0.53 $ 0.63
======== ========

All of the acquisitions that we have completed have been accounted for using
the purchase method of accounting. As a result, the amount by which the fair
value of the consideration we paid in the acquisitions exceeds the fair value
of the net assets we bought ($88.7 million), has been recorded as goodwill.
This goodwill will be amortized over its estimated useful life of 40 years as a
non-cash charge to operating income.

The results of operations of the Founding Companies and the Selected Acquired
Companies reflect different tax structures (S corporations or C corporations)
which have influenced the historical level of owner compensation. Gross profit
margins and selling, general and administrative expenses as a percentage of net
revenue may not be comparable among the various acquired companies. The owners
of such companies have agreed to certain reductions in their compensation and
benefits in connection with our acquisition of their businesses. The aggregate
amount of such reductions, had they been in effect in 1997, would have been
$6.7 million and the aggregate amount of such reductions, had they been in
effect during the nine months ended September 30, 1998, would have been $3.5
million. These reductions have been reflected as adjustments in the Unaudited
Pro Forma Combined Statement of Operations.

RESULTS OF OPERATIONS

PRO FORMA RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998

Net Revenue. Pro forma net revenue was $129.4 million for the nine months ended
September 30, 1998. Pro forma cost of revenue was $90.3 million for the nine
months ended September 30, 1998, or 69.8% of pro forma net revenue. The growth
in pro forma net revenue reflects the results of all businesses acquired since
their respective dates of acquisition. The most significant component of pro
forma cost of revenue was labor and subcontractor costs. Pro forma gross profit
was $39.1 million for the nine months ended September 30, 1998, or 30.2% of pro
forma net revenue.

Selling, General and Administrative Expenses. Pro forma selling, general and
administrative expenses were $20.2 million for the nine months ended September
30, 1998, or 15.6% of pro forma net revenue. The most significant component of
pro forma selling, general and administrative expenses was administrative
salaries and benefits. Pro forma amortization of goodwill was $3.0 million, or
2.3% of pro forma net revenue. Pro forma income from operations was $15.9
million, or 12.3% of pro forma net revenue, for the nine months ended September
30, 1998. Pro forma other expenses, net were $2.9 million, or 2.2% of pro forma
net revenue, for the nine months ended September 30, 1998.

Income Tax Expense. Pro forma income tax expense was $6.1 million, or 4.7% of
pro forma net revenue, for the nine months ended September 30, 1998.

Net Income. Pro forma net income was $7.0 million, or 5.4% of pro forma net
revenue, for the nine months ended September 30, 1998.

PRO FORMA RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997

Net Revenue. Pro forma net revenue was $143.3 million for the year ended
December 31, 1997. Pro forma cost of revenue was $101.1 million for the year
ended December 31, 1997, or 70.5% of pro forma net revenue. The most
significant component of pro forma cost of revenue was labor and subcontractor
costs. Pro forma gross profit was $42.3 million for the year ended December 31,
1997, or 29.5% of pro forma net revenue.

Selling, General and Administrative Expenses. Pro forma selling, general and
administrative expenses were $22.9 million for the year ended December 31,
1997, or 16.0% of pro forma net revenue. The most significant component of pro
forma selling, general and administrative expenses was administrative salaries
and benefits. Pro forma amortization of goodwill was $3.8 million, or 2.6% of
pro forma net revenue. Pro forma income from operations was $15.6 million, or
10.9% of pro forma net revenue, for the year ended December 31, 1997. Pro forma
other expenses, net were $3.8 million, or 2.7% of pro forma net revenue, for
the year ended December 31, 1997.

Income Tax Expense. Pro forma income tax expense was $5.9 million, or 4.1% of
pro forma net revenue, for the year ended December 31, 1997.

Net Income. Pro forma net income was $5.8 million, or 4.1% of pro forma net
revenue, for the year ended December 31, 1997.

HISTORICAL RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998

Net Revenue. Net revenue was $44.8 million for the nine months ended September
30, 1998. Cost of revenue was $32.1 million, or 71.5% of net revenue, for the
nine months ended September 30, 1998, consisting primarily of $17.0 million in
labor and subcontractor costs. This resulted in a gross profit of $12.8
million, or 28.5% of net revenue for the nine months ended September 30, 1998.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $7.6 million, or 16.9% of net revenue, for the
nine months ended September 30, 1998. These expenses consisted primarily of
$3.9 million in salary and wages and resulted in income from operations of $4.3
million, or 9.6% of net revenue. Other income (expense) was $89,000, or 0.2% of
net revenue, for the nine months ended September 30, 1998.

HISTORICAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997

No net revenue or cost of revenue was generated for the period July 25, 1997
(inception) through December 31, 1997. Selling, general and administrative
expenses were $174,000 for this period. No other income (expense) or tax
benefit were generated, resulting in a net loss of $174,000 for the period.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 1998, we had approximately:

. $2.3 million of cash and cash equivalents,

. $1.2 million of working capital, and

. $29.9 million of outstanding indebtedness.

In the nine months ended September 30, 1998, we (i) generated $4.8 million of
cash from operations, primarily due to increases in our accounts payable and
accrued expenses, (ii) used $98.4 million of cash in investing activities
(primarily relating to acquisitions of businesses) and (iii) used $95.8 million
of cash in financing activities. Our financing activities consisted of
reductions in long-term debt and capital lease obligations of $20.6 million.
These amounts were offset by cash proceeds from issuance of stock and debt, net
of $117.0 million.

We have a credit facility with a group of banks that enables us to borrow up to
$90.0 million on a revolving basis. The credit facility terminates in October
2001, at which time all outstanding indebtedness will be due. Borrowings under
the credit facility accrue interest, at our option, at either (a) the base rate
(which is equal to the greater of (i) the federal funds rate plus 0.5% and (ii)
Bank of America's reference rate), or (b) the eurodollar rate (which is equal
to Bank of America's reserve adjusted eurodollar rate plus a margin ranging
from 1.5% to 2.5% per annum).

Our obligations under the credit facility are guaranteed by each of our
subsidiaries. Our obligations and the obligations of our subsidiaries under the
credit facility and related guarantees are secured by substantially all of our
assets, the assets of our subsidiaries and the stock of our subsidiaries. Under
the credit facility we must comply with various loan covenants, including
maintenance of certain financial ratios, restrictions on additional
indebtedness, and restrictions on liens, guarantees, advances and dividends. In
addition, our ability to borrow under the credit facility is subject to
customary drawing conditions. The credit facility also requires prior approval
by the banks of certain acquisitions. As we borrow amounts under the credit
facility to finance capital expenditures, our interest expense will increase.
In connection with the credit facility, we issued to Bank of America a warrant
to purchase 117,789 shares of Common Stock at an exercise price of $13.00 per
share, subject to adjustment as provided in the Warrant Agreement. The warrant
expires on June 16, 2003.

On November 19, 1998, we entered into a Purchase Agreement with Charterhouse
providing for the issuance to Charterhouse of up to $75 million aggregate
principal amount of Debentures. The Debentures are convertible into our Common
Stock at any time, at Charterhouse's option, at an initial exercise price of
$15.00 per share, subject to adjustment as provided in the Purchase Agreement.
The conversion price exceeded the fair market value of the Common Stock on the
date of execution of the Purchase Agreement. Following five years after the
date of first issuance, the Debentures are redeemable at our option at 100% of
their principal amount if the average closing price of our Common Stock exceeds
150% of the conversion price over a thirty day period. We issued $43.5 million
aggregate principal amount of Debentures to Charterhouse at a first closing on
December 7, 1998. Issuance of the remaining $31.5 million aggregate principal
amount of Debentures to Charterhouse is subject to the approval of our
stockholders. The Debentures bear interest at a rate of 8% annually, payable in
kind for the first five years following issuance, and

thereafter either in kind or in cash, at our discretion. Pursuant to the
Purchase Agreement, we have agreed to pay Charterhouse a fee of 1% of the
principal amount of the Debentures issued at each closing. We have also agreed
to pay certain fees and expenses incurred by Charterhouse in connection with
the transaction.

Our accounting and financial reporting activities are centralized at our
headquarters in Albany, New York. In addition, we are in the process of
developing a national dispatch system for our transport operations. As of
September 30, 1998, we had spent approximately $3.2 million to install our
integrated information system. Although we expect that we will need to upgrade
and expand this system in the future, we cannot currently quantify the amount
that we will need to spend to do so.

The Founding Companies spent an aggregate of $2.4 million on purchases of
property and equipment, including towing, recovery and transport vehicles,
during the three months ended March 31, 1998. We spent $5.1 million on
purchases of property and equipment (including amounts spent in connection with
installation of the integrated information system) during the nine months ended
September 30, 1998. We expect to make capital expenditures of an additional
$3.9 million during the remainder of 1998. We expect to fund these expenditures
from earnings and related cash flow.

Between May 6, 1998, when we completed our initial public offering and the
acquisitions of the Founding Companies and December 31, 1998, we acquired 34
other motor vehicle and equipment towing, recovery and transport businesses for
aggregate consideration of $79.6 million in cash, 2,918,608 shares of Common
Stock and the assumption of approximately $23.2 million of indebtedness. We
funded the cash portion of these acquisitions through proceeds from the initial
public offering and long term borrowings under our credit facility. In
addition, we have entered into a definitive agreement to acquire MPG Transco,
Ltd., for aggregate consideration of approximately $29.5 million, consisting of
approximately $10.4 million in cash, 996,351 shares of Common Stock and the
assumption of approximately $4.4 million of indebtedness.

We intend to continue to pursue acquisition opportunities and to expand through
internal growth. We expect to fund future acquisitions and our ongoing
liquidity needs through the issuance of additional Common Stock, borrowings,
including use of amounts available under our credit facility, and cash flow
from operations.

YEAR 2000 COMPLIANCE

There has been a great deal of public discussion regarding the possibilities of
a "year 2000 problem." The issue arises because many existing computer programs
only use the last two digits to refer to a year and therefore do not properly
recognize that a year that ends with "00" (i.e. "2000") should follow the year
that ends with "99" (i.e. "1999"). If not corrected, it is possible that many
computer applications will fail or create errors. No one knows the extent of
the potential impact of the year 2000 problem generally.

We have taken a variety of steps in an effort to assess our readiness for this
year 2000 situation. We have considered whether we will have a year 2000
problem with regard to:

National Operations. We have recently centralized our accounting and financial
reporting activities at our headquarters in Albany, New York. The software that
we have implemented in this regard is

year 2000 compliant. In addition, in order to make our transport operations
more efficient, we are in the process of developing a national dispatch system
to replace the local systems that are currently in use. The proposed national
transport system is year 2000 compliant and we expect that it will be installed
prior to January 1, 2000. If an unforseeable event were to make us unable to
install the national transport system by 2000, we would need to rely on our
local transport dispatch systems, which we believe may not be year 2000
compliant. If the local transport systems become inoperable, we expect that we
will be able to manually perform such functions, although not as efficiently.
We cannot now predict the likelihood, extent or impact of such effects on our
results of operations or financial condition. Our payroll operations are
managed by a national payroll processor which has informed us that they are
year 2000 compliant.

Local Operations. Certain of the operating functions of some of the companies
we have acquired are computerized. We have reviewed these systems and
determined that some are not year 2000 compliant. In order to make our
operations more efficient (and to address year 2000 issues) we intend to
replace all of the local operating systems with standardized operational
software which will be year 2000 compliant. We expect this replacement to be
completed by January 1, 2000. In the event that we are not able to install new
software, we would need to rely on our existing systems. While the computerized
systems make us more efficient, if they become inoperable, we believe we can
manually perform all necessary functions, although not as efficiently. We
cannot now predict the likelihood, extent or impact of such effects on our
results of operations or financial condition.

Vendors and Customers. We are currently developing a plan to review with our
significant vendors, customers and financial institutions their individual year
2000 compliance. Such a review has not yet been formally commenced. As a
result, it is difficult to predict the impact that year 2000 problems at our
vendors, customers or financial institutions will have on us.

As of September 30, 1998, we had spent approximately $3.2 million to install
our integrated information system. We are not now able to estimate the costs we
will incur to fully install our national transport system or to replace our
local operating systems. Other than ensuring that our centralized systems are
year 2000 compliant, given that our operations and our interactions with our
vendors and customers have historically been conducted in a substantially
manual mode, we have not developed a contingency plan to guide our responses to
year 2000 problems when they may arise. We intend to continue to examine the
year 2000 issue as it potentially impacts us and will develop a contingency
plan if we believe one is necessary. We cannot predict the likelihood that year
2000 problems will cause a significant disruption in the economy as a whole.

BUSINESS

We were formed in July 1997 to become a leading national provider of motor
vehicle and equipment towing, recovery and transport services. At the time of
our initial public offering in May 1998, we acquired the seven Founding
Companies. Between May 6, 1998 and December 31, 1998, we acquired a total of 34
additional businesses. Among the companies we acquired were E&R, which we
acquired on August 21, 1998 for an aggregate purchase price of approximately
$26.0 million, consisting of approximately $22.8 million in cash and 173,498
shares of Common Stock, and Pilot, which we acquired on December 9, 1998 for
approximately $25.0 million, consisting of approximately $10.6 million in cash
and 1.0 million shares of Common Stock. We believe that we are now one of the
largest providers of motor vehicle and equipment towing, recovery and transport
services in the United States.

We offer a broad range of towing, recovery, transport and related services,
including:

. towing, impounding and storing motor vehicles;

. conducting lien sales and auctions of abandoned vehicles;

. recovering heavy-duty commercial vehicles; and

. transporting new and used vehicles and heavy construction equipment.

Our customers include:

. commercial entities, such as automobile leasing companies and insurance
companies;

. automobile auction companies;

. automobile dealers;

. repair shops and fleet operators;

. municipalities;

. law enforcement agencies such as police, sheriff and highway patrol
departments; and

. individual motorists.

THE INDUSTRY

We estimate that motor vehicle and equipment towing and transport services
generated net revenue in excess of $14 billion in the United States in 1997.
Based on available data, we believe that there are over 36,000 motor vehicle
and equipment towing and transport businesses in the United States, most of
which are small, local and owner-operated, with limited access to capital for
modernization and expansion.

We believe that the demand for towing, recovery and transport services has been
impacted by the following factors:

. an increase in the number and average age of registered vehicles, which
increases the demand for all types of towing, recovery and transport
services;

. a rise in government mandates (and increased enforcement of such
mandates) against unlicensed or uninsured drivers and unregistered
vehicles, which results in higher demand for towing and impounding
services;

. the growing popularity of leasing (which, according to the National
Automobile Dealers Association, has risen from 5% of all new auto sales in
1985 to 30% in 1996) which increases the demand for transport services to
move off-lease vehicles to auctions and dealers for sale; and

. the increasing mobility of the United States workforce, which increases
demand for automobile transport in connection with career-related moves.

STRATEGY

We believe there are significant opportunities for a national provider of
towing, recovery and transport services with high quality service to increase
revenue and profitability by expanding its scope of services and customer base,
achieving operating efficiencies and expanding through acquisitions. As certain
areas within the automobile industry experience growth and consolidation, such
as new and used automobile dealerships, rental car companies and automobile
auction companies, we believe that the demand will increase for a provider of
towing, recovery and transport services with the resources and geographic
coverage to serve the expanding needs of these businesses. We further believe
that effective implementation of our operating and acquisition strategies as
described below will position us to secure operating and competitive advantages
over smaller competitors.

We also believe that the fragmented nature of the towing, recovery and
transport markets presents an attractive opportunity for consolidation. Our
management team includes executives with experience in implementing acquisition
programs and effectively integrating acquired businesses as well as local
managers who have significant contacts and experience in towing, recovery and
transport services. We believe that this combination and the fragmented nature
of the towing, recovery and transport markets provides us with the capability
and opportunity to implement an effective consolidation strategy.

OPERATING STRATEGY

. Provide High Quality Service. We believe that timely, professional and
dependable service is the primary generator of repeat towing, recovery and
transport service business. We intend to continue to implement proven
practices throughout our operations in areas such as dispatching technology,
driver training and professionalism, preventive maintenance and safety. By
doing this we intend to continue to offer high quality service to all of our
customers.

. Expand Scope of Services and Customer Base. We intend to continue to expand
the scope of our services by introducing certain capabilities of businesses we
acquire into other markets where we believe such services can be successfully
marketed. For example, we intend to capitalize on our lien sale and auction
experience by using such practices at selected acquired operations that have
not offered such services in the past. We believe that our size and financial
and other resources will permit us to attract customers and contracts that
require greater towing, recovery, transporting and storage capabilities than
those possessed by local owner-operators. We intend to utilize our geographic
diversity to pursue additional business from new and existing customers that
operate on a regional or national basis, such as leasing companies, insurance
companies and automobile auction companies. We also will seek to develop
additional capabilities and services to complement our existing operations.
For example, as a key part of our development of a national network of
transport operations, we intend to establish regional marshalling yards, which
will enable us to collect vehicles in one location and allocate them to
particular transport vehicles and routes to maximize asset utilization.

. Achieve Operating Efficiencies. We will seek to achieve operating
efficiencies though improved asset utilization by implementing a "hub-and-
spoke" strategy within identified towing markets, with a centralized "hub" for
management, dispatch and maintenance operations that supports multiple
satellite truck and impound yards. We believe that this strategy will allow us
to provide timely service throughout a particular market, while also enabling
us to consolidate certain duplicative dispatch systems and facilities. By
doing this we expect to spread certain fixed costs over a larger vehicle
fleet. We also expect to continue to realize cost savings by continuing to
centralize certain administrative functions at our headquarters in Albany, New
York. Such functions include insurance, employee benefits, accounting and risk
management. We also intend to use our purchasing power to seek improved
pricing in areas such as fuel, vehicles and parts.

. Maintain Local Expertise. We anticipate that management of companies that we
have acquired and companies that we acquire in the future will continue to
maintain local control of their daily operations. We believe that this
strategy allows us to take advantage of the local and regional market
knowledge, name recognition and customer relationships possessed by each
business we acquire.

ACQUISITION STRATEGY

. Enter New Geographic Markets. As part of our "hub-and-spoke" operating
strategy, we intend to acquire established, high-quality companies in markets
where we can establish a leading market position to serve as our "hubs" into
which additional operations may be consolidated. We also intend to acquire
transport businesses with complementary transport routes and capabilities in
markets across North America in order to create an integrated national
transport network. We further believe that by virtue of our regional towing
and storage operations we will accumulate many vehicles that need to be
delivered to auctions, repair shops or scrap metal facilities. As a result,
we expect these operations will feed our transport services.

. Expand Within Existing Geographic Markets. Once we have established a core
presence in a market, we will seek to strengthen our market position by
buying other large companies that offer similar services. We will also pursue
"tuck-in" acquisitions of smaller companies, whose

businesses can be integrated into our operations, thereby using our existing
infrastructure over a broader vehicle fleet and revenue base. In addition,
we may seek to vertically integrate our operations by buying businesses
which offer complementary services that we do not currently offer. In cases
where acquired companies have developed local and regional goodwill and
customer relationships, we will continue to maintain the existing business
names and identities.

We believe that businesses we seek to buy will regard us as an attractive
acquirer because of the following factors:

. our strategy for creating a national, comprehensive and professionally
managed towing, recovery and transport service company;
. our decentralized operating strategy, which emphasizes an ongoing role
for owners, management and key personnel of the businesses we buy, as
well as meaningful equity positions for these people which will enable
them to participate in our growth;
. our visibility and access to financial resources as a public company; and
. the potential for increasing the profitability of the businesses we buy
as a result of our centralization of administrative functions, access to
increased marketing resources and purchasing economies.

As consideration for our acquisitions, we intend to continue to use a
combination of Common Stock, cash and debt. The consideration for each future
acquisition will vary on a case-by-case basis, with the major factors in
establishing the purchase price being the historical operating results and
future prospects of the business to be bought and the ability of that business
to complement the services we offer.

OPERATIONS AND SERVICES PROVIDED

We provide a broad range of towing, recovery and transport services for a
diverse group of commercial, governmental and individual customers. Towing,
recovery and transport services typically begin with a telephone call
requesting assistance or transport. The call may come from a law enforcement
officer, a commercial fleet dispatcher, a private business or an individual.
The dispatcher records the relevant information regarding the vehicle to be
towed, recovered or transported, checks the location and status of our vehicle
fleet (typically using a computerized positioning system) and assigns the job
to a particular vehicle. The driver collects the vehicle and tows or
transports it to one of several locations, depending on the nature of the
customer.

Municipality and Law Enforcement Agency Towing. We provide towing services to
various municipalities and law enforcement agencies. In this market, vehicles
are typically towed to one of our facilities where the vehicle is impounded
and placed in storage. The vehicle remains in storage until its owner pays us
the towing fee (which is typically based on an hourly charge) and any daily
storage fees, and pays any fines due to the municipality or law enforcement
agency. If the vehicle is not claimed within a period prescribed by law
(typically between 30 and 90 days), we complete lien proceedings and sell the
vehicle at auction or to a scrap metal facility, depending on the value of the
vehicle. Depending on the jurisdiction, we either may keep all of the proceeds
from vehicle sales, or keep proceeds up to the amount of towing and storage
fees and pay the remainder to the municipality or law enforcement agency. We
provide services in some cases under contracts with municipalities or

police, sheriff and highway patrol departments, typically for terms of five
years or less. Such contracts often may be terminated for material breach and
are typically subject to competitive bidding upon expiration. In other cases,
we provide these services to municipalities or law enforcement agencies without
a long-term contract. Whether pursuant to a contract or an ongoing
relationship, we generally provide these services for a designated geographic
area, which may be shared with one or more other companies.

New and Used Automobile Transport. We provide new and used automobile transport
services to leasing companies, automobile manufacturers, automobile dealers,
automobile auction companies, long-distance transporters, brokers and
individuals. We typically provide services as needed by a customer and charge
the customer according to pre-set rates based on mileage. We transport large
numbers of vehicles from automobile auctions (where off-lease vehicles are
sold) to individual dealers. In addition, we provide transport services for
dealers who transfer new cars from one region to another and local collection
and delivery support to long-haul automobile transporters.

Insurance Salvage Towing. We provide insurance salvage towing services to
insurance companies and automobile auction companies for a per-vehicle fee
based on the towing distance. This business involves secondary towing, since
the vehicles involved typically have already been towed to a storage facility.
For example, after an accident, a damaged or destroyed vehicle is usually towed
to a garage or impound yard. Our insurance salvage towing operations collect
these towed vehicles and deliver them to repair shops, automobile auction
companies or scrap metal facilities as directed by the customer.

Private Impound Towing. We provide impound towing services to private
customers, such as shopping centers, retailers and hotels, which engage us to
tow vehicles that are parked illegally on their property. As in law enforcement
agency towing, we generate revenues through the collection of towing and
storage fees from vehicle owners, and from the sale of vehicles that are not
claimed.

Commercial Road Service. We provide road services to a broad range of
commercial customers, including automobile dealers and repair shops. We
typically charge a flat fee and a mileage premium for these towing services.
Commercial road services also include towing and recovery of heavy-duty trucks,
recreational vehicles, buses and other large vehicles, typically for commercial
fleet operators. We charge an hourly rate based on the towing vehicle used for
these specialized services.

Heavy Equipment Transport. We provide heavy equipment transport services to
construction companies, contractors, municipalities and equipment leasing
companies. We base our service fees on the vehicle used and the distance
traveled.

Consumer Road Service. We also tow disabled vehicles for individual motorists
and national motor clubs. We generally tow such vehicles to repair facilities
for a flat fee paid by either the individual motorist or the motor club.

SALES AND MARKETING; CUSTOMERS

We believe that our commitment to consistent high quality service has provided
long-term relationships with many existing customers. We believe that this
positions us to expand market penetration through the use of enhanced sales and
marketing efforts. Prior to joining our company,

the companies we have acquired have largely focused on building and maintaining
personal relationships with customers, while also using limited print
advertising in newspapers and industry periodicals. We intend to focus our
marketing efforts on large governmental and commercial accounts, including
leasing companies, insurance companies and law enforcement agencies. We also
intend to augment the capabilities and contacts of the owners and general
managers of the businesses we have bought with a sales program designed to
identify significant target customers and to expand working relationships with
existing customers.

Although we generally have a diverse customer base, one customer, General
Motors Corporation ("GM"), accounted for approximately 11% of our pro forma
combined net revenue in 1997 and approximately 13% of our pro forma combined
net revenue in the nine months ended September 30, 1998. We expect that GM will
continue to account for a significant percentage of our revenue for the
foreseeable future. The loss of a significant customer, including GM, could
have a material adverse effect on our business, financial condition and results
of operations.

DISPATCH AND INFORMATION SYSTEMS

Each of the companies we have acquired operates a local dispatch system to
assign individual towing, recovery and transport vehicles to particular service
calls. Some of these companies use computerized positioning systems which
identify and track vehicle location and status. This decreases response times
and increases asset use. We are in the process of implementing a national
dispatch system to support our transport operations and intend to explore the
possibility of building regional towing dispatch systems in identified markets
where we have established a leading market position.

Our accounting and financial reporting activities are centralized at our
headquarters in Albany, New York. We anticipate that we will need to upgrade
and expand our information technology systems on an ongoing basis as we expand
our operations and complete acquisitions.

For a discussion of year 2000 issues as they relate to our systems and our
operations, you should read "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Year 2000 Compliance."

COMPETITION

The market for towing, recovery and transport services is extremely
competitive. Competition is based primarily on quality, service, timeliness,
price and geographic proximity. We compete with certain large companies on a
regional and local basis, some of which may have greater financial and
marketing resources than we have. We also compete with thousands of smaller
local companies, which may have lower overhead cost structures than we have and
may, therefore, be able to provide their services at lower rates than we can.

We may also face competition for businesses we seek to buy from companies which
are attempting to consolidate towing, recovery or transport service providers.
Some of our competitors may be better

positioned than we are to finance acquisitions, to pay higher prices for the
businesses we pursue or to finance their internal operations.

We believe that we are able to compete effectively because of our high quality
service, geographic scope, broad range of services offered, experienced
management and operational economies of scale. We seek to differentiate
ourselves from our competition in terms of service and quality by investing in
training, systems and equipment and by offering a broad range of products and
services. We also seek to differentiate ourselves in terms of timeliness and
geographic proximity by establishing facilities and vehicles in targeted
geographic markets so that we are positioned to provide timely responses to
service calls.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

Towing, recovery and transport services are subject to various federal, state
and local laws and regulations regarding equipment, driver certification,
training and recordkeeping, and workplace safety. Our vehicles and facilities
are subject to periodic inspection by the United States Department of
Transportation and similar state and local agencies. Our failure to comply with
such laws and regulations could subject us to substantial fines and could lead
to the closure of operations that are not in compliance. In addition, certain
government contracting laws and regulations may affect our ability to acquire
complementary businesses in a given city or county. Companies providing towing,
recovery and transport services are required to have numerous federal, sate and
local licenses and permits. When we buy such companies, we must transfer or
apply for such licenses and permits in order to conduct the business. Any
failure to obtain such licenses and permits or any delay in our receipt of such
licenses and permits could have a material adverse effect on our business,
financial condition and results of operations.

Our operations are subject to a number of federal, state and local laws and
regulations relating to the storage of petroleum products, hazardous materials
and impounded vehicles, as well as safety regulations relating to the upkeep
and maintenance of our vehicles. In particular, our operations are subject to
federal, state and local laws and regulations governing leakage from salvage
vehicles, waste disposal, the handling of hazardous substances, environmental
protection, remediation, workplace exposure and other matters. We believe that
we are in substantial compliance with all such laws and regulations. We do not
currently expect to spend any substantial amounts in the foreseeable future in
order to meet current environmental or workplace health and safety
requirements. It is possible that an environmental claim could be made against
us or that we could be identified by the Environmental Protection Agency, a
state agency or one or more third parties as a potentially responsible party.
If we are subject to such a claim or are so identified, we may incur
substantial investigation, legal and remediation costs. Such costs could have a
material adverse effect on our business, financial condition and results of
operations.

SAFETY AND TRAINING

We use a variety of programs to improve safety and promote an accident-free
environment. These programs include regular driver training and certification,
drug testing and safety bonuses. These programs are designed to ensure that all
employees comply with our safety standards, our insurance

carriers' safety standards and federal, state and local laws and regulations.
We believe that our emphasis on safety and training will assist us in
attracting and retaining quality employees.

FACILITIES AND VEHICLES

As of December 31, 1998, we operated approximately 59 facilities to (i) garage,
repair and maintain towing, recovery and transport vehicles, (ii) impound and
store towed vehicles and (iii) conduct lien sales and auctions. All of our
facilities are leased from other parties. Many of our facilities can be used at
higher capacities, if necessary. We will seek to consolidate facilities and
vehicle storage capacity in the future where appropriate.

As of December 31, 1998, we operated a fleet of approximately 1,100 towing,
recovery and transport vehicles, which we believe are generally well-maintained
and adequate for our current operations.

RISK MANAGEMENT, INSURANCE AND LITIGATION

Our primary liability risks include bodily injury, property damage, workers'
compensation claims and, potentially, environmental and land use claims. We
maintain insurance on a company-wide basis, subject to customary deductibles.
Although, from time to time, we are a party to litigation arising in the
ordinary course of business (most of which involves claims for personal injury
or property damage incurred in connection with our operations) we are not
currently involved in any litigation that we believe will have a material
adverse effect on our business, financial condition or results of operations.

EMPLOYEES

As of December 31, 1998, we had approximately 1,750 employees and used
approximately 400 independent contractors. None of our employees are members of
unions.

MANAGEMENT

DIRECTORS AND OFFICERS

The following table sets forth the name, age and position of our directors and
officers:

NAME AGE POSITION

Edward T. Sheehan................ 56 Chairman of the Board, Chief Executive Officer and Secretary
Allan D. Pass.................... 49 President and Chief Operating Officer
Donald J. Marr................... 40 Senior Vice President and Chief Financial Officer
Robert J. Adams, Jr. ............ 36 Senior Vice President and Chief Acquisition Officer
Edward W. Morawski............... 50 Vice President and Director
Robert L. Berner, III............ 37 Director
Merril M. Halpern................ 64 Director
Grace M. Hawkins................. 53 Director
Richard A. Molyneux.............. 48 Director
Donald F. Moorehead, Jr.......... 48 Director
Todd Q. Smart.................... 33 Director
Mark J. Henninger................ 41 Director

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

Edward T. Sheehan has served as our Chairman of the Board and Chief Executive
Officer since October 1997. Mr. Sheehan was President of United Waste Systems,
Inc. ("United") from December 1992 to August 1997, and Chief Operating Officer
of United from 1994 to August 1997, when United was sold to USA Waste Services,
Inc. ("USA Waste"). He was Senior Vice President and Chief Financial Officer of
Clean Harbors, Inc., a publicly-held environmental services company, from
September 1990 to April 1992. From 1966 to 1990, Mr. Sheehan held several
financial and operating positions with General Electric Company ("GE"),
including Manager--Finance for GE's power generation service businesses,
factory automation operations and Europe, Africa and Middle East Divisions. Mr.
Sheehan currently serves as a director of Gundle/SLT Environmental, Inc., an
environmental products company.

Allan D. Pass, Ph.D has served as our President and Chief Operating Officer
since September 1998. From January 1998 until September 1998, he served as our
Senior Vice President and Chief Operating Officer. From 1986 until February
1998, Dr. Pass served as the Chief Executive Officer and President of National
Behavioral Science Consultants, Inc., a consulting firm specializing in
innovative productivity and profitability enhancement and human resource
programs. From September 1991 until June 1995, Dr. Pass also served as a
Corporate Vice President for Chambers Development Corporation.

Donald J. Marr has served as our Senior Vice President and Chief Financial
Officer since January 1998. From 1986 through 1997, he held a series of
management positions with KeyCorp, most recently as Senior Vice President,
Planning and Analysis. From January 1984 to October 1986, he held various
positions at the accounting firm of Coopers & Lybrand. Mr. Marr is a certified
public accountant.

Robert J. Adams, Jr. has served as our Senior Vice President and Chief
Acquisition Officer since June 1998. From February 1998 to May 1998, Mr. Adams
provided acquisition-related consulting services to us. From April 1996 through
January 31, 1998, Mr. Adams served as a Manager of Corporate Development for
Republic Industries, Inc. From October 1995 through March 1996, Mr. Adams was
employed by RJA, Inc. and from June 1990 through September 1995 he was employed
by Waste Management, Inc. as an operations manager.

Edward W. Morawski has served as our Vice President and a director since May
1998. Mr. Morawski founded Northland, one of the Founding Companies, in 1977
and served as its President from inception until we acquired Northland in May
1998.

Robert L. Berner, III has been a director since December 1998. Mr. Berner is a
Managing Director of Charterhouse Group International, Inc. ("Charterhouse
International") and a member of its Investment Committee. Mr. Berner joined
Charterhouse International in January 1997. From 1986 through December 1996, he
was a Principal in the Merger and Acquisitions Department at Morgan Stanley &
Co. Mr. Berner is on the Board of Directors of Cellu-Tissue Holdings, Inc., a
manufacturer of specialty paper, United Design Inc., a manufacturer of giftware
and home accessories and Wham-O, Inc., a marketer of classic toys.

Merril M. Halpern has been a director since December 1998. Mr. Halpern founded
Charterhouse International in 1973 and serves as its Chairman of the Board and
Chief Executive Officer. Mr. Halpern is also a director of Microwave Power
Devices, Inc., a manufacturer of highly linear power amplifiers primarily for
the wireless telecommunications market; NetCare Health Systems, Inc., an
integrated health provider network; Mennen Medical Ltd., a manufacturer of
medical equipment; Cellu-Tissue Holdings, Inc., a manufacturer of specialty
paper; and Sage Networks, Inc., which consolidates businesses serving the web-
hosting segment of the Internet.

Grace M. Hawkins has been a director since May 1998. Since 1991, Ms. Hawkins
has been President of Lotus Publications, Inc., a publishing company
specializing in marketing for the transportation industry. From 1985 to 1991,
she served as President of T.T. Publications, Inc., a magazine publisher. She
has authored numerous articles relating to the towing industry.

Richard A. Molyneux has been a director since June 1998. Since March 1998, Mr.
Molyneux has been a partner of MCT L.L.C. From 1975 through 1997, Mr. Molyneux
served in various executive positions with KeyBank, National Association, and
its affiliates, most recently as Chief Executive Officer.

Donald F. Moorehead, Jr. has been a director since May 1998. Since August 1997,
Mr. Moorehead has served as a consultant to USA Waste (now known as Waste
Management, Inc.), the largest solid waste management company in the United
States. Since June 1, 1998, Mr. Moorehead has also served as Chairman and Chief
Executive Officer of EarthCare Co., a liquid waste management company. From
June 1995 to August 1997, he served as Vice Chairman and Chief Development
Officer of USA Waste. From October 1990 to June 1995, he served as USA Waste's
Chairman, and from October 1990 to May 1994, he also served as its Chief
Executive Officer. From 1985 to 1990, Mr. Moorehead was Chairman and Chief
Executive Officer of Mid-American Waste Services, Inc. Mr. Moorehead currently
serves as a director of FYI, Inc., a document reproduction and storage company,
and EarthCare Co. Group, Inc.

Todd Q. Smart has been a director since May 1998. Mr. Smart also provides us
with acquisition-related consulting services. In 1987, Mr. Smart founded
Absolute Towing and Transporting, Inc. ("Absolute"), one of the Founding
Companies, and served as its President from inception until we acquired
Absolute in May 1998. Since June 1998, Mr. Smart has operated an official
police garage in the City of Los Angeles.

Mark J. Henninger has been a director since August 14, 1998. Mr. Henninger also
provides us with acquisition-related consulting services. Mr. Henninger founded
Keystone in 1991 and served as its President from inception until we acquired
Keystone in August 1998.

In connection with the purchase by Charterhouse of $43.5 million aggregate
principal amount of Debentures in December 1998, the Board of Directors was
expanded from eight members to ten members and Messrs. Berner and Halpern, both
designees of Charterhouse, were appointed to fill the resulting vacancies on
the Board. If our stockholders approve the issuance of an additional $31.5
million aggregate principal amount of Debentures to Charterhouse, the Board of
Directors will be expanded to eleven members and an additional Charterhouse
designee will be added to the Board. Pursuant to the Purchase Agreement with
Charterhouse, we agreed that we will not take any action that would require
stockholder approval without the approval of a majority of the Charterhouse
designees to the Board who are present at the relevant Board meeting.

COMMITTEES OF THE BOARD OF DIRECTORS

Our Board of Directors has an Audit Committee and a Compensation Committee. The
Audit Committee: (i) makes recommendations to the Board of Directors with
respect to the independent auditors who conduct the annual examination of our
accounts; (ii) reviews the scope of the annual audit and meets periodically
with our independent auditors to review their findings and recommendations;
(iii) approves major accounting policies or changes thereto; and (iv)
periodically reviews our principal internal financial controls. The
Compensation Committee reviews the compensation of our executive officers and
makes recommendations regarding such compensation to the Board of Directors.

COMPENSATION OF DIRECTORS

Certain directors who are not employees or consultants of our company are
entitled to receive (i) upon their election as a director and on the date of
each annual meeting of stockholders thereafter a grant of options to purchase
20,000 shares of Common Stock at the fair market value on the date of grant and
(ii) cash compensation of approximately $2,500 for each meeting attended.
Directors who are our employees or consultants of our company do not receive
additional compensation for serving as directors. All directors are reimbursed
for expenses incurred in attending meetings of the Board or its committees.

EXECUTIVE COMPENSATION; EMPLOYMENT AGREEMENTS; COVENANTS-NOT-TO-COMPETE

We were incorporated in July 1997 and conducted no operations during 1997 other
than activities related to the acquisitions of the Founding Companies and our
initial public offering. We did not pay any of our executive officers
compensation during 1997. We anticipate that during 1998 our most highly
compensated executive officers will be Messrs. Sheehan, Marr and Adams and Dr.
Pass.

We have entered into employment agreements with each of these executive
officers. Pursuant to such agreements, each executive is entitled to receive a
base salary and will be eligible to receive a performance bonus as determined
by the Board of Directors. The annual base salaries of the executives are as
follows: Mr. Sheehan--$200,000; Dr. Pass--$150,000; Mr. Adams--$140,000; and

Mr. Marr--$75,000. Each employment agreement has an initial term of three years
(beginning in February 1998 in the case of Mr. Sheehan, June 1998 in the case
of Mr. Adams and January 1998 in the case of Dr. Pass and Mr. Marr), unless
terminated by either party prior to the end of such initial term. Each
agreement also may be terminated upon the death or disability of the executive
or by us for "cause" upon notice to the executive. The employment agreements
provide that if the executive is terminated without cause, he will be paid a
severance amount equal to his base salary for the following periods: Mr.
Sheehan--six months; Dr. Pass--two years; Mr. Marr--one year; and Mr. Adams--
one year. For purposes of such severance payments, a voluntary termination of
employment by Mr. Marr or Dr. Pass within six months after a termination of
employment of Mr. Sheehan for any reason constitutes a termination without
cause. Mr. Sheehan's employment agreement contains a covenant not to solicit
our employees or customers for a period of one year after termination of his
employment. The employment agreements of each of the other executive officers
contain covenants not to compete and covenants not to solicit our employees or
customers for a period of one year following termination of the agreements.

1998 STOCK OPTION PLAN

Our 1998 Stock Option Plan is intended to provide our directors, officers,
employees and consultants with an opportunity to invest in our Common Stock and
to advance our interests and the interests of our stockholders by enabling us
to attract and retain qualified personnel. The 1998 Stock Option Plan provides
for the grant of incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended, and nonqualified stock options.
The maximum number of shares of Common Stock that may be subject to options
granted under the 1998 Stock Option Plan may not exceed, in the aggregate,
1,278,885 shares. Shares of Common Stock that are attributable to grants that
have expired or been terminated, cancelled or forfeited are available for
issuance in connection with future grants. The Compensation Committee
administers the 1998 Stock Option Plan, makes awards of stock options to
executive officers and establishes the terms and conditions of such awards.
The authority to make awards of stock options to non-executives, and to
establish the terms and conditions of such awards, has been delegated to our
Chief Executive Officer.

In September 1998, we adopted a Non-Qualified Stock Option Plan pursuant to
which non-qualified stock options may be granted to our employees and
consultants who are neither directors nor officers. The maximum number of
shares of Common Stock that may be subject to options granted under the Non-
Qualified Stock Option Plan may not exceed, in the aggregate, 500,000 shares.
Shares of Common Stock that are attributable to grants that have expired or
been terminated, cancelled or forfeited are available for issuance in
connection with future grants. The Chief Executive Officer administers the Non-
Qualified Stock Option Plan, selects the individuals who receive awards and
establishes the terms and conditions of such awards.

Options to purchase a total of 672,050 shares of Common Stock with a weighted
average exercise price of $13.58 per share had been granted to our directors,
officers, and employees as of September 30, 1998. Of these options, we granted
options exercisable into: 40,000 shares to Mr. Sheehan, 115,000 shares to Dr.
Pass; 85,000 shares to Mr. Marr; 70,000 shares to Mr. Adams; and 20,000 shares
to each of Mr. Molyneux, Mr. Moorehead and Ms. Hawkins. Each option we have
granted was granted at the fair market value on the date of grant, vests at the
rate of 33 1/3% per year, commencing on the first anniversary of the date of
grant, and will expire ten years after the date of grant.

CERTAIN TRANSACTIONS

In November 1997, we sold 744,000 shares of Common Stock to Mr. Sheehan for
cash consideration of $20,000. Mr. Sheehan bought the shares pursuant to an
agreement which provides us with a right to repurchase them, at our discretion,
at the price Mr. Sheehan paid. This right may only be exercised in the event
that Mr. Sheehan voluntarily terminates his employment or is discharged for
"cause." The repurchase right expired with respect to 372,000 shares upon our
initial public offering, and will expire with respect to the remaining 372,000
shares in August 1999.

In January 1998, we sold an aggregate of 218,736 shares of Common Stock to
private investors for cash consideration of $735,000. Mr. Moorehead purchased
29,760 of these shares for $100,000. All of these investors, including Mr.
Moorehead, have agreed not to sell any shares they bought for the period ending
one year from the date of our initial public offering.

Each of Messrs. Henninger, Morawski and Smart (all of whom are members of our
Board of Directors) is a former owner of a business we acquired. The following
table sets forth the consideration we paid and the indebtedness we assumed when
we bought Northland (which was formerly owned by Mr. Morawski), Absolute (which
was formerly owned by Mr. Smart) and Keystone (which was formerly owned by Mr.
Henninger):

SHARES OF TOTAL
NAME CASH COMMON STOCK INDEBTEDNESS
(DOLLARS IN THOUSANDS)

Northland................................. $8,307 692,277 $1,433
Absolute.................................. 3,567 297,267 651
Keystone.................................. 4,531 377,624 712

In addition, we must make earn-out payments for each of the years 1998 through
2002 to each of Messrs. Morawski, Smart and Henninger, if the company he owned
achieves target levels of net revenue. The target level of net revenue that
must be reached in 1998 is generally 110% of the 1997 net revenue of the
particular company. The target net revenue for the years 1999 through 2002 is
110% of the greater of (i) the prior year's actual net revenue or (ii) target
net revenue. If the target net revenue is achieved for a particular year, we
must make an initial payment equal to 5% of the excess of actual net revenue
over the target level. In addition, once the target level of net revenue for a
particular year is met, we must make subsequent and equal payments for each
year through 2002, but only if the actual net revenue for the respective
subsequent year exceeds the actual net revenue for the year that the earn-out
target was first achieved. Any required earn-out payments will be made in the
form of Common Stock.

Prior to our acquisition of Absolute, Absolute distributed to Mr. Smart
personal assets not included in the transaction with a book value of $65,000.
Prior to our acquisition of Keystone, Keystone made a cash distribution of less
than $150,000 to Mr. Henninger to pay taxes on S corporation earnings. In
addition, Keystone distributed to Mr. Henninger personal assets not included in
the transaction with a book value of $56,000.

Pursuant to the agreements entered into in connection with our purchases of
Northland, Absolute and Keystone, Messrs. Morawski, Smart and Henninger have
agreed not to compete with us for a period of five years from the date of our
initial public offering in defined business and geographic areas.

In connection with our purchases of Absolute and Keystone, we entered into
consulting agreements with Mr. Smart and Mr. Henninger. Pursuant to these
agreements, Mr. Smart and Mr. Henninger are each entitled to receive a
consulting fee equal to two percent of the gross revenue of each company that
they assist us in buying, with the fee to be based on the acquired company's
gross revenue for the twelve months immediately preceding our purchase of it.
Each consulting agreement is for a term of three years. From February 1998
until June 1998 (when he became our Senior Vice President and Chief Acquisition
Officer), Mr. Adams was a party to a consulting agreement with us. Mr. Adams'
agreement contained terms substantially similar to our consulting agreements
with Messrs. Henninger and Smart.

In addition, in connection with our purchase of Northland, we entered into an
employment agreement with Mr. Morawski pursuant to which he serves as one of
our Vice Presidents for a term of three years, with an annual base salary of
$150,000.

The employment and consulting agreements described above also contain covenants
not to compete for one year after the termination of the agreement.

In June 1998, Mr. Smart was awarded a contract for police towing in a police
district in Los Angeles. Mr. Smart conducts these operations through a newly
formed entity that he controls. We have the option to buy Mr. Smart's company,
beginning 18 months after our purchase of Absolute and ending three years
thereafter. The purchase price under this option is equal to 13 times the
after-tax net income of the entity for the 12-month period prior to the
exercise of the option. Mr. Henninger is also seeking the award of a contract
for police towing in another district in Los Angeles. If Mr. Henninger is
awarded the contract, he will also conduct these operations through a newly
formed entity that he controls. We will have a right to buy Mr. Henninger's
company on the same terms described above, beginning one year after our
purchase of Keystone and ending three years thereafter.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with regard to the
beneficial ownership of our Common Stock as of December 31, 1998, by (a) each
person whom we know to own beneficially more than five percent of the
outstanding shares of Common Stock, (b) each of our directors, (c) each of our
executive officers, and (d) all of our directors and executive officers as a
group. Except as otherwise indicated, we believe that the beneficial owners of
the securities listed below, based on information provided by such owners, have
sole investment and voting power with respect to the Common Stock shown below
as being beneficially owned by them, subject to community property laws where
applicable. Unless otherwise indicated, the address of each beneficial owner is
c/o United Road Services, Inc., 8 Automation Lane, Albany, New York 12205.

NUMBER OF
NAME SHARES PERCENT

Edward T. Sheehan(1)......................................... 714,235 4.9%
Edward W. Morawski........................................... 692,277 4.8
Todd Q. Smart................................................ 297,267 2.1
Donald F. Moorehead, Jr...................................... 86,760 *
Richard A. Molyneux.......................................... -- --
Robert J. Adams, Jr. ........................................ -- --
Allan D. Pass................................................ -- --
Donald J. Marr............................................... -- --
Grace M. Hawkins............................................. -- --
Mark J. Henninger............................................ 377,624 2.6
Robert L. Berner, III(2)..................................... -- --
Merril M. Halpern(2)......................................... -- --
Charter URS LLC(2)(3)........................................ 2,900,000 15.6
Mark McKinney(4)............................................. 930,000 6.4
Ross Berner(5)............................................... 930,000 6.4
All directors and executive officers as a group (12
persons).................................................... 2,168,163 13.8

- ---------------------
* Less than one percent.
(1) Includes 10,235 shares held by children of Mr. Sheehan. Mr. Sheehan
disclaims beneficial ownership of such shares.

(2) The address of this stockholder or director is 535 Madison Avenue, New
York, New York 10022.

(3) According to a Schedule 13D dated December 7, 1998, these shares are owned
of record by Charter URS LLC, a Delaware limited liability company
("Charterhouse"). Charterhouse Equity Partners III, L.P., a Delaware
limited partnership ("CEP III"), is the principal member of Charterhouse.
The general partner of CEP III, is CHUSA Equity Investors III, L.P., whose
general partner is Charterhouse Equity III, Inc., a wholly-owned subsidiary
of Charterhouse International. Each of Charterhouse and CEP III may be
deemed to beneficially own the shares held of record by Charterhouse. Each
of Charterhouse and CEP III have shared voting and dispositive power over
these shares. Mr. Halpern serves as Chairman of the Board and Chief
Executive Officer of Charterhouse International and Mr. Berner serves as
Managing Director of Charterhouse International. Messrs. Berner and Halpern
disclaim beneficial ownership with respect to the shares held of record by
Charterhouse.

(4)The address of this stockholder is 1298 Green Oaks Dr., Littleton, CO 80121.

(5)The address of this stockholder is 1360 Lombard #302, San Francisco, CA
94109.

SELLING STOCKHOLDERS

The table below lists the stockholders eligible to sell their shares under this
prospectus, along with the number of shares that each stockholder may sell. The
shares listed below in the first column have been received by the stockholders
as consideration for the sale of their businesses to us. In connection with the
acquisitions, certain stockholders agreed to have a portion of the
consideration for their businesses withheld by us to satisfy their
indemnification obligations under their purchase agreements. The second column
lists the number of shares that are being withheld as of December 31, 1998. If
we do not make any indemnification claims prior to the date specified in the
third column these shares will be released to the appropriate stockholders. The
fourth column lists the total number of shares which may be sold under this
prospectus assuming all withheld shares are released to the appropriate
stockholders.

NUMBER NUMBER OF
OF SHARES SHARES WITHHELD TOTAL
ISSUED AS OF AS OF SHARE NUMBER OF
STOCKHOLDER DECEMBER 31, 1998 DECEMBER 31, 1998 RELEASE DATE SHARES
----------- ----------------- ----------------- ---------------- ---------

Richard Wallis.......... 86,612 -- -- 86,612
Allan R. Schoenenberger. 39,873 -- -- 39,873
Carol L. Bliss.......... 35,026 -- -- 35,026
Leslie R. Surface....... 50,512 -- -- 50,512
Melvin R. and Marian R.
Martin................. 84,512 9,390 January 22, 1999 93,902
Stephen E. Rouse........ 35,956 -- -- 35,956
Robert Cole............. 22,023 -- -- 22,023
Garvin W. and Rita L.
Robertson.............. 29,778 -- -- 29,778
Dale E. and Sandra K.
Schroeder.............. 125,000 -- -- 125,000
Clifford W. Kennamer.... 124,102 20,683 January 15, 1999 144,785
Janetta R. Bowman....... 19,805 4,952 July 2, 1999 24,757
Brian Healey............ 99,602 -- -- 99,602
Patrick K. Willis....... 100,624 12,584 January 22, 1999 113,208
Wayne Brisco............ 73,191 17,925 February 5, 1999 91,116
Douglas F. Bettarel..... 29,148 -- -- 29,148(1)
William B. McIntyre..... 2,917 1,945 July 30, 1999 4,862(2)
James B. Kirkman........ 2,917 1,945 July 30, 1999 4,862(3)
Victoria L. O'Connor.... 9,424 -- -- 9,424
Edward V. Corcoran...... 86,749 -- -- 86,749
Gerald J. Corcoran...... 86,749 -- -- 86,749
--------- ------ ---------
Total............... 1,144,520 69,424 1,213,944
========= ====== =========

- --------

(1) Mr. Bettarel has agreed not to sell any of these shares until February 3,
1999.

(2) Mr. McIntyre has agreed not to sell any of these shares until January 31,
1999.

(3) Mr. Kirkman has agreed not to sell any of these shares until January 31,
1999.

Except for Mr. Martin, Ms. Martin and Mr. Kirkman, each of the selling
stockholders is currently one of our employees or consultants.

If the selling stockholders sell all shares covered by this prospectus (and if
the stockholders do not purchase or sell any additional shares), none of the
stockholders would own any shares of Common Stock. The Company will not receive
any proceeds from any sales of shares by the selling stockholders.

PLAN OF DISTRIBUTION

Selling stockholders may sell their shares either directly or through a broker-
dealer or other agent at prices related to prevailing market prices or at
negotiated prices, in one or more of the following kinds of transactions:

. transactions on the Nasdaq National Market or other stock exchange that
lists the shares;

. transactions on the over-the-counter market; or

. transactions negotiated between stockholders and purchasers, or
otherwise.

Broker-dealers or agents may purchase shares directly from a selling
stockholder or sell shares to someone else on behalf of a selling stockholder.
Broker-dealers may charge commissions to both stockholders selling shares and
purchasers buying shares sold by a selling stockholder. If a broker buys shares
directly from a selling stockholder, the broker may resell the shares through
another broker, and the other broker may receive compensation from the selling
stockholder for the resale.

To the extent required by laws, regulations or agreements we have made, we will
use our best efforts to file a prospectus supplement during the time
stockholders are offering or selling shares covered by this prospectus in order
to add or correct important information about the plan of distribution for the
shares.

IN ADDITION TO ANY OTHER APPLICABLE LAWS OR REGULATIONS, SELLING STOCKHOLDERS
MUST COMPLY WITH CERTAIN REGULATIONS RELATING TO DISTRIBUTIONS BY SELLING
STOCKHOLDERS, INCLUDING REGULATION M UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED.

CERTAIN STATES MAY REQUIRE THAT REGISTRATION, EXEMPTION FROM REGISTRATION OR
NOTIFICATION REQUIREMENTS BE MET BEFORE SELLING STOCKHOLDERS MAY SELL THEIR
SHARES. CERTAIN STATES MAY ALSO REQUIRE SELLING STOCKHOLDERS TO SELL SHARES
ONLY THROUGH BROKER-DEALERS.

WE WILL PAY ALL EXPENSES TO REGISTER THE SHARES, BUT SELLING STOCKHOLDERS WILL
PAY ANY UNDERWRITING COMMISSIONS AND EXPENSES, BROKERAGE FEES, TRANSFER TAXES
AND THE FEES AND EXPENSES OF THEIR ATTORNEYS AND OTHER EXPERTS.

DESCRIPTION OF CAPITAL STOCK

GENERAL

Our authorized capital stock consists of 40,000,000 shares. Of these shares,
35,000,000 shares are Common Stock, $0.001 par value, and 5,000,000 shares are
Preferred Stock, $0.001 par value. As of December 31, 1998, there were
15,707,085 shares of Common Stock and no shares of Preferred Stock outstanding.
The following discussion of the material features of our capital stock is
intended as a summary only. As a result, for complete information you should
read our Amended and Restated Certificate of Incorporation and Amended and
Restated Bylaws, which are included as exhibits to the registration statement
of which this prospectus is a part.

COMMON STOCK

All holders of our Common Stock are entitled to one vote for each share they
own on all matters submitted to a vote of stockholders. Subject to the terms of
any Preferred Stock we may issue, holders of Common Stock are entitled to
receive ratably any dividends as may be declared from time to time by the Board
of Directors. In the event we liquidate, dissolve or wind up, holders of Common
Stock are entitled to share ratably in all assets remaining after payment of
liabilities and liquidation preferences of any outstanding shares of Preferred
Stock. Holders of Common Stock have no preemptive rights or rights to convert
their Common Stock into any other securities. There are no redemption or
sinking fund provisions applicable to the Common Stock. All outstanding shares
of Common Stock are fully paid and non-assessable.

PREFERRED STOCK

Our Board of Directors (the "Board") has the authority, without action by the
stockholders, to designate and issue up to 5,000,000 shares of Preferred Stock
in one or more series and to designate the dividend rate, voting rights and
other rights, preferences and restrictions of each series, any or all of which
may be greater than the rights of the Common Stock. We have no present plans to
issue any shares of Preferred Stock.

One of the effects of undesignated Preferred Stock may be to enable our Board
to discourage an attempt to obtain control of the Company by means of a tender
offer, proxy contest, merger or otherwise and to protect the continuity of our
management. The issuance of shares of Preferred Stock may adversely affect the
rights of holders of Common Stock. For example, any Preferred Stock we issue
may rank prior to the Common Stock as to dividend rights, liquidation
preference or both, may have full or limited voting rights and may be
convertible into shares of Common Stock. Accordingly, the issuance of shares of
Preferred Stock may discourage bids for the Common Stock or may otherwise
adversely affect the market price of the Common Stock.

CLASSIFIED BOARD OF DIRECTORS; FILLING VACANCIES

Our Amended and Restated Certificate of Incorporation provides that our Board
of Directors shall be divided into three classes and that the number of
directors in each class shall be as nearly equal as is possible based upon the
number of directors constituting the entire Board. The certificate of
incorporation effectively provides that the term of office of the first class
of directors will expire at

our first annual meeting of stockholders following the initial public offering,
the term of office of the second class of directors will expire at our second
annual meeting of stockholders following the initial public offering, and the
term of office of the third class of directors will expire at our third annual
meeting of stockholders following the initial public offering. At each annual
meeting of stockholders, successors to directors of the class whose term
expires at such meeting will be elected to serve for three-year terms and until
their successors are elected and qualified.

The classification of our Board of Directors has the effect of making it more
difficult for stockholders to change the composition of the Board. At least two
annual meetings of stockholders, instead of one, will generally be required to
change the majority of the Board. Such a delay may help to provide the Board
with sufficient time to analyze an unsolicited proxy contest, a tender or
exchange offer or any other extraordinary corporate transaction. However, such
classification provisions could also have the effect of discouraging a third
party from initiating a proxy contest, making a tender offer or otherwise
attempting to obtain control of the Company, even though such an attempt might
be beneficial to our stockholders. The classification of the Board could thus
increase the likelihood that incumbent directors will retain their positions.

Under Delaware law, unless otherwise provided in the certificate of
incorporation, directors serving on a classified board may only be removed by
the stockholders for cause. Our certificate of incorporation does not override
this provision. Our certificate of incorporation does provide that, subject to
the rights of any holders of Preferred Stock, newly created directorships
resulting from an increase in the authorized number of directors or vacancies
on the Board resulting from death, resignation, retirement, disqualification or
removal of directors or any other cause may be filled only by the Board (and
not by the stockholders unless there are no directors in office). Accordingly,
the Board could prevent any stockholder from enlarging the Board and filling
the new directorships with such stockholder's own nominees.

The provisions of the certificate of incorporation governing the removal of
directors and the filling of vacancies may have the effect of discouraging a
third party from initiating a proxy contest, making a tender offer or otherwise
attempting to gain control of our company, or of attempting to change the
composition or policies of the Board, even though such attempts might be
beneficial to our stockholders. These provisions of the certificate of
incorporation could thus increase the likelihood that incumbent directors will
retain their positions.

STOCKHOLDER MEETING PROVISIONS

Our certificate of incorporation and bylaws provide that (subject to the rights
of any holders of Preferred Stock) (i) only a majority of the Board of
Directors or the Chief Executive Officer is able to call a special meeting of
stockholders; and (ii) stockholder action may be taken only at a duly called
and convened annual or special meeting of stockholders and may not be taken by
written consent. These provisions, taken together, prevent stockholders from
forcing consideration of stockholder proposals over the opposition of the
Board, except at an annual meeting.

The Bylaws establish an advance notice procedure for stockholders to make
nominations of candidates for election as director, or to bring other business
before an annual meeting of our stockholders.

The notice procedure provides that, subject to the rights of any holders of
Preferred Stock, only persons who are nominated by or at the direction of the
Board, any committee appointed by the Board, or by a stockholder who has given
timely written notice to our Secretary prior to the meeting at which directors
are to be elected will be eligible for election as directors. At an annual
meeting, only such business may be conducted as has been brought before the
meeting by the Board, any committee appointed by the Board, or by a stockholder
who has given timely written notice to our Secretary of such stockholder's
intention to bring such business before such meeting. To be timely, we must
receive notice of stockholder nominations or proposals not less than 60 days
nor more than 90 days prior to the scheduled date of the meeting (or, if less
than 70 days' notice or prior public disclosure of the date of the meeting is
given, then not later than the 15th day following the earlier of (i) the day
such notice was mailed or (ii) the day such public disclosure was made). These
notices must contain certain prescribed information.

This notice procedure affords our Board of Directors an opportunity to consider
the qualifications of proposed director nominees or the merit of stockholder
proposals, and, to the extent deemed appropriate by the Board, to inform
stockholders about such matters. The notice procedure also provides a more
orderly procedure for conducting annual meetings of stockholders.

Although our bylaws do not give our Board of Directors any power to approve or
disapprove stockholder nominations for the election of directors or proposals
for action, the provisions described above may have the effect of precluding a
contest for the election of directors or the consideration of stockholder
proposals. These provisions may also discourage or deter a third party from
conducting a solicitation of proxies to elect its own slate of directors or to
approve its own proposal.

DELAWARE LAW

We are a Delaware corporation and are subject to Section 203 of the Delaware
General Corporation Law, an anti-takeover law. In general, Section 203 prevents
an "interested stockholder" (defined generally as a person owning 15% or more
of a corporation's outstanding voting stock) from engaging in a "business
combination" with a Delaware corporation for three years following the date
such person became an interested stockholder. This restriction is subject to
certain exceptions such as approval of the board of directors and of the
holders of at least two-thirds of the outstanding shares of voting stock not
owned by the interested stockholder. The existence of this provision is
expected to have an anti-takeover effect, possibly inhibiting attempts that
might result in a premium over the market price for the shares of Common Stock.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Pursuant to the provisions of the Delaware General Corporation Law, we have
adopted provisions in our certificate of incorporation which provide that our
directors shall not be personally liable for monetary damages for a breach of
fiduciary duty as a director. However, the directors will be liable if the
damages result from (i) a breach of the director's duty of loyalty to our
company or our stockholders; (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii) an act
related to an unlawful stock repurchase or payment of a dividend under Section
174 of Delaware General Corporation Law; and (iv) transactions from which

the director derived an improper personal benefit. Also, the limitation of
liability does not affect the availability of equitable remedies such as
injunctive relief or rescission.

Our bylaws require us to indemnify our officers and directors, and permit us to
indemnify our other agents, to the fullest extent permitted under Delaware law.
We have entered into separate indemnification agreements with our directors and
officers which are, in some cases, broader than the specific indemnification
provisions contained in the Delaware General Corporation Law. The
indemnification agreements require us, among other things, to indemnify our
officers and directors against certain liabilities that may arise by reason of
their status or service as directors or officers (other than liabilities
arising from willful misconduct), to advance their expenses incurred as a
result of any proceeding against them as to which they could be indemnified,
and to obtain directors' and officers' insurance if available on reasonable
terms.

TRANSFER AGENT

The transfer agent and registrar for our Common Stock is American Stock
Transfer and Trust Company.

LEGAL MATTERS

The legality of the Common Stock offered hereby will be passed on by the
international law firm of McDermott, Will & Emery.

EXPERTS

The financial statements of United Road Services, Inc., the combined financial
statements of Northland Auto Transporters, Inc. and Northland Fleet Leasing,
Inc., the combined financial statements of Caron Auto Works, Inc. and Caron
Auto Brokers, Inc., the combined financial statements of 5-L Corporation and
ADP Transport, Inc., the consolidated financial statements of Smith-Christensen
Enterprises, Inc. and subsidiary, the consolidated financial statements of ASC
Transportation Services and subsidiary, the consolidated financial statements
of E&R Towing & Garage, Inc. and subsidiaries, and the financial statements of
Falcon Towing and Auto Delivery, Inc., Absolute Towing and Transporting, Inc.,
Keystone Towing, Inc., Neil's Used Truck & Car Sales, Incorporated,
Environmental Auto Removal, Inc., Alert Auto Transport, Inc., Fast Towing,
Inc., Car Transporters Corporation, Schroeder Auto Carriers, Inc., MPG Transco,
Ltd. and Pilot Transport, Inc. to the extent and for the periods indicated in
their reports, have been included herein and in the registration statement in
reliance upon the reports of KPMG LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.

INDEX TO FINANCIAL STATEMENTS

PAGE

UNITED ROAD SERVICES, INC.
Unaudited Pro Forma Combined Financial Statements--Basis of Presenta-
tion................................................................... F-4
Unaudited Pro Forma Combined Balance Sheet.............................. F-5
Unaudited Pro Forma Combined Statement of Operations.................... F-6
Notes to Unaudited Pro Forma Combined Financial Statements.............. F-8
UNITED ROAD SERVICES, INC.
Independent Auditors' Report............................................ F-11
Balance Sheet........................................................... F-12
Statement of Operations................................................. F-13
Statement of Stockholders' Equity (Deficit)............................. F-14
Statement of Cash Flows................................................. F-15
Notes to Financial Statements........................................... F-16
FOUNDING COMPANIES
NORTHLAND AUTO TRANSPORTERS, INC. AND NORTHLAND FLEET LEASING, INC.
Independent Auditors' Report............................................ F-20
Combined Balance Sheets................................................. F-21
Combined Statements of Operations....................................... F-22
Combined Statements of Stockholder's Equity............................. F-23
Combined Statements of Cash Flows....................................... F-24
Notes to Combined Financial Statements.................................. F-25
FALCON TOWING AND AUTO DELIVERY, INC.
Independent Auditors' Report............................................ F-31
Balance Sheets.......................................................... F-32
Statements of Operations................................................ F-33
Statements of Stockholder's Equity...................................... F-34
Statements of Cash Flows................................................ F-35
Notes to Financial Statements........................................... F-36
SMITH-CHRISTENSEN ENTERPRISES, INC. AND SUBSIDIARY
Independent Auditors' Report............................................ F-41
Consolidated Balance Sheets............................................. F-42
Consolidated Statements of Operations................................... F-43
Consolidated Statements of Stockholders' Equity......................... F-44
Consolidated Statements of Cash Flows................................... F-45
Notes to Consolidated Financial Statements.............................. F-46
CARON AUTO WORKS, INC. AND CARON AUTO BROKERS, INC.
Independent Auditors' Report............................................ F-53
Combined Balance Sheets................................................. F-54
Combined Statements of Operations....................................... F-55
Combined Statements of Stockholders' Equity............................. F-56
Combined Statements of Cash Flows....................................... F-57
Notes to Combined Financial Statements.................................. F-58

F-1

ABSOLUTE TOWING AND TRANSPORTING, INC.
Independent Auditors' Report............................................. F-64
Balance Sheets........................................................... F-65
Statements of Operations................................................. F-66
Statements of Stockholder's Equity....................................... F-67
Statements of Cash Flows................................................. F-68
Notes to Financial Statements............................................ F-69
ASC TRANSPORTATION SERVICES AND SUBSIDIARY
Independent Auditors' Report............................................. F-73
Consolidated Balance Sheet............................................... F-74
Consolidated Statement of Operations..................................... F-75
Consolidated Statement of Stockholder's Deficit.......................... F-76
Consolidated Statement of Cash Flows..................................... F-77
Notes to Consolidated Financial Statements............................... F-78

SELECTED ACQUIRED COMPANIES

MPG TRANSCO, LTD.

Independent Auditors' Report............................................ F-83
Balance Sheets.......................................................... F-84
Statements of Operations................................................ F-85
Statements of Stockholders' Equity...................................... F-86
Statements of Cash Flows................................................ F-87
Notes to Consolidated Financial Statements.............................. F-88

PILOT TRANSPORT, INC.

Independent Auditors' Report............................................ F-94
Balance Sheets.......................................................... F-95
Statements of Operations................................................ F-96
Statements of Stockholders' Equity...................................... F-97
Statements of Cash Flows................................................ F-98
Notes to Financial Statements........................................... F-99
E&R TOWING & GARAGE, INC. AND SUBSIDIARIES
Independent Auditors' Report............................................ F-102
Consolidated Balance Sheets............................................. F-103
Consolidated Statement of Operations and Retained Earnings ............. F-104
Consolidated Statements of Cash Flows................................... F-105
Notes to Consolidated Financial Statements.............................. F-107
ENVIRONMENTAL AUTO REMOVAL, INC.
Independent Auditors' Report............................................ F-111
Balance Sheets.......................................................... F-112
Statements of Operations and Retained Earnings (Deficit)................ F-113
Statements of Cash Flows................................................ F-114
Notes to Financial Statements........................................... F-115
NEIL'S USED TRUCK & CAR SALES, INCORPORATED
Independent Auditors' Report............................................ F-119
Balance Sheet........................................................... F-120
Statement of Operations................................................. F-121
Statement of Stockholders' Equity....................................... F-122
Statement of Cash Flows................................................. F-123
Notes to Financial Statements........................................... F-124

F-2

5-L CORPORATION AND ADP TRANSPORT, INC.
Independent Auditors' Report............................................ F-127
Combined Balance Sheet.................................................. F-128
Combined Statement of Operations........................................ F-129
Combined Statement of Stockholders' Equity.............................. F-130
Combined Statement of Cash Flows........................................ F-131
Notes to Combined Financial Statements.................................. F-132
CAR TRANSPORTERS CORPORATION
Independent Auditors' Report............................................ F-135
Balance Sheets.......................................................... F-136
Statements of Operations................................................ F-137
Statements of Stockholder's Deficit..................................... F-138
Statements of Cash Flows................................................ F-139
Notes to Financial Statements........................................... F-140
SCHROEDER AUTO CARRIERS, INC.
Independent Auditors' Report............................................ F-144
Balance Sheet........................................................... F-145
Statement of Operations................................................. F-146
Statement of Stockholders' Equity....................................... F-147
Statement of Cash Flows................................................. F-148
Notes to Financial Statements........................................... F-149
KEYSTONE TOWING, INC.
Independent Auditors' Report............................................ F-152
Balance Sheets.......................................................... F-153
Statements of Operations................................................ F-154
Statements of Stockholder's Equity...................................... F-155
Statements of Cash Flows................................................ F-156
Notes to Financial Statements........................................... F-157
FAST TOWING, INC.
Independent Auditors' Report............................................ F-162
Balance Sheet........................................................... F-163
Statement of Operations................................................. F-164
Statement of Stockholders' Equity....................................... F-165
Statement of Cash Flows................................................. F-166
Notes to Financial Statements........................................... F-167
ALERT AUTO TRANSPORT, INC.
Independent Auditors' Report............................................ F-171
Balance Sheet........................................................... F-172
Statement of Earnings and Retained Earnings............................. F-173
Statement of Cash Flows................................................. F-174
Notes to Financial Statements........................................... F-175

F-3

UNITED ROAD SERVICES, INC.

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
BASIS OF PRESENTATION

The following unaudited pro forma combined financial statements give effect
to certain acquisitions completed by United Road Services, Inc. since its
inception in July 1997. All of these acquisitions were accounted for using the
purchase method of accounting.

The September 30, 1998 unaudited pro forma combined balance sheet gives
effect to the acquisitions of MPG Transco, Ltd. ("MPG") and Pilot Transport,
Inc. ("Pilot") as if they had occurred on September 30, 1998.

The unaudited pro forma combined statements of operations give effect to the
acquisitions by United Road Services, Inc. of the Founding Companies and the
Selected Acquired Companies, as if they had occurred on January 1, 1997.

To the extent the former owners of the Founding Companies and Selected
Acquired Companies have agreed to reductions in salary, bonuses and benefits,
these reductions have been reflected in the unaudited pro forma combined
statements of operations.

The pro forma adjustments are based on estimates, available information and
certain assumptions, and may be revised, as additional information becomes
available. The pro forma financial information does not purport to represent
what United Road Services, Inc.'s financial position or results of operations
would actually have been had such transactions occurred on these dates and are
not necessarily representative of United Road Services, Inc.'s financial
position or results of operations for any future period. Since United Road
Services, Inc., the Founding Companies and the Selected Acquired Companies
were not under common control or management during the periods presented,
historical combined results may not be comparable to, or indicative of, future
performance. See "Risk Factors" included elsewhere herein. The unaudited pro
forma combined financial statements should be read in conjunction with the
other financial statements and notes thereto included elsewhere in this
prospectus.

F-4

UNITED ROAD SERVICES, INC.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

SEPTEMBER 30, 1998

(IN THOUSANDS)

UNITED
ROAD PRO FORMA PRO
SERVICES, ACQUISITION FORMA
INC. MPG PILOT ADJUSTMENTS COMBINED
--------- ------ ----- ----------- --------

ASSETS
Cash and cash
equivalents............ $ 2,290 348 181 (1,952)(a)(b) 867
Accounts receivable..... 16,096 2,058 1,945 -- 20,099
Less: allowance........ 1,317 100 -- -- 1,417
--------- ------ ----- ------ -------
Accounts receivable,
net.................... 14,779 1,958 1,945 -- 18,682
Accounts receivable from
related parties and
employees.............. 285 42 -- -- 327
Inventory............... 564 -- -- -- 564
Notes receivables....... 430 -- -- -- 430
Prepaid and other
current assets......... 2,078 283 616 -- 2,977
--------- ------ ----- ------ -------
Total Current Assets... 20,426 2,631 2,742 (1,952) 23,847
Property and equipment,
net.................... 37,094 10,630 3,681 (341)(a) 51,064
Other non-current
assets, net............ 1,592 347 -- -- 1,939
Goodwill................ 137,516 -- -- 41,930 (a) 179,446
--------- ------ ----- ------ -------
Total Assets........... $ 196,628 13,608 6,423 39,637 256,296
========= ====== ===== ====== =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current installment of
notes payable.......... $ 170 2,005 -- -- 2,175
Current installment of
lease obligations...... 1,435 -- -- -- 1,435
Borrowings under lines
of credit.............. -- 986 2,005 -- 2,991
Payable to related
parties................ 1,134 -- -- -- 1,134
Accounts payable........ 10,011 818 240 -- 11,069
Income taxes payable.... 616 740 -- -- 1,356
Payable to
stockholders........... 1,064 24 -- -- 1,088
Other accrued
liabilities............ 4,761 891 1,065 -- 6,717
--------- ------ ----- ------ -------
Total Current
Liabilities........... 19,191 5,464 3,310 -- 27,965
Credit facility
borrowings............. 26,000 -- -- 19,000 (b) 45,000
Notes payable, excluding
current installments... -- 1,422 -- -- 1,422
Capital lease
obligations, excluding
current installments... 2,253 -- -- -- 2,253
Deferred income taxes... 2,736 1,462 -- (136)(a) 4,062
--------- ------ ----- ------ -------
Total Liabilities...... 50,180 8,348 3,310 18,864 80,702
Stockholders' Equity:
Common stock............ 14 1 10 (9)(a) 16
Additional paid-in
capital................ 144,413 1,417 -- 27,727 (a) 173,557
Retained earnings....... 2,021 3,842 3,103 (6,945)(a) 2,021
--------- ------ ----- ------ -------
Total Stockholders'
Equity................ 146,448 5,260 3,113 20,773 175,594
--------- ------ ----- ------ -------
Total Liabilities and
Stockholders' Equity.. $ 196,628 13,608 6,423 39,637 256,296
========= ====== ===== ====== =======

The accompanying notes are an integral part of these unaudited pro forma
combined financial statements.

F-5

UNITED ROAD SERVICES, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)

TOTAL
UNITED FOUNDING
ROAD COMPANIES
SERVICES, 1/1/98 -
INC. 5/5/98 MPG PILOT E&R EAR NEIL'S 5-L/ADP CTC SCHROEDER KEYSTONE FAST TOW ALERT
--------- --------- ------ ------ ----- ----- ------ ------- ----- --------- -------- -------- -----

Net revenue...... $44,842 19,035 17,082 14,405 2,929 8,539 5,891 5,069 4,500 3,169 1,998 1,851 1,472
Cost of revenue.. 32,073 13,851 11,639 8,906 1,645 6,022 4,813 4,289 3,862 2,537 1,329 915 1,375
------- ------ ------ ------ ----- ----- ----- ----- ----- ----- ----- ------ -----
Gross profit.... 12,769 5,184 5,443 5,499 1,284 2,517 1,078 780 638 632 669 936 97
Selling general
and
administrative
expenses......... 7,565 3,525 3,420 3,091 662 1,740 375 335 623 396 652 1,123 148
Goodwill
amortization..... 883 -- -- -- -- -- -- -- -- -- -- -- --
------- ------ ------ ------ ----- ----- ----- ----- ----- ----- ----- ------ -----
Income (loss)
from operations.. 4,321 1,659 2,023 2,408 622 777 703 445 15 236 17 (187) (51)
Other income
(expense):
Interest
expense......... (526) (451) (292) (114) (25) (7) (47) -- (299) (18) (26) -- (1)
Interest income. 615 19 19 -- 43 52 -- -- -- -- -- 1 --
Gain (loss) on
sale of assets.. -- (24) (325) (32) 19 13 -- -- -- -- -- (140) 21
Other........... -- (232) (2) -- 1 1 -- 23 (54) 1 94 -- --
------- ------ ------ ------ ----- ----- ----- ----- ----- ----- ----- ------ -----
Income (loss)
before income
taxes............ 4,410 971 1,423 2,262 660 836 656 468 (338) 219 85 (326) (31)
Income tax
expense
(benefit)........ 2,215 437 591 -- 240 16 -- -- -- -- -- 29 (11)
------- ------ ------ ------ ----- ----- ----- ----- ----- ----- ----- ------ -----
Net income
(loss)........... $ 2,195 534 832 2,262 420 820 656 468 (338) 219 85 (355) (20)
======= ====== ====== ====== ===== ===== ===== ===== ===== ===== ===== ====== =====
Basic earnings
per share (g).... -- -- -- -- -- -- -- -- -- -- -- -- --
Diluted earnings
per share (g).... -- -- -- -- -- -- -- -- -- -- -- -- --

PRO FORMA
ACQUISITION PRO FORMA
ADJUSTMENTS COMBINED
---------------- ---------

Net revenue...... (1,400)(f) 129,382
Cost of revenue.. (2,936)(b)(f) 90,320
---------------- ---------
Gross profit.... 1,536 39,062
Selling general
and
administrative
expenses......... (3,504)(a) 20,151
Goodwill
amortization..... 2,082(c) 2,965
---------------- ---------
Income (loss)
from operations.. 2,958 15,946
Other income
(expense):
Interest
expense......... (1,205)(d) (3,011)
Interest income. -- 749
Gain (loss) on
sale of assets.. -- (468)
Other........... -- (168)
---------------- ---------
Income (loss)
before income
taxes............ 1,753 13,048
Income tax
expense
(benefit)........ 2,568 6,085
---------------- ---------
Net income
(loss)........... (815) 6,963
================ =========
Basic earnings
per share (g).... -- $ 0.64
=========
Diluted earnings
per share (g).... -- $ 0.63
=========

The accompanying notes are an integral part of these unaudited pro forma
combined financial statements

F-6

UNITED ROAD SERVICES, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT PER SHARE DATA)

UNITED
ROAD TOTAL
SERVICES, FOUNDING 5-L/
INC. COMPANIES MPG PILOT E&R EAR NEIL'S ADP CTC SCHROEDERS KEYSTONE FAST ALERT
--------- --------- ------ ------ ----- ------ ------ ----- ----- ---------- -------- ----- -----

Net revenue...... $ -- 42,599 21,745 17,119 8,528 14,104 9,553 9,852 6,676 5,799 3,943 3,355 2,958
Cost of revenue.. -- 31,258 15,416 10,067 5,193 10,889 8,246 8,390 5,708 4,568 2,607 1,776 2,418
----- ------ ------ ------ ----- ------ ----- ----- ----- ----- ----- ----- -----
Gross profit.... -- 11,341 6,329 7,052 3,335 3,215 1,307 1,462 968 1,231 1,336 1,579 540
Selling general
and
administrative
expenses......... 174 8,070 5,536 4,009 2,851 2,671 790 927 830 889 1,140 1,432 301
Goodwill
amortization..... -- -- -- -- -- -- -- -- -- -- -- -- --
----- ------ ------ ------ ----- ------ ----- ----- ----- ----- ----- ----- -----
Income (loss)
from operations.. (174) 3,271 793 3,043 484 544 517 535 138 342 196 147 239
Other income
(expense):
Interest
expense......... -- (835) (569) (168) (114) (27) (71) (10) (738) (31) (71) (7) (9)
Interest income. -- 48 8 -- 48 41 -- -- -- -- 2 -- --
Gain (loss) on
sale of assets.. -- 207 (92) (167) 63 12 -- -- 22 9 36 (9) 24
Other........... -- 201 (13) -- -- (6) -- 11 (200) 4 76 -- --
----- ------ ------ ------ ----- ------ ----- ----- ----- ----- ----- ----- -----
Income (loss)
before income
taxes............ (174) 2,892 127 2,708 481 564 446 536 (778) 324 239 131 254
Income tax
expense
(benefit)........ -- 826 68 -- 188 10 -- -- -- -- -- 47 89
----- ------ ------ ------ ----- ------ ----- ----- ----- ----- ----- ----- -----
Net income
(loss)........... $(174) 2,066 59 2,708 293 554 446 536 (778) 324 239 84 165
===== ====== ====== ====== ===== ====== ===== ===== ===== ===== ===== ===== =====
Basic earnings
per share(g)..... -- -- -- -- -- -- -- -- -- -- -- -- --
Diluted earnings
per share(g)..... -- -- -- -- -- -- -- -- -- -- -- -- --

PRO FORMA
ACQUISITION PRO FORMA
ADJUSTMENTS COMBINED
---------------- ---------

Net revenue...... (2,800)(f) 143,431
Cost of revenue.. (5,397)(b)(f) 101,139
---------------- ---------
Gross profit.... 2,597 42,292
Selling general
and
administrative
expenses......... (6,671)(a) 22,949
Goodwill
amortization..... 3,769 (c) 3,769
---------------- ---------
Income (loss)
from operations.. 5,499 15,574
Other income
(expense):
Interest
expense......... (1,524)(d) (4,174)
Interest income. -- 147
Gain (loss) on
sale of assets.. -- 105
Other........... -- 73
---------------- ---------
Income (loss)
before income
taxes............ 3,975 11,725
Income tax
expense
(benefit)........ 4,659 5,887
---------------- ---------
Net income
(loss)........... (684) 5,838
================ =========
Basic earnings
per share(g)..... -- $0.54
=========
Diluted earnings
per share(g)..... -- $0.53
=========

The accompanying notes are an integral part of these unaudited pro forma
combined financial statements

F-7

UNITED ROAD SERVICES, INC.

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

1. GENERAL:

United Road Services, Inc. was founded in July 1997 to become a leading
national provider of motor vehicle and equipment towing and transport
services. United Road Services, Inc. acquired the Founding Companies
simultaneously with its initial public offering and acquired the Selected
Acquired Companies subsequent to its initial public offering.

The historical financial data reflect the financial position and results of
operations of United Road Services, Inc., the Founding Companies and the
Selected Acquired Companies and were derived from the respective financial
statements included elsewhere herein. The information included in these
financial statements for the Founding Companies is for the period January 1,
1998 through May 5, 1998 and for the year ended December 31, 1997, with the
exception of Caron Auto Works, Inc. and Caron Auto Brokers, Inc. for which the
information is as of and for the six months ended June 30, 1998 and for the
fiscal year ended September 30, 1997. The information included in these
financial statements for the Selected Acquired Companies is as of and for the
nine-months ended September 30, 1998 and for the year ended December 31, 1997,
with the exception of E&R, EAR, Neil's, 5-L/ADP, CTC, Schroeder, Keystone and
Fast Tow which are for the six-month period ended June 30, 1998 and for the
year ended December 31, 1997, and Alert for which the information is as of and
for the six-month period ended May 31, 1998 and for the twelve-month period
ended February 28, 1998.

2. ACQUISITION OF THE SELECTED ACQUIRED COMPANIES:

United Road Services, Inc. acquired all of the Selected Acquired Companies
in transactions accounted for using the purchase method of accounting.

The following table sets forth the consideration paid in cash and in shares
of Common Stock for the Selected Acquired Companies (without giving effect to
any indebtedness of the Selected Acquired Companies that was assumed by the
Company).

SHARES OF
CASH COMMON STOCK
(DOLLARS IN THOUSANDS)

MPG................................................ $ 10,363 996,351
Pilot.............................................. 10,589 1,000,000
E&R................................................ 13,250 --
EAR................................................ 9,563 173,498
Neil's............................................. 6,000 --
5-L/ADP............................................ 2,533 212,023
CTC................................................ 1,350 --
Schroeder.......................................... 969 125,000
Keystone........................................... 4,531 377,624
Fast............................................... 5,255 --
Alert.............................................. 1,146 144,785
---------- ------------
Total............................................ $65,549 3,029,281
========== ============

F-8

UNITED ROAD SERVICES, INC.

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)

3. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS:

(a) Reflects the acquisitions of MPG and Pilot by United Road Services, Inc.
for a purchase price of $50.0 million consisting of $21.0 million in cash and
1,996,351 shares of Common Stock. The purchase price less the net assets
acquired, including an adjustment for property and equipment to reflect fair
market value, including the resulting tax effect, results in goodwill of $41.9
million. Based upon management's preliminary analysis, it is anticipated that
the historical value of the assets and liabilities of the acquired companies,
with the exception of the adjustments made for property and equipment, will
approximate fair value. Management has not identified any other material
tangible or intangible assets to which a portion of the purchase price could
be reasonably allocated.

(b) Reflects $19.0 million of credit facility borrowings utilized to fund
acquisitions.

4. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS ADJUSTMENTS:

Nine-months ended September 30, 1998 and year ended December 31, 1997

(a) Reflects the reductions in salaries, bonuses and benefits to which the
former stockholders of the Founding Companies and the Selected Acquired
Companies have agreed in the amounts of $3.5 million and $6.7 million for the
nine-months ended September 30, 1998 and for the year ended December 31, 1997,
respectively.

(b) Adjusts the depreciation of vehicles based upon adjusted carrying values
utilizing lives of 10 to 15 years.

(c) Reflects the amortization over a 40-year estimated life of goodwill to
be recorded as a result of the acquisition of the Founding Companies and the
Selected Acquired Companies.

(d) Reflects the interest expense relating to the credit facility borrowings
utilized to fund acquisitions and the reduction in interest expense related to
$1.6 million and $1.5 million of debt at December 31, 1997 and September 30,
1998 respectively which has been repaid.

(e) Reflects the incremental provision for federal and state income taxes
relating to all entities being combined and other statements of operations
adjustments including the non-deductibility of goodwill at an estimated rate
of 38%.

(f) Reflects the elimination of $1.4 million and $2.8 million of
intercompany revenue and related cost of revenue between E&R and EAR for the
nine-months ended September 30, 1998 and the year ended December 31, 1997,
respectively.

F-9

UNITED ROAD SERVICES, INC.

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(g) The number of shares used in the calculations of basic and diluted
earnings per share have been derived as follows:

PRO FORMA
COMBINED

Shares issued in connection with the formation of United Road
Services, Inc. ................................................ 2,604,000
Shares issued in the initial public offering.................... 2,594,863
Shares issued in January 1998................................... 218,736
Shares issued in connection with the acquisitions of the
Founding Companies and the Selected Acquired Companies......... 5,405,022
----------
Basic shares estimated to be outstanding........................ 10,822,621
Incremental effect of options on shares outstanding............. 159,117
----------
Diluted shares estimated to be outstanding...................... 10,981,731
==========

F-10

INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
United Road Services, Inc.:

We have audited the accompanying balance sheet of United Road Services, Inc.
as of December 31, 1997, and the related statement of operations,
stockholders' equity (deficit), and cash flows for the period from July 25,
1997 (inception) through December 31, 1997. These financial statements are the
responsibility of United Road Services, Inc.'s management. Our responsibility
is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of United Road Services, Inc.
as of December 31, 1997, and the results of its operations and its cash flows
for the period from July 25, 1997 (inception) through December 31, 1997 in
conformity with generally accepted accounting principles.

/s/ KPMG LLP

Albany, New York

February 24, 1998, except as
to Notes (4), 4(g) and 4(h),
which are as of May 8, 1998,
May 6, 1998 and December 7,
1998, respectively

F-11

UNITED ROAD SERVICES, INC.

BALANCE SHEET

DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents......................... $ 49,987 $ 2,290,000
Trade receivables, net............................ -- 14,779,000
Other receivables................................. -- 1,040,000
Prepaid expenses and deposits..................... -- 2,317,000
--------- ------------
Total current assets............................ 49,987 20,426,000
Property and equipment, net......................... -- 37,092,000
Goodwill, net....................................... -- 137,516,000
Deferred financing costs, net....................... -- 997,000
Other non-current assets............................ -- 597,000
--------- ------------
Total assets.................................... $ 49,987 $196,628,000
========= ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt and capitalized
leases.......................................... $ -- $ 1,435,000
Notes payable.................................... -- 170,000
Accounts payable................................. 62,077 10,011,000
Accrued income taxes............................. -- 616,000
Other accrued liabilities........................ -- 4,761,000
Due to related parties........................... 91,874 2,198,000
--------- ------------
Total current liabilities....................... 153,951 19,191,000
--------- ------------
Credit facility borrowings.......................... -- 26,000,000
Long-term debt and capitalized lease obligations
less current portion............................... -- 2,253,000
Deferred income taxes............................... -- 2,736,000
--------- ------------
Total liabilities............................... 153,951 50,180,000
--------- ------------
Stockholders' equity (deficit):
Preferred stock; 5,000,000 shares authorized; no
shares issued or outstanding..................... -- --
Common stock, $.001 par value; 35,000,000 shares
authorized; Issued and outstanding 2,604,000 and
14,497,384 shares, respectively.................. 2,604 14,000
Additional paid-in capital........................ 67,396 144,413,000
Retained earnings (accumulated deficit)........... (173,964) 2,021,000
--------- ------------
Total stockholders' equity (deficit)............ (103,964) 146,448,000
--------- ------------
Total liabilities and stockholders' equity
(deficit)...................................... $ 49,987 $196,628,000
========= ============

See accompanying notes to financial statements.

F-12

UNITED ROAD SERVICES, INC.

STATEMENT OF OPERATIONS

FOR THE
PERIOD FROM
JULY 25, 1997
(INCEPTION) NINE-MONTHS
THROUGH ENDED
DECEMBER 31, 1997 SEPTEMBER 30, 1998
----------------- ------------------
(UNAUDITED)

Revenue................................... $ -- $44,842,000
Cost of revenue........................... -- 30,765,000
Amortization of goodwill.................. -- 883,000
Depreciation.............................. -- 1,308,000
Selling, general and administrative ex-
penses................................... 173,964 7,565,000
--------- -----------
(Loss) income from operations......... (173,964) 4,321,000
Other income (expense):
Interest income....................... -- 615,000
Interest expense...................... -- (526,000)
--------- -----------
Income (loss) before income taxes..... (173,964) 4,410,000
Income tax expense........................ -- 2,215,000
--------- -----------
Net (loss) income..................... $(173,964) $ 2,195,000
========= ===========
Per share amounts:
Basic earnings........................ $ (.08) $ .25
========= ===========
Diluted earnings...................... $ (.08) $ .25
========= ===========

See accompanying notes to financial statements.

F-13

UNITED ROAD SERVICES, INC.

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

ADDITIONAL RETAINED TOTAL
COMMON PAID-IN EARNINGS STOCKHOLDERS'
STOCK CAPITAL (DEFICIT) EQUITY (DEFICIT)
------- ------------ ---------- ----------------

Initial capitalization....... $ 2,604 $ 67,396 $ -- $ 70,000
Net loss--1997............... -- -- (173,964) (173,964)
------- ------------ ---------- ------------
Balance at December 31, 1997. 2,604 67,396 (173,964) (103,964)
Issuance of common stock--
nine-months ended September
30, 1998 (unaudited)........ 11,396 144,345,604 -- 144,357,000
Net income--nine-months ended
September 30, 1998
(unaudited)................. -- -- 2,194,964 2,194,964
------- ------------ ---------- ------------
Balance at September 30, 1998
(unaudited)................. $14,000 $144,413,000 $2,021,000 $146,448,000
======= ============ ========== ============

See accompanying notes to financial statements.

F-14

UNITED ROAD SERVICES, INC.

STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM NINE-MONTHS
JULY 25, 1997 ENDED
(INCEPTION) THROUGH SEPTEMBER 30,
DECEMBER 31, 1997 1998
------------------- -------------
(UNAUDITED)

Cash flows from operating activities:
Net loss................................... $(173,964) $ 2,194,964
Adjustments to reconcile net income (loss)
to net cash (used in) provided by
operating activities:
Depreciation............................. -- 1,308,000
Amortization of goodwill................. -- 883,000
Amortization of deferred loan costs...... -- 96,000
Deferred income taxes.................... -- 516,000
Changes in operating assets and
liabilities, net of effects of
acquisitions:
Increase in trade receivables............ -- (3,994,000)
Decrease in other receivables............ -- 1,081,000
Decrease in prepaid expenses and
deposits................................ -- 79,000
Increase in other non-current assets..... -- (186,000)
Increase in accounts and notes payable... 62,077 2,367,049
Increase in accrued income taxes......... -- 616,000
Decrease in other accrued liabilities.... -- (127,000)
--------- ------------
Net cash (used in) provided by
operating activities.................. (111,887) 4,834,013
--------- ------------
Cash flows from investing activities:
Acquisition of companies, net of cash
acquired.................................. -- (95,336,000)
Purchase of property and equipment......... -- (5,127,000)
Amounts payable to related parties......... 91,874 2,106,000
--------- ------------
Net cash provided by (used in)
investing activities.................. 91,874 (98,357,000)
--------- ------------
Cash flows from financing activities:
Proceeds from issuance of stock, net....... 70,000 90,982,000
Borrowings on credit facility.............. -- 26,000,000
Payment of deferred financing costs........ -- (622,000)
Payments on long-term debt and capital
leases.................................... -- (20,597,000)
--------- ------------
Net cash provided by financing
activities............................ 70,000 95,763,000
--------- ------------
Net increase in cash and cash equivalents.... 49,987 2,240,013
Cash and cash equivalents at beginning of pe-
riod........................................ -- 49,987
--------- ------------
Cash and cash equivalents at end of period... $ 49,987 $ 2,290,000
========= ============

See accompanying notes to financial statements.

F-15

UNITED ROAD SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

United Road Services, Inc. (formerly Towing America, Inc.), a Delaware
corporation was formed in July 1997 to become a leading national provider of
motor vehicle and equipment towing and transport services. United Road
Services, Inc. elected to incorporate under the S-corporation provisions of
the Internal Revenue Code. United Road Services, Inc. changed its status to a
C-corporation effective January 1, 1998. From inception through September 30,
1998, United Road Services, Inc. has acquired thirty-three businesses (the
"Acquisitions"), seven of which closed simultaneously with the consummation of
an initial public offering ("Offering") of its common stock on May 6, 1998.

United Road Services, Inc. commenced operations when it acquired the
Founding Companies on May 6, 1998. As such, it has a limited combined
operating history and future success is dependent upon a number of factors
which include, among others, the ability to integrate operations, reliance on
the identification and integration of satisfactory acquisition candidates, the
availability of acquisition financing, and the ability to manage growth and
attract and retain quality management.

(b) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments the fair value
of United Road Services, Inc.'s financial instruments approximates their
carrying values.

Management of United Road Services, Inc. has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.

(d) Income Taxes

From July 25, 1997 (inception) to December 31, 1997, United Road Services,
Inc. elected to file federal and State income tax returns under S-corporation
provisions. As such, earnings or losses flow through to the stockholder level.
Accordingly, no income tax expense or benefit has been recorded by United Road
Services, Inc. as of December 31, 1997.

Effective January 1, 1998, United Road Services, Inc. elected to file
federal and State income tax returns under C-corporation provisions. As a
result of United Road Services, Inc. profit for the nine-months ended
September 30, 1998, a tax expense has been recorded at September 30, 1998 at
the effective tax rate expected by United Road Services, Inc. for the year
ending December 31, 1998.

(e) Interim Financial Statements

The interim financial information included in these financial statements is
unaudited but reflects all adjustments (consisting of only normal recurring
accruals) which are, in the opinion of management, necessary

F-16

UNITED ROAD SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

for a fair presentation of the results for the interim periods presented.
Results of operations for the nine-months ended September 30, 1998 is not
necessarily indicative of results to be expected for the full year ended
December 31, 1998.

Subsequent to the Offering, regional subsidiaries were formed in order to
facilitate the management of businesses acquired throughout the United States.
In addition to these regional subsidiaries, thirteen of the businesses
acquired are subsidiaries of United Road Services, Inc. Consequently, the
interim financial information consists of consolidated amounts.

(f) Impact of Recently Issued Accounting Standards

In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income". SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components in a full set of general
purpose financial statements. SFAS No. 130 requires all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed in
equal prominence with the other financial statements. United Road Services,
Inc. adopted SFAS No. 130 during the period ended March 31, 1998, however the
adoption of SFAS No. 130 did not have any effect on the reporting and display
of the financial position, results of operations or cash flows of United Road
Services, Inc. There is no difference in the nine months ended September 30,
1998 between net income and comprehensive income.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information". SFAS No. 131 established standards for
the way public companies are to report information about operating segments in
annual financial statements and requires those enterprises to report selected
information about operating segments in interim financial reports issued to
shareholders. SFAS No. 131 focuses on a "management approach" concept as the
basis for identifying reportable segments. The management approach is based on
the way that management organizes the segments within the enterprise for
making operating decisions and assessing performance. United Road Services,
Inc. continues to evaluate the provisions of SFAS No. 131 and will adopt SFAS
No. 131 as of and for the period ending December 31, 1998.

In March 1998, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position (SOP) 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." SOP 98-1 requires
that certain costs related to the development or purchase of internal-use
software be capitalized and amortized over the estimated useful life of the
software. SOP 98-1 also requires the costs related to the preliminary project
stage and post-implementation/operations state of an internal-use computer
software development project be expensed as incurred. United Road Services,
Inc. adopted SOP 98-1 as of January 1, 1998.

In March 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-
up Activities." SOP 98-5 requires the expensing of certain costs such as pre-
operating expenses and organizational costs associated with the company's
start-up activities. The effect of adoption is required to be accounted for as
a cumulative change in accounting principle. United Road Services, Inc.
adopted SOP 98-5 as of January 1, 1998. Since January 1, 1998, all start-up
costs as defined under SOP 98-5 have been expensed.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. SFAS No.
133 is effective for all fiscal quarters of fiscal years beginning after June
15, 1999. Management is currently evaluating the impact of SFAS No. 133 on the
United Road Services, Inc. consolidated financial statements.

F-17

UNITED ROAD SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) STOCKHOLDER'S EQUITY AND PER SHARE AMOUNTS

United Road Services, Inc. effected a 100-for-one stock split on December
18, 1997 for each share of common stock of United Road Services, Inc. ("Common
Stock") then outstanding. In addition United Road Services, Inc. increased
authorized shares of Common Stock to 1,000,000 shares with a $.001 par value.
Subsequently, and pursuant to an amended and restated certificate of
incorporation of United Road Services, Inc., filed on February 23, 1998, the
authorized number of shares have been increased to 40,000,000 (35,000,000
common shares and 5,000,000 preferred shares). Also on February 23, 1998,
United Road Services, Inc. effected a 3.72 for 1 stock split for all
outstanding common shares. Common stock has been retroactively reflected in
the accompanying financial statements and related notes.

On December 18, 1997, United Road Services, Inc. authorized the issuance of
188,976 shares pursuant to the terms and conditions of a subscription
agreement. At December 31, 1997 United Road Services, Inc. had obtained
subscription agreements to purchase all authorized shares. These shares were
issued and fully paid on January 1, 1998 for $3.36 per share.

Loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding after giving effect to the stock-splits referred
to above. The weighted average number of shares used in the computation was
2,055,300 for period ended December 31, 1997.

Basic and diluted earnings per share for the nine months ended September 30,
1998 was calculated using weighted average shares of 8,799,686 and 8,937,442,
respectively.

(3) RELATED PARTY TRANSACTIONS

United Road Services, Inc. is indebted to two of the primary stockholders
under unsecured notes, bearing interest at 8.5% per annum. The notes and
unpaid interest were repaid subsequent to the offering.

(4) SUBSEQUENT EVENTS

(a) United Road Services, Inc. has signed definitive agreements to acquire
seven companies (Founding Companies) to be effective simultaneously with the
Offering and one company, Keystone Towing, Inc., to be acquired after the
Offering. The companies to be acquired are:

Northland Auto Transporters, Inc. and Northland Fleet Leasing, Inc.
Falcon Towing and Auto Delivery, Inc.,
Smith-Christensen Enterprises, Inc. and subsidiary ("City Towing, Inc."
d/b/a Quality Towing)
Caron Auto Works, Inc. and Caron Auto Brokers, Inc.
Absolute Towing and Transporting, Inc.
Keystone Towing, Inc.
ASC Transportation Services and subsidiary ("Auto Service Center" d/b/a ASC
Truck Service)
Milne Tow Service

(b) The aggregate consideration to acquire the Founding Companies is
approximately $27.8 million in cash and 2,375,741 in shares of Common Stock.
Additionally, upon consummation of the Keystone Towing, Inc. acquisition, the
stockholder will receive cash consideration of $4.5 million and 377,624 shares
of Common Stock.

(c) United Road Services, Inc. has received a commitment for a revolving
line of credit of $50 million. The funding is intended to be used for
acquisitions, capital expenditures, refinancing of debt not paid out of the
proceeds of the Offering and for general corporate purposes.

(d) Concurrently with the Acquisitions, United Road Services, Inc. may enter
into an agreement with the stockholders to lease the building used in United
Road Services, Inc.'s operation for negotiated amounts and terms.

F-18

UNITED ROAD SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(e) Prior to the Acquisitions, several Founding Companies and Keystone
Towing, Inc. intend to make distributions of certain net assets not to exceed
approximately $930,000.

(f) In January 1998, United Road Services, Inc. issued 29,760 shares to a
member of the board of directors for a purchase price of $3.36 per share. In
addition, options to purchase 215,000 shares were issued during January and
February 1998 to several employees of United Road Services, Inc. and outside
consultants. Stock options were issued at a price of $9.00 per share and vest
over a three-year period. Additional options to purchase 40,000 shares are
expected to be issued after the consummation of the Offering at the Offering
price per share.

(g) On May 6, 1998, United Road Services, Inc. effectively acquired the
Founding Companies as a result of the successful completion of the Offering,
as described in note 1(a).

(h) On November 19, 1998, United Road Services, Inc. entered into a Purchase
Agreement with Charter URS LLC ("Charterhouse") providing for the issuance to
Charterhouse of up to $75 million aggregate principal amount of 8% Convertible
Subordinated Debentures ("Debentures") due 2008. The Debentures are
convertible into United Road Services, Inc. Common Stock at an initial
exercise price of $15.00 per share, subject to adjustment as provided in the
Purchase Agreement. The conversion price exceeded the fair market value of the
Common Stock on the date of execution of the Purchase Agreement. United Road
Services, Inc. issued $43.5 million aggregate principal amount of Debentures
to Charterhouse at a first closing on December 7, 1998. Issuance of the
remaining $31.5 million aggregate principal amount of Debentures to
Charterhouse is subject to approval of the stockholders of United Road
Services, Inc.

(5) ACQUISITIONS (UNAUDITED)

On May 6, 1998, United Road Services, Inc. acquired the seven businesses
referred to as the Founding Companies. Between May 7, 1998 and September 30,
1998, United Road Services, Inc. acquired 25 other businesses for aggregate
consideration (excluding assumed indebtedness) of approximately $63.7 million
in cash and 1,708,907 shares of Common Stock with a recorded value of $28.8
million. The acquired companies are located throughout the United States, with
the majority located in the Western Region of the country. These companies are
engaged in the motor vehicle and equipment towing, recovery and transport
services. The acquisitions have been accounted for using the purchase method
of accounting. The excess of the purchase price over the fair value of the
assets acquired of $83.7 million has been recorded as goodwill and is being
amortized on a straight-line basis over 40 years.

The following unaudited pro forma financial information presents the
combined results of operations as if all the acquisitions that have been made
by United Road Services, Inc. through December 31, 1998, had occurred as of
the beginning of the period presented, after giving effect to certain
adjustments, including amortization of goodwill, additional depreciation
expense, reduction in salaries and bonuses to former shareholders and related
income tax effects. This pro forma financial information does not necessarily
reflect the results of operations that would have occurred had a single entity
operated during such periods.

YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1997 SEPTEMBER 30, 1998
---------------------------------------- ----------------------------------------
PROFORMA COMBINED PROFORMA COMBINED
FOUNDING COMPANIES FOUNDING COMPANIES
AND SELECTED ALL OTHER AND SELECTED ALL OTHER
ACQUIRED COMPANIES ACQUISITIONS TOTAL ACQUIRED COMPANIES ACQUISITIONS TOTAL
------------------ ------------ -------- ------------------ ------------ --------

Net revenue............. $143,431 $12,376 $155,807 $129,382 $11,344 $140,726
======== ======= ======== ======== ======= ========
Net income.............. $ 5,838 $ 506 $ 6,344 $ 6,963 $ 552 $ 7,515
======== ======= ======== ======== ======= ========
Diluted net income per
share.................. $ 0.53 $ 0.63
======== ========

United Road Services Inc. is committed to acquire one business with a
purchase price of $10.4 million in cash, 996,351 shares of common stock and an
assumption of $4.4 million of debt.

F-19

INDEPENDENT AUDITORS' REPORT

The Stockholder
Northland Auto Transporters, Inc. and
Northland Fleet Leasing, Inc.:

We have audited the accompanying combined balance sheets of Northland Auto
Transporters, Inc. and Northland Fleet Leasing, Inc. (collectively
"Northland") as of December 31, 1996 and 1997, and the related combined
statements of operations, stockholder's equity, and cash flows for each of the
years in the three-year period ended December 31, 1997. These combined
financial statements are the responsibility of Northland's management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the combined financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the combined
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall combined financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Northland
Auto Transporters, Inc. and Northland Fleet Leasing, Inc. as of December 31,
1996 and 1997, and the results of their combined operations and their combined
cash flows for each of the years in the three-year period ended December 31,
1997 in conformity with generally accepted accounting principles.

/s/ KPMG LLP

Albany, New York
January 28, 1998,
except as to note 14(b),
which is as of May 6, 1998

F-20

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

COMBINED BALANCE SHEETS

DECEMBER 31
--------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents.................. $ 432,949 $ 407,309 $ 806,933
Trade accounts receivable, net of allowance
for doubtful accounts of $40,000 in 1996
and $75,000 in 1997....................... 416,220 942,432 814,778
Accounts receivable from employees......... 4,955 3,445 40,822
Notes receivable........................... 35,068 17,453 20,933
Income tax receivable (note 7)............. 37,584 -- --
Prepaid and other current assets (note 2).. 74,302 113,558 76,555
Deferred income taxes (note 7)............. 9,000 17,000 17,000
---------- ---------- ----------
Total current assets..................... 1,010,078 1,501,197 1,777,021
Property and equipment, net (notes 3, 5 and
6).......................................... 2,204,802 3,924,055 3,886,336
Notes receivable............................. 44,044 31,468 14,347
Other assets................................. 8,862 8,426 8,426
---------- ---------- ----------
Total assets............................. $3,267,786 $5,465,146 $5,686,130
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of notes payable (note
5)........................................ $ 282,824 $ 346,859 $ 324,347
Current installments of obligations under
capital leases (note 6)................... 4,408 147,538 131,883
Payable to related parties (note 10)....... 159,505 53,849 47,756
Accounts payable........................... 210,998 188,064 204,058
Income taxes payable (note 7).............. -- 261,933 317,465
Accrued payroll and related costs.......... 18,062 52,676 105,949
Other accrued liabilities (note 4)......... 98,914 51,300 28,705
---------- ---------- ----------
Total current liabilities................ 774,711 1,102,219 1,160,163
Long-term liabilities:
Notes payable, excluding current
installments (note 5)..................... 318,382 279,963 219,074
Obligations under capital leases, excluding
current installments (note 6)............. 12,833 793,774 710,171
Deferred income taxes (note 7)............. 171,000 244,000 244,000
---------- ---------- ----------
Total liabilities........................ 1,276,926 2,419,956 2,333,408
---------- ---------- ----------
Stockholder's equity:
Common stock, $1 par value. Authorized,
issued and outstanding 2,000 shares in
1996 and 1997............................. 2,000 2,000 2,000
Retained earnings.......................... 1,988,860 3,043,190 3,350,722
---------- ---------- ----------
Total stockholder's equity............... 1,990,860 3,045,190 3,352,722
---------- ---------- ----------
Total liabilities and stockholder's
equity.................................. $3,267,786 $5,465,146 $5,686,130
========== ========== ==========

See accompanying notes to combined financial statements.

F-21

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

COMBINED STATEMENTS OF OPERATIONS

THREE-MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31
----------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ----------- ---------- ----------
(UNAUDITED)

Net revenue............. $4,671,164 $6,353,290 $10,159,113 $2,081,610 $3,057,307
Cost of revenue......... 3,683,119 5,132,828 7,341,748 1,237,243 2,451,066
---------- ---------- ----------- ---------- ----------
Gross profit........ 988,045 1,220,462 2,817,365 844,367 606,241
Selling, general and
administrative
expenses............... 663,723 874,559 1,378,872 201,071 281,946
---------- ---------- ----------- ---------- ----------
Income from
operations......... 324,322 345,903 1,438,493 643,296 324,295
---------- ---------- ----------- ---------- ----------
Other income (expense):
Interest expense...... (48,825) (79,384) (139,099) (18,122) (10,674)
Interest income....... 16,624 37,701 35,723 19,904 31,498
Gain (loss) on sale of
assets............... (14,540) -- (34,568) 23,000 60,127
Other................. 29,078 41,282 88,781 (24,183) --
---------- ---------- ----------- ---------- ----------
Income before income
taxes.............. 306,659 345,502 1,389,330 643,895 405,246
Income tax expense
(benefit)
(note 7)............... 31,400 (710) 335,000 155,258 97,714
---------- ---------- ----------- ---------- ----------
Net income.......... $ 275,259 $ 346,212 $ 1,054,330 $ 488,637 $ 307,532
========== ========== =========== ========== ==========

See accompanying notes to combined financial statements.

F-22

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

COMBINED STATEMENTS OF STOCKHOLDER'S EQUITY

TOTAL
COMMON RETAINED STOCKHOLDER'S
STOCK EARNINGS EQUITY
------ ---------- -------------

Balance at December 31, 1994................... $2,000 $1,367,389 $1,369,389
Net income--1995............................... -- 275,259 275,259
------ ---------- ----------
Balance at December 31, 1995................... 2,000 1,642,648 1,644,648
Net income--1996............................... -- 346,212 346,212
------ ---------- ----------
Balance at December 31, 1996................... 2,000 1,988,860 1,990,860
Net income--1997............................... -- 1,054,330 1,054,330
------ ---------- ----------
Balance at December 31, 1997................... 2,000 3,043,190 3,045,190
Net income--three-months ended March 31, 1998
(unaudited)................................... -- 307,532 307,532
------ ---------- ----------
Balance at March 31, 1998 (unaudited).......... $2,000 $3,350,722 $3,352,722
====== ========== ==========

See accompanying notes to combined financial statements.

F-23

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

COMBINED STATEMENTS OF CASH FLOWS

THREE-MONTHS
YEAR ENDED DECEMBER 31 ENDED MARCH 31
-------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- ---------- --------- ---------
(UNAUDITED)

Cash flows from
operating activities:
Net income............. $ 275,259 $ 346,212 $1,054,330 $ 488,637 $ 307,532
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation and
amortization........ 181,634 224,637 289,479 66,815 73,596
Deferred income
taxes............... (11,000) (6,000) 65,000 -- --
Loss (gain) on sale
of property and
equipment........... 14,540 -- 34,568 (23,000) (60,127)
Decrease (increase)
in trade accounts
receivable.......... (115,982) 138,452 (526,212) (275,875) 127,654
Decrease (increase)
in accounts
receivable from
employees........... 1,185 (4,100) 1,510 (24,420) (37,377)
Decrease (increase)
in income tax
receivable.......... -- -- 37,584 (5,791) --
Decrease (increase)
in prepaid and other
current assets...... (17,892) 16,331 (39,256) (23,374) 37,003
Increase (decrease)
in accounts payable. 716 23,236 (22,934) (28,080) 15,994
Increase in income
taxes payable....... -- -- 261,933 -- 55,532
Increase (decrease)
in accrued payroll
and related costs... (85,348) (14,137) 34,614 1,313 53,273
Increase (decrease)
in amounts payable
to related parties.. 20,552 16,410 (105,656) 16,303 (6,093)
Increase (decrease)
in other accrued
liabilities......... 25,946 2,880 (47,614) (12,816) (22,595)
--------- --------- ---------- --------- ---------
Net cash provided
by operating
activities........ 289,610 743,921 1,037,346 179,712 544,392
--------- --------- ---------- --------- ---------
Cash flows from
investing activities:
Purchases of property
and equipment......... (229,888) (395,881) (762,597) (271,868) (54,450)
Proceeds from sale of
equipment............. 53,044 -- 67,656 23,000 78,700
Decrease in notes
receivable............ 8,159 (30,984) 30,191 38,697 13,641
--------- --------- ---------- --------- ---------
Net cash (used in)
provided by
investing
activities........ (168,685) (426,865) (664,750) (210,171) 37,891
--------- --------- ---------- --------- ---------
Cash flows from
financing activities:
Proceeds from long-
term debt............. -- -- 24,629 -- 15,434
Principal payments on
long-term debt........ (139,745) (156,620) (317,543) (76,931) (98,835)
Principal payments on
obligations under
capital leases........ -- (1,351) (105,322) (603) (99,258)
--------- --------- ---------- --------- ---------
Net cash used in
financing
activities........ (139,745) (157,971) (398,236) (77,534) (182,659)
--------- --------- ---------- --------- ---------
Net (decrease)
increase in cash.. (18,820) 159,085 (25,640) (107,993) 399,624
Cash and cash
equivalents at
beginning of period.... 292,684 273,864 432,949 432,949 407,309
--------- --------- ---------- --------- ---------
Cash and cash
equivalents at end of
period................. $ 273,864 $ 432,949 $ 407,309 $ 324,956 $ 806,933
========= ========= ========== ========= =========
Supplemental disclosure
of cash flow
information:
Cash paid during the
year for:
Interest............. $ 48,825 $ 79,384 $ 139,099 $ 18,122 $ 10,674
========= ========= ========== ========= =========
Income taxes......... $ 7,024 $ 79,835 $ 6,480 $ 161,049 $ 42,182
========= ========= ========== ========= =========

See accompanying notes to combined financial statements.

F-24

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Northland Auto Transporters, Inc. and Northland Fleet Leasing, Inc.
(referred to collectively as "Northland") were founded in 1977 and 1992,
respectively. Northland's primary business is transporting vehicles for auto
auctions, leasing companies, auto dealers, manufacturers and individuals,
primarily in the Midwestern United States. Northland has three facilities in
Detroit. It operates approximately 55 vehicles. Northland Fleet Leasing, Inc.
owns a fleet of trucks and trailers and contracts out work primarily with
Northland Auto Transporters, Inc., and to a limited extent, third party
contractors.

(b) Principles of Combination

The combined financial statements include the financial statements of
Northland Auto Transporters, Inc., the auto hauling company, and Northland
Fleet Leasing, Inc., a truck leasing company. Northland Auto Transporters,
Inc. is a C-corporation while Northland Fleet Leasing, Inc. is an S-
corporation. All sales relating to intercompany leasing arrangements have been
eliminated. Both entities have the same management and principal stockholder
ownership.

Northland operates as one segment related to the transportation of vehicles
and equipment for customers.

Northland's revenue is derived from customers who require transportation of
vehicles and equipment. Transport revenue is recognized upon the delivery of
the vehicles to their final destination. Expenses related to the generation of
revenue are recognized as incurred.

(d) Cash and Cash Equivalents

Cash and cash equivalents of $432,949 and $407,309 at December 31, 1996 and
1997, respectively, consist of bank accounts and certificates of deposit with
an initial term of less than three months. For purposes of the statements of
cash flows, Northland considers all highly liquid debt instruments with
original maturities of three months or less to be cash equivalents.

(e) Property and Equipment

Property and equipment are stated at cost. Plant and equipment under capital
leases are stated at the present value of minimum lease payments. Depreciation
is determined for financial statement purposes using the straight-line method
over the estimated useful lives of the individual assets. Accelerated methods
of depreciation have been used for income tax purposes. For financial
statement purposes, Northland provides for depreciation of property and
equipment over the following estimated useful lives.

Transportation equipment....................................... 10-20 years
Furniture and Fixtures......................................... 7 years
Office Equipment............................................... 5 years
Automobiles.................................................... 5 years

(f) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Northland on bank loans with
similar terms and maturities, the fair value of Northland's financial
instruments approximates their carrying values.

F-25

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(g) Income Taxes

Income taxes are accounted for under the asset and liability method for
Northland Auto Transporters, Inc. 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, and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted 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 of a change in tax rates is recognized in income in the period
that includes the enactment date.

Northland Fleet Leasing, Inc. is a subchapter S-corporation. As such, all
taxable events are recorded by the stockholder currently on his personal tax
returns.

(h) Use of Estimates

Management of Northland has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

(i) Interim Financial Statements

(2) PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consists of:

DECEMBER 31
---------------- MARCH 31,
1996 1997 1998
------- -------- -----------
(UNAUDITED)

Prepaid insurance............................. $14,818 $ 28,172 $17,638
Prepaid vehicle registration.................. 25,978 35,778 23,852
Deposits on trucks............................ 12,403 16,633 29,843
Miscellaneous advances........................ 12,716 9,320 205
Prepaid property and other taxes.............. 8,387 23,655 5,017
------- -------- -------
$74,302 $113,558 $76,555
======= ======== =======

(3) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

DECEMBER 31
---------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)

Transportation equipment.............. $2,745,094 $4,457,178 $4,336,121
Furniture and fixtures................ 123,585 147,035 141,338
Office equipment...................... 34,449 34,244 34,244
Automobiles........................... 64,781 126,926 124,009
---------- ---------- ----------
Total............................... 2,967,909 4,765,383 4,635,712
Less accumulated depreciation and
amortization......................... (763,107) (841,328) (749,376)
---------- ---------- ----------
$2,204,802 $3,924,055 $3,886,336
========== ========== ==========

Depreciation of property and equipment in 1995, 1996 and 1997 totaled
$181,198, $224,201 and $289,043, respectively.

F-26

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(4) OTHER ACCRUED LIABILITIES

Other accrued liabilities consists of:

DECEMBER 31
--------------- MARCH 31,
1996 1997 1998
------- ------- -----------
(UNAUDITED)

Accrued highway use tax............................. $ 9,487 $14,300 $ 4,247
Accrued insurance................................... 12,324 6,880 5,397
Accrued profit sharing.............................. 64,196 -- --
Other............................................... 12,907 30,120 19,061
------- ------- -------
$98,914 $51,300 $28,705
======= ======= =======

(5) INDEBTEDNESS

Northland's long-term debt consisted of the following:

DECEMBER 31
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
(UNAUDITED)

Note payable to Navistar Financial Corp.,
payable in monthly installments of $1,188,
including interest at 8.755%, maturing June
2000. Secured by equipment. ................ $ 43,095 $ 31,081 $ 43,113
Note payable to First of America Bank,
payable in monthly installments of $11,029,
including interest at 8.25%, maturing May
1999. Secured by equipment. ................ 288,698 176,248 146,308
Note payable to First of America Bank,
payable in monthly principal installments of
$7,320, plus interest at .75% above the
prime lending rate (9.0% and 9.25% at
December 31, 1996 and 1997, respectively),
maturing July 1998. Secured by equipment. .. 141,143 49,628 25,492
Note payable to First of America Bank,
payable in monthly installments of $6,290,
including interest at 8.25%, maturing
October 1998. Secured by equipment. ........ 128,270 60,948 28,150
Note payable to First of America Bank,
payable in monthly principal installments of
$6,771, including interest at the Bank's
base lending rate (8.50% at December 31,
1997), maturing April 10, 2001. secured by
equipment. ................................. -- 288,656 281,234
Various notes payable secured by equipment... -- 20,261 19,124
--------- --------- ---------
Total long-term debt....................... 601,206 626,822 543,421
Less installments due within one year........ (282,824) (346,859) (324,347)
--------- --------- ---------
Long-term debt, excluding current
installments.............................. $ 318,382 $ 279,963 $ 219,074
========= ========= =========

Annual maturities of long-term debt for the next four years are as follows:

1998.............................................................. $346,859
1999.............................................................. 147,902
2000.............................................................. 87,161
2001.............................................................. 44,900
--------
$626,822
========

F-27

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(6) LEASES

Northland leases equipment under capital leases which expire in stages from
August 2000 to July 2002.

Northland leases its operating facility from a third party under a
cancelable operating lease. Rent expense in 1995, 1996 and 1997 was $40,054,
$58,515 and $41,700, respectively.

Following is a summary of transportation equipment held under capital
leases:

DECEMBER 31
------------------- MARCH 31,
1996 1997 1998
------- ---------- -----------
(UNAUDITED)

Transportation equipment................. $18,000 $1,047,298 $1,047,298
Less accumulated amortization............ (3,600) (298,619) (372,374)
------- ---------- ----------
$14,400 $ 748,679 $ 674,924
======= ========== ==========

Future minimum capital lease payments as of December 31, 1997 are:

YEAR ENDING DECEMBER 31, CAPITAL
------------------------ LEASES

1998........................................................... $ 213,228
1999........................................................... 216,655
2000........................................................... 214,758
2001........................................................... 210,973
2002........................................................... 298,065
----------
Total........................................................ 1,153,679
Less amount representing interest.............................. (212,367)
----------
Present value of net minimum capital lease payments............ $ 941,312
==========

(7) INCOME TAXES

Income tax expense (benefit) for the years ended December 31, 1995, 1996 and
1997 consists of:

1995 1996 1997

Current:
Federal...................................... $ 42,400 $ 5,290 $270,000
Deferred....................................... (11,000) (6,000) 65,000
-------- ------- --------
$ 31,400 $ (710) $335,000
======== ======= ========

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate.

1995 1996 1997

Computed expected tax expense............. $104,264 $ 117,471 $ 472,372
Effect of earnings from S-corporation..... (77,750) (123,441) (141,644)
Non-deductible meals and entertainment
expenses................................. 4,886 5,260 4,272
-------- --------- ---------
$ 31,400 $ (710) $ 335,000
======== ========= =========

F-28

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities as of December 31, 1996 and 1997 are
presented below:

1996 1997

Deferred tax assets:
Allowance for doubtful accounts................... $ 9,000 $ 17,000
Deferred tax liabilities:
Property and equipment, due to differences in
depreciation lives and methods................... (171,000) (244,000)
--------- ---------
Net deferred tax liability...................... $(162,000) $(227,000)
========= =========

At December 31, 1995, the net deferred tax liability was $168,000.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies, as
well as carryback opportunities, in making this assessment. Based upon the
level of historical taxable income, projections for future taxable income and
carryback opportunities over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not Northland will
realize the benefits of these deductible differences. The amount of the
deferred tax asset considered realizable, however, could be reduced in the
near term if estimates of future taxable income are reduced.

(8) NON-CASH TRANSACTIONS

During 1995, 1996 and 1997, Northland leased transportation equipment
totaling $200,000, $360,523 and, $1,347,923 respectively, through capital
leases with several lending institutions.

(9) EMPLOYEE BENEFITS

Northland has a retirement savings plan pursuant to section 401(k) of the
Internal Revenue Code that is available to all employees with at least one
year of service to Northland and that are at least 21 years of age. Eligible
participants may contribute up to 15% of their compensation. Northland
provides discretionary matching contributions to the Plan which amounted to,
$12,985, $64,196 and $0 in 1995, 1996 and 1997, respectively.

(10) RELATED PARTY TRANSACTIONS

Northland has borrowed funds from its principal stockholder and has
outstanding notes payable as of December 31, 1996 and 1997 of $159,505 and
$53,849. Such amounts are included in notes payable on the combined balance
sheets. The notes accrue interest at 8%, compounded monthly.

(11) CONTINGENT LIABILITIES

Various legal claims arise against Northland during the normal course of
business. In the opinion of management, liabilities, if any, arising from
proceedings would not have a material effect on the financial statements.

(12) CONCENTRATION OF BUSINESS RISKS

Two customers, GE Capital and C.T. Services, accounted for a combined 10.7%
and 16.4% of Northland's sales in 1996 and 1997, respectively. The loss of one
or both of these customers could significantly effect Northland's performance.

F-29

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(13) ALLOWANCE FOR DOUBTFUL ACCOUNTS

During 1995, 1996 and 1997, Northland recorded provisions for the allowance
for doubtful accounts in the amounts of $32,000, $30,000 and $52,000,
respectively. During 1995, 1996 and 1997, Northland wrote-off an average of
$17,000 in each year.

(14) SUBSEQUENT EVENT

(a) During February 1998, the stockholder entered into a definitive
agreement to sell Northland to United Road Services, Inc. The transaction,
effected through a combination of cash and common stock of United Road
Services, Inc., is contingent and effective upon the initial public offering
of the common stock of United Road Services, Inc. The anticipated selling
price of Northland exceeds its net assets as of December 31, 1997.

(b) On May 6, 1998, United Road Services, Inc. effectively acquired
Northland as a result of the successful completion of the initial public
offering of the common stock of United Road Services, Inc.

F-30

INDEPENDENT AUDITORS' REPORT

The Stockholder
Falcon Towing and Auto Delivery, Inc.:

We have audited the accompanying balance sheets of Falcon Towing and Auto
Delivery, Inc. ("Falcon") as of December 31, 1996 and 1997, and the related
statements of operations, stockholder's equity, and cash flows for each of the
years in the three-year period ended December 31, 1997. These financial
statements are the responsibility of Falcon's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Falcon Towing and Auto
Delivery, Inc. as of December 31, 1996 and 1997 and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1997 in conformity with generally accepted accounting
principles.

/s/ KPMG LLP

Albany, New York
January 17, 1998,
except as to note 11(c),
which is as of May 6, 1998

F-31

FALCON TOWING AND AUTO DELIVERY, INC.

BALANCE SHEETS

DECEMBER 31
---------------------
MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash....................................... $ 23,505 $ 3,527 $ 3,024
Trade accounts receivable, net of allowance
for doubtful accounts of $67,650 in 1996
and $188,500 in 1997...................... 476,896 717,560 563,353
Inventories................................ 24,868 26,068 26,068
Prepaid and other current assets (note 2).. 46,537 131,328 149,729
---------- ---------- ----------
Total current assets..................... 571,806 878,483 742,174
Property and equipment, net (notes 3, 5 and
6).......................................... 1,656,635 2,423,368 2,453,169
---------- ---------- ----------
Total assets............................. $2,228,441 $3,301,851 $3,195,343
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of long-term debt
(note 5).................................. $ 123,722 $ 264,081 $ 355,393
Current installments of obligations under
capital leases
(note 6).................................. 252,527 368,590 368,590
Borrowings under lines of credit (note 5).. 36,150 47,121 45,316
Accounts payable........................... 178,357 546,301 595,073
Accrued payroll and related costs.......... 57,000 67,701 67,701
Income taxes payable (note 8).............. 98,698 207,399 216,261
Other accrued liabilities (note 4)......... 137,600 214,979 219,959
---------- ---------- ----------
Total current liabilities................ 884,054 1,716,172 1,868,293
Long-term liabilities:
Long-term debt, excluding current
installments (note 5)..................... 225,386 250,196 72,831
Obligations under capital leases, excluding
current installments (note 6)............. 630,677 716,288 624,140
Deferred income taxes (note 8)............. 11,733 10,555 10,555
---------- ---------- ----------
Total liabilities........................ 1,751,850 2,693,211 2,575,819
---------- ---------- ----------
Stockholder's equity:
Common stock, no par or stated value.
Authorized 1,000 shares; issued and
outstanding 750 shares in 1996 and 1997... -- -- --
Retained earnings.......................... 476,591 608,640 619,524
---------- ---------- ----------
Total stockholder's equity............... 476,591 608,640 619,524
---------- ---------- ----------
Total liabilities and stockholder's
equity.................................. $2,228,441 $3,301,851 $3,195,343
========== ========== ==========

See accompanying notes to financial statements.

F-32

FALCON TOWING AND AUTO DELIVERY, INC.

STATEMENTS OF OPERATIONS

THREE-MONTHS
YEAR ENDED DECEMBER 31 ENDED MARCH 31
---------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ----------
(UNAUDITED)

Net revenue............. $4,351,847 $6,203,104 $7,784,766 $1,697,166 $1,965,856
Cost of revenue......... 3,492,248 4,638,239 5,955,423 1,265,627 1,430,094
---------- ---------- ---------- ---------- ----------
Gross profit........ 859,599 1,564,865 1,829,343 431,539 535,762
Selling, general and
administrative
expenses............... 952,260 1,190,631 1,614,386 420,944 505,544
---------- ---------- ---------- ---------- ----------
Income (loss) from
operations......... (92,661) 374,234 214,957 10,595 30,218
---------- ---------- ---------- ---------- ----------
Other income (expense):
Interest expense...... (77,176) (129,150) (147,700) (35,021) (10,472)
Gain (loss) on sale of
equipment............ (417) -- 98,735 (9,323) --
Other................. 38,508 12,167 73,580 16,041 --
---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes....... (131,746) 257,251 239,572 (17,708) 19,746
Income tax expense
(benefit) (note 8)..... 15,707 94,723 107,523 (7,947) 8,862
---------- ---------- ---------- ---------- ----------
Net income (loss)... $ (147,453) $ 162,528 $ 132,049 $ (9,761) $ 10,884
========== ========== ========== ========== ==========

See accompanying notes to financial statements.

F-33

FALCON TOWING AND AUTO DELIVERY, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY

TOTAL
COMMON RETAINED STOCKHOLDER'S
STOCK EARNINGS EQUITY
------ --------- -------------

Balance at December 31, 1994................... $-- $ 461,516 $ 461,516
Net loss--1995................................. -- (147,453) (147,453)
---- --------- ---------
Balance at December 31, 1995................... -- 314,063 314,063
Net income--1996............................... -- 162,528 162,528
---- --------- ---------
Balance at December 31, 1996................... -- 476,591 476,591
Net income--1997............................... -- 132,049 132,049
---- --------- ---------
Balance at December 31, 1997................... -- 608,640 608,640
Net loss--three-months ended March 31, 1998
(unaudited)................................... -- 10,884 10,884
---- --------- ---------
Balance at March 31, 1998 (unaudited).......... $-- $ 619,524 $ 619,524
==== ========= =========

See accompanying notes to financial statements.

F-34

FALCON TOWING AND AUTO DELIVERY, INC.

STATEMENTS OF CASH FLOWS

THREE-MONTHS
YEAR ENDED DECEMBER 31 ENDED MARCH 31
------------------------------- ------------------
1995 1996 1997 1997 1998
--------- --------- --------- -------- --------
(UNAUDITED)

Cash flows from operating
activities:
Net income (loss)....... $(147,453) $ 162,528 $ 132,049 $ (9,761) $ 10,884
Adjustments to
reconcile net income
(loss) to net cash
provided by operating
activities:
Depreciation and
amortization......... 343,595 431,828 621,673 139,697 121,399
Deferred income taxes. 15,707 (3,975) (1,178) -- --
(Gain) loss on sale of
equipment............ 417 -- (98,735) 9,323 --
Decrease (increase) in
trade accounts
receivable........... (1,169) (236,557) (240,664) (2,334) 154,207
Increase in
inventories.......... -- -- (1,200) (1,200) --
Decrease (increase) in
prepaid and other
current assets....... (10,524) (9,236) (84,791) 1,817 (18,401)
Increase (decrease) in
accounts payable..... 104,440 (8,097) 367,944 58,796 48,772
Increase in accrued
payroll and related
costs................ 71,443 53,937 10,701 -- --
Increase (decrease) in
income taxes payable. (20,542) 98,698 108,701 (7,947) 8,862
Increase (decrease) in
other accrued
liabilities.......... 7,434 (12,591) 77,379 434 4,980
--------- --------- --------- -------- --------
Net cash provided by
operating
activities......... 363,348 476,535 891,879 188,825 330,703
--------- --------- --------- -------- --------
Cash flows used in
investing activities:
Purchases of property
and equipment.......... (290,177) (169,861) (919,049) (93,685) (151,200)
Proceeds from sale of
property and
equipment.............. -- -- 141,100 -- --
--------- --------- --------- -------- --------
Net cash used in
investing
activities......... (290,177) (169,861) (777,949) (93,685) (151,200)
--------- --------- --------- -------- --------
Cash flows from financing
activities:
Proceeds from long-term
debt................... 75,047 -- 384,609 -- --
Payments on notes
payable and capital
leases................. (120,031) (282,833) (529,488) (122,471) (178,201)
Net borrowings under
lines of credit........ (36,066) (2,784) 10,971 8,259 (1,805)
--------- --------- --------- -------- --------
Net cash used in
financing
activities......... (81,050) (285,617) (133,908) (114,212) (180,006)
--------- --------- --------- -------- --------
Net (decrease) increase
in cash................. (7,879) 21,057 (19,978) (19,072) (503)
Cash at beginning of
period.................. 10,327 2,448 23,505 23,505 3,527
--------- --------- --------- -------- --------
Cash at end of period.... $ 2,448 $ 23,505 $ 3,527 $ 4,433 $ 3,024
========= ========= ========= ======== ========
Supplemental disclosure
of cash flow
information:
Cash paid during the year
for:
Interest................ $ 74,280 $ 125,435 $ 144,806 $ 35,021 $ 10,472
========= ========= ========= ======== ========
Income taxes............ $ -- $ 12,591 $ -- $ -- $ --
========= ========= ========= ======== ========

See accompanying notes to financial statements.

F-35

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Falcon Towing and Auto Delivery, Inc. ("Falcon") was founded in 1985.
Falcon's primary business is transporting vehicles for dealers, leasing
companies, auction companies and long-haul transporters in the Western United
States. Falcon has facilities in Los Angeles, San Francisco and Phoenix. It
operates approximately 50 vehicles.

(b) Revenue Recognition

Falcon operates as one segment related to the transportation of vehicles and
equipment for customers.

Falcon's revenue is derived from customers who require transport of vehicles
and equipment. Transport revenue is recognized upon the delivery of the
vehicles and equipment to their final destination. Expenses related to the
generation of revenue are recognized as incurred.

Inventories, which consist principally of replacement tires and truck parts,
are stated at the lower of cost or market.

(d) Property and Equipment

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes,
Falcon provides for depreciation of property and equipment over the following
estimated useful lives:

Transportation and towing equipment................................ 5 years
Machinery and equipment............................................ 5 years
Leasehold improvements............................................. 5 years
Furniture and fixtures............................................. 5 years
Office equipment................................................... 5 years

(e) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Falcon on bank loans with
similar terms and maturities, the fair value of Falcon's financial instruments
approximates their carrying values.

(f) Income Taxes

Income taxes are accounted for under the asset and liability method.
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, and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted 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 of a change in tax
rates is recognized in income in the period that includes the enactment date.

(g) Use of Estimates

Management of Falcon has made a number of estimates and assumptions relating
to the reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare these financial statements in conformity
with generally accepted accounting principles. Actual results could differ
from those estimates.

F-36

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(h) Interim Financial Statements

(2) PREPAID EXPENSES

Prepaid and other current assets consists of:

DECEMBER 31
----------------
1996 1997
------- --------

Prepaid vehicle registration............................. $ -- $ 64,790
Prepaid insurance........................................ 19,414 27,340
Other.................................................... 27,123 39,198
------- --------
$46,537 $131,328
======= ========

(3) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

DECEMBER 31
------------------------ MARCH 31,
1996 1997 1998
----------- ----------- -----------
(UNAUDITED)

Transportation and towing
equipment......................... $ 2,970,070 $ 4,124,483 $ 4,275,683
Machinery and equipment............ 70,296 104,411 104,411
Leasehold improvements............. 26,489 43,653 43,653
Furniture and fixtures............. 10,448 14,298 14,298
Office equipment................... 19,225 19,225 19,225
Construction-in-progress........... -- 33,000 33,000
----------- ----------- -----------
Total............................ 3,096,528 4,339,070 4,490,270
Less accumulated depreciation and
amortization...................... (1,439,893) (1,915,702) (2,037,101)
----------- ----------- -----------
$ 1,656,635 $ 2,423,368 $ 2,453,169
=========== =========== ===========

Depreciation and amortization of property and equipment in 1995, 1996 and
1997 totaled $343,595, $431,828 and $621,673, respectively.

(4) OTHER ACCRUED LIABILITIES

Other accrued liabilities consists of:

DECEMBER 31
-----------------
1996 1997
-------- --------

Accrued insurance premiums.............................. $ 20,248 $ 17,712
Accrued fuel expenses................................... 31,827 80,055
Accrued commissions..................................... 43,000 51,000
Accrued vacation........................................ 18,000 21,000
Accrued 401(k) contributions............................ -- 17,983
Other................................................... 24,525 27,229
-------- --------
$137,600 $214,979
======== ========

F-37

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(5) INDEBTEDNESS

Falcon has available a $50,000 line of credit with $36,150 and $47,121
outstanding at December 31, 1996 and 1997, respectively, secured by the assets
of Falcon and a guarantee by Falcon's stockholder. Interest is payable at
11.5%.

Falcon's long-term debt consists of:

DECEMBER 31
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
(UNAUDITED)

Notes payable to banks payable in
monthly installments ranging from
$1,024 to $2,909, including interest
ranging from 9.0% to 10.5%, and
maturing at dates ranging from April,
1998 to April, 2000. Secured by
vehicles and equipment. ............... $ 349,108 $ 514,277 $428,224
Less installments due within one year... (123,722) (264,081) (355,393)
--------- --------- --------
Long-term debt, excluding current
installments........................... $ 225,386 $ 250,196 $ 72,831
========= ========= ========

The aggregate maturities of long-term debt subsequent to December 31, 1997
are as follows:

1998.............................................................. $264,081
1999.............................................................. 166,798
2000.............................................................. 83,398
--------
$514,277
========

(6) LEASES

Falcon is the lessee of vehicles under a number of capital leases which
expire in stages from April 1999 to November 2000.

Following is a summary of equipment held under capital leases:

DECEMBER 31
----------------------- MARCH 31,
1996 1997 1998
---------- ----------- -----------
(UNAUDITED)

Transportation and towing
equipment......................... $1,612,687 $ 2,124,409 $ 2,124,409
Less accumulated amortization...... (703,928) (1,036,670) (1,127,996)
---------- ----------- -----------
$ 908,759 $ 1,087,739 $ 996,413
========== =========== ===========

Falcon leases the land and buildings used for its operations at the El Monte
and Phoenix locations under lease agreements with its sole stockholder. These
agreements provide for annual rental payments of $288,000 beginning December
1996 and $37,000 beginning March 1997 at the El Monte and Phoenix locations,
respectively. Rent paid to the stockholder in 1995, 1996 and 1997 was $0,
$24,000 and $319,000, respectively. Additionally, Falcon has a cancelable
lease for the land and building used for its operations at the Newark, CA
location from an unrelated third party for annual rental payments of
approximately $48,000. The leases are classified as operating leases. Falcon
is responsible for all operating costs related to the properties.

Total rent expense for 1995, 1996 and 1997 was $240,003, $265,103 and
$438,003, respectively.

F-38

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Future minimum lease payments under noncancellable operating leases (with
initial or remaining lease terms in excess of one year) and future minimum
capital lease payments as of December 31, 1997 are:

CAPITAL OPERATING
YEAR ENDING DECEMBER 31, LEASES LEASES

1998............................................... $ 473,698 $ 325,000
1999............................................... 400,408 325,000
2000............................................... 254,520 325,000
2001............................................... 14,112 277,000
2002............................................... -- 3,100
---------- ----------
Total............................................ 1,142,738 $1,255,100
==========
Less amount representing interest.................. (57,860)
----------
Present value of net minimum capital lease
payments........................................ $1,084,878
==========

(7) NON-CASH TRANSACTIONS

During 1995, 1996 and 1997, Falcon financed certain purchases of vehicles
and equipment totaling $571,137, $671,086 and $511,722, respectively.

(8) INCOME TAXES

Income tax expense for the years ended December 31, 1995, 1996 and 1997
consists of:

1995 1996 1997

Current:
Federal....................................... $ -- $77,500 $ 86,271
State......................................... -- 21,198 22,430
------- ------- --------
-- 98,698 108,701
Deferred........................................ 15,707 (3,975) (1,178)
------- ------- --------
$15,707 $94,723 $107,523
======= ======= ========

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate.

1995 1996 1997

Computed expected tax (benefit) expense...... $(44,794) $ 87,465 $ 81,454
State income taxes (benefit), net of Federal
benefit..................................... (8,087) 13,991 14,803
Non-deductible meals and entertainment
expenses.................................... 1,428 354 2,116
Tax penalties and disallowances.............. -- 5,724 3,898
Net operating loss carryforward for which no
benefit will be derived..................... 73,039 -- --
Basis difference in fixed assets which will
not result in a tax benefit or loss......... (5,879) (12,811) 5,252
-------- -------- --------
$ 15,707 $ 94,723 $107,523
======== ======== ========

The tax effects of temporary differences that give rise to deferred tax
liabilities as of December 31, 1995, 1996 and 1997 relate to fixed assets
caused by differences in depreciation lives and methods and total $15,707,
$11,733 and $10,555, respectively.

F-39

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(9) EMPLOYEE BENEFITS

Falcon has a retirement savings plan pursuant to section 401(k) of the
Internal Revenue Code that is available to all employees with at least one
year of service to Falcon and that are at least twenty-one years of age.
Falcon provides matching funds of 25% of eligible contributions to the Plan
which amounted to $0, $0 and $18,000 in 1995, 1996 and 1997, respectively.

(10) RELATED PARTY TRANSACTIONS

Falcon leases land and buildings, located at the El Monte and Phoenix
locations, from the sole stockholder (see note 6).

(11) SUBSEQUENT EVENT

(a) During February 1998, the stockholder entered into a definitive
agreement to sell Falcon to United Road Services, Inc. The transaction,
effected through a combination of cash and common stock of United Road
Services, Inc., is contingent and effective upon the initial public offering
of the common stock of United Road Services, Inc. The anticipated selling
price of Falcon exceeds its net assets as of December 31, 1997.

(b) Concurrently with the acquisition, United Road Services, Inc. will enter
into agreements with the stockholder to lease land and buildings used in
Falcon's operations for negotiated amounts and terms.

(c) On May 6, 1998, United Road Services, Inc. effectively acquired Falcon
as a result of the successful completion of the initial public offering of the
common stock of United Road Services, Inc.

F-40

INDEPENDENT AUDITORS' REPORT

The Stockholders
Smith-Christensen Enterprises, Inc.:

We have audited the accompanying consolidated balance sheets of Smith-
Christensen Enterprises, Inc. and subsidiary (City Towing, Inc. d/b/a Quality
Towing) ("Quality") as of January 31, 1997 and December 31, 1997, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years ended January 31, 1996 and 1997 and for the
twelve-month period ended December 31, 1997. These consolidated financial
statements are the responsibility of Quality's management. Our responsibility
is to express an opinion on these consolidated financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Smith-Christensen
Enterprises, Inc. and subsidiary (City Towing, Inc. d/b/a Quality Towing) as
of January 31, 1997 and December 31, 1997, and the results of their operations
and their cash flows for each of the years ended January 31, 1996 and 1997 and
for the twelve-month period ended December 31, 1997 in conformity with
generally accepted accounting principles.

/s/ KPMG LLP

Albany, New York
January 16, 1998,
except as to note 11(c),
which is as of May 6, 1998

F-41

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

JANUARY 31, DECEMBER 31, MARCH 31,
1997 1997 1998
----------- ------------ -----------
(UNAUDITED)

ASSETS
Current assets:
Cash.................................... $ 180,269 $ 266,687 $ 308,414
Trade accounts receivable, net of
allowance for doubtful accounts of
$26,850 and $75,850 at January 31, 1997
and December 31, 1997, respectively.... 88,518 277,966 283,677
Accounts receivable from related parties
(note 9)............................... 10,665 50,151 50,151
Due from employees...................... 19,124 22,053 15,955
Inventories............................. 20,661 9,950 29,372
Prepaid expenses (note 2)............... 30,048 19,680 46,988
Other current assets.................... 900 900 900
---------- ---------- ----------
Total current assets.................. 350,185 647,387 735,457
Property, plant and equipment, net (notes
3 and 5)................................. 2,653,243 2,877,229 3,165,423
Accounts receivable from related parties
(note 9)................................. 157,294 831,733 454,441
Other assets, net (note 4)................ 118,908 98,905 98,905
---------- ---------- ----------
Total assets.......................... $3,279,630 $4,455,254 $4,454,226
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt
(note 5)............................... $ 447,875 $ 541,836 $ 522,470
Accounts payable........................ 38,278 68,203 163,506
Accrued payroll and related costs....... 28,757 85,563 21,832
Income taxes payable (note 7)........... 60,863 345,339 336,039
Other accrued expenses.................. 5,305 3,110 25,418
---------- ---------- ----------
Total current liabilities............. 581,078 1,044,051 1,069,265
---------- ---------- ----------
Long-term liabilities:
Long-term debt, excluding current
installments (note 5).................. 2,415,340 2,188,038 2,188,038
Deferred income taxes (note 7).......... 193,379 312,721 312,721
---------- ---------- ----------
Total liabilities..................... 3,189,797 3,544,810 3,570,024
---------- ---------- ----------
Stockholders' equity:
Common stock, no par value.
Authorized 2,500 shares; issued and
outstanding 2,425 shares............... 20,000 20,000 20,000
Retained earnings....................... 69,833 890,444 864,202
---------- ---------- ----------
Total stockholders' equity............ 89,833 910,444 884,202
---------- ---------- ----------
Total liabilities and stockholders'
equity............................... $3,279,630 $4,455,254 $4,454,226
========== ========== ==========

See accompanying notes to the consolidated financial statements.

F-42

SMITH-CHRISTENSEN ENTERPRISES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

TWELVE-MONTH THREE-MONTH PERIODS
PERIOD ENDED ENDED MARCH 31
YEAR ENDED YEAR ENDED DECEMBER 31, 1997 ----------------------
JANUARY 31, 1996 JANUARY 31, 1997 (NOTE 1(B)) 1997 1998
---------------- ---------------- ----------------- ---------- ----------
(UNAUDITED)

Net revenue............. $4,395,762 $5,395,475 $6,802,474 $1,533,327 $1,954,670
Cost of revenue......... 2,579,463 3,214,772 3,849,138 1,014,657 1,223,785
---------- ---------- ---------- ---------- ----------
Gross profit........ 1,816,299 2,180,703 2,953,336 518,670 730,885
Selling, general and
administrative
expenses............... 1,436,488 1,194,716 1,389,707 234,887 520,620
---------- ---------- ---------- ---------- ----------
Income from
operations......... 379,811 985,987 1,563,629 283,783 210,265
---------- ---------- ---------- ---------- ----------
Other income (expense):
Interest expense...... (258,554) (325,370) (277,436) (70,352) (64,460)
Interest income....... -- -- 4,524 -- --
Other................. (25,005) 131,721 (27,375) (127,032) (181,347)
---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes....... 96,252 792,338 1,263,342 86,399 (35,542)
Income tax expense
(benefit) (note 7)..... 103,752 277,623 440,978 30,240 (9,300)
---------- ---------- ---------- ---------- ----------
Net income (loss)... $ (7,500) $ 514,715 $ 822,364 $ 56,159 $ (26,242)
========== ========== ========== ========== ==========

See accompanying notes to the consolidated financial statements.

F-43

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

TOTAL
RETAINED STOCKHOLDERS'
COMMON EARNINGS EQUITY
STOCK (DEFICIT) (DEFICIT)
------- --------- -------------

Balance at January 31, 1995................... $20,000 $(437,382) $(417,382)
Net loss--year ended January 31, 1996......... -- (7,500) (7,500)
------- --------- ---------
Balance at January 31, 1996................... 20,000 (444,882) (424,882)
Net income--year ended January 31, 1997....... -- 514,715 514,715
------- --------- ---------
Balance at January 31, 1997................... 20,000 69,833 89,833
Net income--twelve-months ended December 31,
1997......................................... -- 822,364 822,364
Net loss--month of January 1997 (note 1(b))... -- (1,753) (1,753)
------- --------- ---------
Balance at December 31, 1997.................. 20,000 890,444 910,444
Net loss--three-month periods ended March 31,
1998 (unaudited)............................. -- (26,242) (26,242)
------- --------- ---------
Balance at March 31, 1998 (unaudited)......... $20,000 $ 864,202 $ 884,202
======= ========= =========

See accompanying notes to the consolidated financial statements.

F-44

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE-MONTH
PERIODS ENDED
TWELVE-MONTH MARCH 31
YEAR ENDED YEAR ENDED PERIOD ENDED ------------------
JANUARY 31, 1996 JANUARY 31, 1997 DECEMBER 31, 1997 1997 1998
---------------- ---------------- ----------------- -------- --------
(UNAUDITED)

Cash flows from
operating activities:
Net income (loss)..... $ (7,500) $ 514,715 $ 822,364 $ 56,159 $(26,242)
Adjustments to
reconcile net income
(loss) to net cash
provided by
operating
activities:
Net loss for the
month of January
1997 (note 1(b))... -- -- (1,753) -- --
Depreciation and
amortization....... 237,118 322,628 268,732 67,183 23,638
Deferred income
taxes.............. 151,090 106,198 119,342 -- --
Decrease (increase)
in trade accounts
receivable......... (74,638) 63,597 (189,448) 141,456 (5,711)
Increase in due from
related parties.... (6,512) (10,285) (39,486) -- --
Decrease (increase)
in due from
employees.......... -- -- (2,929) -- 6,098
Decrease (increase)
in inventories..... -- (20,661) 10,711 5,175 (19,422)
Decrease (increase)
in prepaid
expenses........... (29,858) 7,609 10,368 (262,315) (27,308)
Decrease (increase)
in receivables from
related parties.... (34,549) (297,009) (674,439) -- 377,292
Increase (decrease)
in accounts
payable............ 65,853 (49,744) 29,925 (15,789) 95,303
Increase (decrease)
in accrued payroll
and related costs.. 62,316 (58,732) 56,806 52,697 (63,731)
Increase (decrease)
in income taxes
payable............ (30,809) 75,650 284,476 (2,214) (9,300)
(Decrease) increase
in other accrued
expenses........... 6,130 (1,785) (2,195) -- 22,308
--------- --------- --------- -------- --------
Net cash provided
by operating
activities....... 338,641 652,181 692,474 42,352 372,925
--------- --------- --------- -------- --------
Cash flows from
investing activities:
Purchases of
property, plant and
equipment............ (700,708) (493,663) (472,715) (175,175) (311,832)
Purchase of Custom
Towing............... (200,000) -- -- -- --
--------- --------- --------- -------- --------
Net cash used in
investing
activities....... (900,708) (493,663) (472,715) (175,175) (311,832)
--------- --------- --------- -------- --------
Cash flows from
financing activities:
Proceeds from long-
term debt............ 424,979 -- -- 76,624 --
Principal payments on
long-term debt....... -- (104,014) (133,341) -- (19,366)
Proceeds from
borrowings under
lines of credit...... 150,000 120,000 -- -- --
--------- --------- --------- -------- --------
Net cash (used in)
provided by
financing
activities....... 574,979 15,986 (133,341) 76,624 (19,366)
--------- --------- --------- -------- --------
Net increase in cash... 12,912 174,504 86,418 (56,199) 41,727
Cash at beginning of
period................ (7,147) 5,765 180,269 258,181 266,687
--------- --------- --------- -------- --------
Cash at end of period.. $ 5,765 $ 180,269 $ 266,687 $201,982 $308,414
========= ========= ========= ======== ========
Supplemental disclosure
of cash flow
information:
Cash paid during the
year for:
Interest............ $ 258,554 $ 325,370 $ 253,242 $ 63,310 $ 62,063
========= ========= ========= ======== ========
Income taxes........ $ 58,439 $ 61,656 $ 37,160 $ 9,290 $ 11,889
========= ========= ========= ======== ========

See accompanying notes to the consolidated financial statements.

F-45

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 1996, JANUARY 31, 1997 AND DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Smith-Christensen Enterprises, Inc. and its wholly-owned subsidiary City
Towing, Inc. (d/b/a Quality Towing), collectively referred to herein as
"Quality," were founded in 1988 and 1968, respectively. Quality's primary
business is towing, impounding and storing vehicles for municipal,
governmental and commercial customers in Southern Nevada. Quality has two
facilities in Las Vegas. It operates approximately 40 vehicles.

(b) Periods Presented

Because Quality has a fiscal year end of January 31, the statements of
operations, stockholder's equity and cash flows for Quality's most recent
twelve-month period includes the results of operations for the month of
January 1997, which is also included in the prior fiscal year ended January
31, 1997. The following represents the condensed results of operations for the
month of January 1997 which is included in the twelve-month period ended
December 31, 1997 and in the fiscal year ended January 31, 1997:

Net revenue..................................................... $440,053
Cost of revenue................................................. 242,564
--------
Gross profit................................................ 197,489
Selling, general and administrative expenses.................... 174,187
--------
Income from operations...................................... 23,302
--------
Other expenses:
Interest expense.............................................. (24,193)
Other......................................................... (862)
--------
Loss before income taxes.................................... (1,753)
Income tax expense.......................................... --
--------
Net loss.................................................... $ (1,753)
========

The consolidated financial statements include the financial statements of
Smith-Christensen Enterprises, Inc. and its wholly-owned subsidiary City
Towing, Inc. All significant intercompany balances and transactions have been
eliminated in consolidation.

(d) Revenue Recognition

Quality operates as one segment related to the transportation of vehicles
and equipment for customers.

Quality's revenue is derived from customers who require a towing service,
fees related to the storage of vehicles that have been towed, transport of
vehicles and equipment, and auction sales of unclaimed vehicles. Towing
revenue is recognized at the completion of each towing engagement, storage
fees are accrued over the period the vehicles are held in the impound
facility, transport revenue is recognized upon the delivery of the
vehicles/equipment to their final destination, and revenue from auction sales
are recorded when title to the vehicles has been transferred. Expenses related
to the generation of revenue are recognized as incurred.

F-46

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(e) Inventories

Inventories consist of vehicles that will be offered for auction.
Inventories are stated at the lower of cost or market.

(f) Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is determined
for financial statement purposes using the straight-line method over the
estimated useful lives of the individual assets or, for leasehold
improvements, over the terms of the related leases if shorter. Accelerated
methods of depreciation have been used for income tax purposes. For financial
statement purposes, Quality provides for depreciation of property and
equipment over the following estimated useful lives:

Buildings...................................................... 28-30 years
Leasehold improvements......................................... 15-30 years
Transportation and towing equipment............................ 5-15 years
Office equipment............................................... 3-5 years
Machinery and other equipment.................................. 5 years

(g) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Quality on bank loans with
similar terms and maturities, the fair value of Quality's financial
instruments approximates their carrying values.

(h) Income Taxes

(i) Use of Estimates

Management of Quality has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

(j) Interim Financial Statements

(2) PREPAID EXPENSES

Prepaid expenses consist of the following:

JANUARY 31, DECEMBER 31, MARCH 31,
1997 1997 1998
----------- ------------ -----------
(UNAUDITED)

Prepaid insurance..................... $28,010 $19,680 $45,988
Prepaid interest...................... 2,038 -- --
------- ------- -------
$30,048 $19,680 $45,988
======= ======= =======

F-47

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(3) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

JANUARY 31, DECEMBER 31, MARCH 31,
1997 1997 1998
----------- ------------ -----------
(UNAUDITED)

Land................................. $ 600,000 $ 600,000 $ 600,000
Buildings............................ 156,225 156,225 156,225
Leasehold improvements............... 278,925 278,925 278,925
Transportation and towing equipment.. 2,109,893 2,481,396 2,736,468
Office equipment..................... 123,691 212,066 222,089
Machinery and other equipment........ 112,889 125,726 172,463
---------- ---------- ----------
Total.............................. 3,381,623 3,854,338 4,166,170
Less accumulated depreciation and
amortization........................ (728,380) (977,109) (1,000,747)
---------- ---------- ----------
$2,653,243 $2,877,229 $3,165,423
========== ========== ==========

Depreciation and amortization of property, plant and equipment for the years
ended January 31, 1996 and 1997 and the twelve-month period ended December 31,
1997, totaled $140,910, $224,196, and $271,341, respectively.

(4) OTHER ASSETS

Other assets consist of the following:

JANUARY 31, DECEMBER 31, MARCH 31,
1997 1997 1998
----------- ------------ -----------
(UNAUDITED)

Metro Contract........................ $ 705,850 $ 705,850 $ 705,850
Non-compete agreement................. 25,000 25,000 25,000
Goodwill.............................. 225,048 225,048 225,048
--------- --------- ---------
Total............................... 955,898 955,898 955,898
Less accumulated amortization......... (836,990) (856,993) (861,993)
--------- --------- ---------
$ 118,908 $ 98,905 $ 93,905
========= ========= =========

Metro contract costs, non-compete agreement and goodwill are amortized over
nine, five and fifteen years, respectively. Amortization expense totaled,
$96,208, $98,432 and $20,003 for the years ended January 31, 1996 and 1997 and
the twelve-month period ended December 31, 1997.

F-48

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(5) INDEBTEDNESS

Quality's long-term debt consisted of the following:

JANUARY 31, DECEMBER 31, MARCH 31,
1997 1997 1998
----------- ------------ -----------
(UNAUDITED)

Notes payable to bank, payable in
aggregate monthly installments of
$20,312, plus interest ranging
from 9% to 9.25% over periods
ranging from 36 to 48 months, ma-
turing between September 5, 1998
and June, 2001. Secured by vehi-
cles and equipment. .............. $ 428,678 $ 596,105 $ 667,913
Note payable to former owner, pay-
able in varied monthly install-
ments, including interest at 10%,
with a final lump sum payment of
$1,396,556, maturing March 1,
1999. Secured by land, building
and the stock of City Towing,
Inc. ............................. 1,682,529 1,562,530 1,522,484
Note payable to former owner, pay-
able in monthly installments of
$3,800, including interest at 9%,
maturing July 1, 2003. Secured by
land and building. ............... 226,489 202,485 195,357
Note payable to Navistar, payable
in monthly installments of $1,433,
including interest at 10.5%, ma-
turing May 4, 1999. Secured by
equipment. ....................... 35,444 22,540 18,666
Notes payable to Navistar, payable
in monthly installments of $6,110
and 2,900, respectively, including
interest at 9%, maturing May 12,
1999 and August 11, 1999, respec-
tively. Secured by equipment. .... 240,964 158,685 135,102
Note payable to Navistar, payable
in monthly installments of $563,
including interest at 11.5%, ma-
turing August 28, 1997. Secured by
equipment. ....................... 3,796 -- --
Note payable to bank, payable in
monthly installments of $6,716,
including interest at 8%, maturing
July 1, 2000. Secured by equip-
ment. ............................ 245,316 187,529 170,986
---------- ---------- ----------
Total long-term debt............. 2,863,216 2,729,874 2,710,508
Less installments due within one
year.............................. (447,875) (541,836) (522.470)
---------- ---------- ----------
Long-term debt, excluding current
installments.................... $2,415,341 $2,188,038 $2,188,038
========== ========== ==========

Annual maturities of long-term debt for the next five years and thereafter
are as follows:

1998............................................................ $ 541,836
1999............................................................ 1,771,119
2000............................................................ 264,155
2001............................................................ 81,521
2002............................................................ 40,849
Thereafter...................................................... 30,394
----------
$2,729,874
==========

F-49

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(6) LEASES

Quality leases land and building used as part of its operations under a
lease agreement with Nevada Recycling Corporation, an affiliated entity owned
by the owners of the stockholder of Quality. The lease is classified as an
operating lease. The agreement provides for monthly rental payments of $8,000
with an automatic renewal for additional consecutive periods of one year
beginning every October, unless either party gives no less than 30 days
written notice of the intent to terminate. Quality is responsible for all
operating costs related to the property.

Rent expense was $96,000 for the years ended January 31, 1996 and 1997 and
the twelve-month period ended December 31, 1997, respectively.

(7) INCOME TAXES

Income tax expense for the years ended January 31, 1997 and 1996 and the
twelve-month period ended December 31, 1997 consists of:

TWELVE-MONTH
YEAR ENDED YEAR ENDED PERIOD ENDED
JANUARY 31, JANUARY 31, DECEMBER 31,
1996 1997 1997
----------- ----------- ------------

Current:
Federal............................... $(47,338) $171,425 $321,636
Deferred.............................. 151,090 106,198 119,342
-------- -------- --------
$103,752 $277,623 $440,978
======== ======== ========

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate:

TWELVE-MONTH
YEAR ENDED YEAR ENDED PERIOD ENDED
JANUARY 31, JANUARY 31, DECEMBER 31,
1996 1997 1997
----------- ----------- ------------

Computed expected tax expense......... $ 32,726 $269,395 $429,536
Meals and entertainment............... 1,114 6,345 6,341
Non-deductible goodwill............... 5,101 5,101 5,101
Adjustment to prior years' taxes...... 64,811 -- --
Other................................. -- (3,218) --
-------- -------- --------
$103,752 $277,623 $440,978
======== ======== ========

F-50

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities as of January 31, 1997 and the twelve-
month period ended December 31, 1997 are presented below:

TWELVE-MONTH
PERIOD ENDED
JANUARY 31, DECEMBER 31,
1997 1997
----------- ------------

Deferred tax assets:
Covenant-not-to-compete........................ $ 2,031 $ 3,164
Contract/intangible............................ 13,733 --
-------- --------
Total gross deferred tax assets.............. 15,764 3,164
Less valuation allowance..................... -- --
-------- --------
15,764 3,164
Deferred tax liabilities:
Property and equipment, due to differences in
depreciation lives and methods................ 209,143 315,885
-------- --------
Net deferred tax liability..................... $193,379 $312,721
======== ========

At January 31, 1996, the net deferred tax liability was $299,577 and there
was no recorded valuation allowance.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies, as
well as carryback opportunities, in making this assessment. Based upon the
level of historical taxable income, projections for future taxable income and
carryback opportunities over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not Quality will
realize the benefits of these deductible differences. The amount of the
deferred tax asset considered realizable, however, could be reduced in the
near term if estimates of future taxable income are reduced.

(8) NON-CASH TRANSACTIONS

During 1995, Quality financed $331,223 of certain transportation and towing
equipment in connection with the purchase of Custom Towing through a lending
institution.

(9) RELATED PARTY TRANSACTIONS

Accounts receivable from related parties are amounts due from four companies
under the common control of Quality's stockholders. The amounts receivable
totaled $167,959 and $881,884 as of January 31, 1997 and December 31, 1997,
respectively.

Quality leases land and building from an affiliated entity owned by the
owners of the stockholder of Quality (see note 6).

(10) CONTINGENT LIABILITIES

Various legal claims arise against Quality during the normal course of
business. In the opinion of management, liabilities, if any, arising from
proceedings would not have a material effect on the financial statements.

F-51

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(11) SUBSEQUENT EVENT

(a) During February 1998, the stockholder entered into a definitive
agreement to sell Quality net of land, buildings and leasehold improvements
and the note payable to the former owner of City Towing, in the amount of
$202,485 at December 31, 1997, to United Road Services, Inc. The transaction,
effected through a combination of cash and common stock of United Road
Services, Inc., is contingent and effective upon the initial public offering
of the common stock of United Road Services, Inc. Additionally, proceeds of
the initial public offering will be used to pay the note payable to former
owner of $1,562,530 at December 31, 1997. The anticipated selling price of
Quality exceeds its net assets as of December 31, 1997.

(b) Concurrently with the acquisition, United Road Services, Inc. will enter
into agreements with the stockholder to lease land and buildings used in
Quality's operations for negotiated amounts and terms.

(c) On May 6, 1998, United Road Services, Inc. effectively acquired Quality
as a result of the successful completion of the initial public offering of the
common stock of United Road Services, Inc.

F-52

INDEPENDENT AUDITORS' REPORT

The Stockholders
Caron Auto Works, Inc. and
Caron Auto Brokers, Inc.:

We have audited the accompanying combined balance sheets of Caron Auto
Works, Inc. and Caron Auto Brokers, Inc. (collectively, "Caron") as of
September 30, 1996 and 1997, and the related combined statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended September 30, 1997. These combined financial
statements are the responsibility of Caron's management. Our responsibility is
to express an opinion on these combined financial statements based on our
audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Caron
Auto Works, Inc. and Caron Auto Brokers, Inc. as of September 30, 1996 and
1997 and the results of their combined operations and their combined cash
flows for each of the years in the three-year period ended September 30, 1997
in conformity with generally accepted accounting principles.

/s/ KPMG LLP

Albany, New York
January 16, 1998,
except as to note 8(c),
which is as of May 6, 1998

F-53

CARON AUTO WORKS, INC. AND
CARON AUTO BROKERS, INC.

COMBINED BALANCE SHEETS

SEPTEMBER 30
---------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash..................................... $ 29,370 $ 108,163 $ 29,676
Trade accounts receivable, net of
allowance for doubtful accounts of
$26,793 in 1996 and $45,079 in 1997..... 633,736 746,332 1,044,089
Accounts receivable from related parties
(note 7)................................ 98,056 49,754 496,589
Accounts receivable from employees....... -- 6,500 13,000
Notes receivable......................... -- 44,539 153,561
Inventories.............................. 24,185 30,040 91,520
Prepaid and other current assets......... 38,685 5,142 175,429
---------- ---------- ----------
Total current assets................... 824,032 990,470 2,003,864
Property and equipment, net (notes 2, 3 and
4)........................................ 1,241,097 2,278,962 3,309,753
Other assets............................... 2,500 22,736 66,780
---------- ---------- ----------
Total assets........................... $2,067,629 $3,292,168 5,380,397
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt
(note 3)................................ $ 83,297 $ 263,093 $ 549,176
Current installments of obligations under
capital lease (note 4).................. 181,272 177,932 233,205
Borrowings under lines of credit (note
3)...................................... 18,839 225,000 250,000
Payable to related parties (note 7)...... 185,920 9,500 --
Accounts payable......................... 130,282 332,544 815,157
Accrued payroll and related costs........ 16,058 40,870 199,961
Income taxes payable (note 5)............ 101,128 92,447 7,950
Other accrued liabilities................ 24,021 48,277 17,458
---------- ---------- ----------
Total current liabilities.............. 740,817 1,189,663 2,072,907
Long-term liabilities:
Long-term debt, excluding current
installments (note 3)................... 56,982 1,010,856 2,003,282
Obligations under capital lease,
excluding current installments (note 4). 428,862 437,789 662,669
Deferred income taxes (note 5)........... 160,342 54,019 54,019
---------- ---------- ----------
Total liabilities...................... 1,387,003 2,692,327 4,792,877
---------- ---------- ----------
Stockholders' equity:
Common stock, $10 par value.
Authorized 10,000 shares; issued and
outstanding 200 shares in 1996 and 1997. 2,000 2,000 2,000
Additional paid-in capital............... 10,225 10,225 10,225
Retained earnings........................ 698,401 617,616 605,295
Less treasury stock, 3,000 common shares
in 1996 and 1997, at cost............... (30,000) (30,000) (30,000)
---------- ---------- ----------
Total stockholders' equity............. 680,626 599,841 587,520
---------- ---------- ----------
Total liabilities and stockholders'
equity................................ $2,067,629 $3,292,168 $5,380,397
========== ========== ==========

See accompanying notes to combined financial statements.

F-54

CARON AUTO WORKS, INC. AND
CARON AUTO BROKERS, INC.

COMBINED STATEMENTS OF OPERATIONS

SIX-MONTHS
YEARS ENDED SEPTEMBER 30 ENDED MARCH 31
---------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ----------
(UNAUDITED)

Net revenue............. $4,624,155 $5,575,257 $6,626,850 $3,565,268 $4,016,293
Cost of revenue......... 4,044,834 5,083,883 6,303,546 3,278,560 3,354,742
---------- ---------- ---------- ---------- ----------
Gross profit......... 579,321 491,374 323,304 286,708 661,551
Selling, general and
administrative
expenses............... 238,006 237,943 511,510 380,692 611,988
---------- ---------- ---------- ---------- ----------
Income (loss) from
operations.......... 341,315 253,431 (188,206) (93,984) 49,563
---------- ---------- ---------- ---------- ----------
Other income (expense):
Interest expense....... (77,693) (108,069) (141,000) (52,060) (131,207)
Interest income........ 810 5,706 8,360 -- --
Gain on sale of
assets................ 7,457 16,985 114,966 3,263 54,534
Other.................. 25,570 22,526 29,460 10,693 8,442
---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes........ 297,459 190,579 (176,420) (132,088) (18,668)
Income tax expense
(benefit) (note 5)..... 103,020 61,838 (95,635) (44,910) (6,347)
---------- ---------- ---------- ---------- ----------
Net income (loss).... $ 194,439 $ 128,741 $ (80,785) $ (87,178) $ (12,321)
========== ========== ========== ========== ==========

See accompanying notes to combined financial statements.

F-55

CARON AUTO WORKS, INC. AND
CARON AUTO BROKERS, INC.

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

ADDITIONAL TOTAL
COMMON PAID-IN RETAINED TREASURY STOCKHOLDERS'
STOCK CAPITAL EARNINGS STOCK EQUITY
------ ---------- -------- -------- -------------

Balance at September 30,
1994...................... $2,000 $10,225 $375,221 $(30,000) $357,446
Net income--1995........... -- -- 194,439 -- 194,439
------ ------- -------- -------- --------
Balance at September 30,
1995...................... 2,000 10,225 569,660 (30,000) 551,885
Net income--1996........... -- -- 128,741 -- 128,741
------ ------- -------- -------- --------
Balance at September 30,
1996...................... 2,000 10,225 698,401 (30,000) 680,626
Net loss--1997............. -- -- (80,785) -- (80,785)
------ ------- -------- -------- --------
Balance at September 30,
1997...................... 2,000 10,225 617,616 (30,000) 599,841
Net income--Six-months
ended March 31, 1998
(unaudited)............... -- -- (12,321) -- (12,321)
------ ------- -------- -------- --------
Balance of March 31, 1998
(unaudited)............... $2,000 $10,225 $605,295 $(30,000) $587,520
====== ======= ======== ======== ========

See accompanying notes to combined financial statements.

F-56

CARON AUTO WORKS, INC. AND
CARON AUTO BROKERS, INC.

COMBINED STATEMENTS OF CASH FLOWS

SIX-MONTHS
YEARS ENDED SEPTEMBER 30 ENDED MARCH 31
------------------------------- ---------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ----------
(UNAUDITED)

Cash flows from operating
activities:
Net income (loss)....... $ 194,437 $ 128,741 $ (80,785) $ (87,178) $ (12,321)
Adjustments to
reconcile net income
(loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization......... 158,790 196,937 213,290 84,186 98,113
Deferred income taxes. 41,924 18,467 (106,323) -- --
Gain on sale of
assets............... (7,457) (16,985) (114,966) (3,263) 54,534
Increase in trade
accounts receivable.. (63,618) (119,278) (112,596) (135,102) (297,757)
Decrease (increase) in
receivables from
related parties...... (12,056) (66,885) 48,302 4,967 (446,835)
Increase in accounts
receivable from
employees............ -- -- (6,500) -- (6,500)
(Increase) decrease in
inventories.......... 4,705 (23,766) (5,855) (9,235) (61,480)
Decrease (increase) in
prepaid expenses..... 4,758 (19,644) 33,543 (104,759) (172,187)
(Increase) decrease in
other assets......... 191 -- (20,236) -- (44,044)
Decrease in amounts
payable to related
parties.............. (10,702) (22,889) (176,420) 14,947 (9,500)
Increase (decrease) in
accounts payable..... (44,731) 16,036 202,262 161,676 482,613
Increase (decrease) in
accrued payroll and
related costs........ (119,686) (1,670) 24,812 24,859 159,091
Increase in other
accrued liabilities.. 447 86,401 15,575 (72,439) (115,316)
--------- --------- --------- --------- ----------
Net cash provided by
(used in) operating
activities......... 147,002 175,465 (85,897) (121,341) (371,589)
--------- --------- --------- --------- ----------
Cash flows from investing
activities:
Purchases of property
and equipment.......... (142,383) (54,909) (333,277) (137,328) (1,261,847)
Proceeds from sale of
assets................. 123,913 56,011 341,196 156,636 80,309
Increase in notes
receivable............. -- -- (44,539) (189,157) (109,022)
--------- --------- --------- --------- ----------
Net cash provided by
(used in) investing
activities......... (18,470) 1,102 (36,620) (169,849) (1,290,560)
--------- --------- --------- --------- ----------
Cash flows from financing
activities:
Proceeds from long-term
debt................... 100,000 70,345 456,500 456,500 1,835,267
Principal payments on
long-term debt and
capital leases......... (174,880) (300,175) (461,351) (174,890) (276,605)
Borrowings under line
of credit, net......... (35,000) 18,839 206,161 51,161 25,000
--------- --------- --------- --------- ----------
Net cash provided by
(used in) financing
activities......... (109,880) (210,991) 201,310 332,771 1,583,662
--------- --------- --------- --------- ----------
Net increase (decrease)
in cash................. 18,652 (34,424) 78,793 41,581 (78,487)
Cash at beginning of
year.................... 45,142 63,794 29,370 29,370 108,163
--------- --------- --------- --------- ----------
Cash at end of year...... $ 63,794 $ 29,370 $ 108,163 $ 70,951 $ 29,676
========= ========= ========= ========= ==========
Supplemental disclosure
of cash flow
information:
Cash paid during the
year for:
Interest.............. $ 124,505 $ 110,038 $ 143,639 $ 52,060 $ 131,207
========= ========= ========= ========= ==========
Income taxes.......... $ -- $ 61,096 $ 43,371 $ 44,910 $ 78,150
========= ========= ========= ========= ==========

See accompanying notes to combined financial statements.

F-57

CARON AUTO WORKS, INC. AND
CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

SEPTEMBER 30, 1995, 1996 AND 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Caron Auto Works, Inc. and Caron Auto Brokers, Inc. (collectively, "Caron")
were founded in 1976 and 1993, respectively. Caron's primary business is
transporting vehicles for leasing companies, long-haul transporters and
individuals in the Northeastern United States. It also provides towing
services for commercial and private customers in the Hartford, Connecticut
region. Caron has two facilities in East Hartford and one facility in New
Jersey. It operates approximately 55 vehicles.

(b) Principles of Combination

The combined financial statements include the financial statements of Caron
Auto Works, Inc. and Caron Auto Brokers, Inc. All significant intercompany
balances and transactions have been eliminated in combination. Both entities
have the same management and principal stockholder ownership.

Caron operates as one segment related to the transportation of vehicles and
equipment for customers.

Caron's revenue is derived from customers who require a towing service,
transport of vehicles and equipment, fees related to repair of vehicles that
have been towed, and auction sales of unclaimed vehicles. Towing revenue is
recognized at the completion of each towing engagement, transport revenue is
recognized upon the delivery of the vehicles/equipment to their final
destination, repair fees are recorded when the service is performed, and
revenue from auction sales are recorded when title to the vehicles has been
transferred. Expenses related to the generation of revenue are recognized as
incurred.

(d) Inventories

Inventories include spare parts used in the repair of vehicles and are
stated at the lower of cost or market.

(e) Property and Equipment

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes,
Caron provides for depreciation of property and equipment over the following
estimated useful lives:

Automobiles and transportation equipment.......................... 5 years
Furniture and fixtures............................................ 5-7 years
Machinery and equipment........................................... 5-7 years
Leasehold improvements............................................ 7-39 years

(f) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Caron on bank loans with
similar terms and maturities, the fair value of Caron's financial instruments
approximates their carrying values.

F-58

CARON AUTO WORKS, INC.
AND CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(g) Income Taxes

(h) Use of Estimates

Management of Caron has made a number of estimates and assumptions relating
to the reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare these financial statements in conformity
with generally accepted accounting principles. Actual results could differ
from those estimates.

(i) Interim Financial Statements

(2) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

SEPTEMBER 30
---------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)

Vehicles................................... $ 16,608 $ 42,258 $ 25,650
Office equipment........................... 75,590 112,455 149,391
Transportation and towing equipment........ 1,663,407 2,604,541 3,600,952
Leasehold improvements..................... 262,276 313,011 366,898
---------- ---------- ----------
Total.................................... 2,017,881 3,072,265 4,142,891
Less accumulated depreciation and
amortization.............................. (776,784) (793,303) (833,138)
---------- ---------- ----------
$1,241,097 $2,278,962 $3,309,753
========== ========== ==========

Depreciation and amortization of property and equipment in 1995, 1996 and
1997 totaled $158,790, $196,937 and $213,290, respectively.

(3) INDEBTEDNESS

Caron has available a $250,000 line of credit with Bank of South Windsor,
secured by all corporate assets and a personal guarantee by Caron's primary
stockholder. Interest is payable at the prime lending rate plus 1% (9.5% at
September 30, 1997). Total borrowings under this unsecured line of credit as
of September 30, 1996 and 1997 amounted to $18,839 and $225,000, respectively.

F-59

CARON AUTO WORKS, INC.
AND CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Caron's long-term debt consists of the following:

SEPTEMBER 30
---------------- MARCH 31,
1996 1997 1998
------- -------- -----------
(UNAUDITED)

Note payable to Savings Bank of Manchester,
payable in monthly principal payments of $1,085,
plus interest at 8.25%, maturing September 29,
2000. Secured by a car and the personal
guarantee of the primary stockholder............ $ -- $ 34,500 $ 29,333
Note payable to Savings Bank of Manchester,
payable in monthly principal payments of $2,500,
plus interest at prime plus 1% (9.5% at
September 30, 1997), maturing on August 26,
2002. Secured by a car and the personal
guarantee of the primary stockholder............ -- 147,500 132,500
Note payable to Savings Bank of Manchester,
payable in monthly installments of $692,
including interest at 8.25%, maturing on August
29, 2000. Secured by a car...................... -- 21,459 18,714
Note payable to unrelated individual, payable in
monthly installments of $580, including interest
at 12.5%, maturing on October 31, 2000.......... 22,364 17,947 14,124
Note payable to Bank of South Windsor, payable in
monthly installments of $1,633, including
interest at 9.5%. Matured in October, 1996.
Secured by one tractor and three trailers....... 1,844 -- --
Note payable to Bank of South Windsor, payable in
monthly principal payments of $1,111, plus
interest at prime plus 1% (9.5% at September 30,
1997), maturing on April 18, 1999. Secured by
assets of Caron and the personal guarantee of
the primary stockholder......................... 34,444 21,111 14,444
Note payable to Bank of South Windsor, payable in
monthly installments of $8,904, including
interest at 9.25%, maturing on March 27, 2002.
Secured by twelve tractors and twelve trailers
and the personal guarantee of the primary
stockholder..................................... -- 390,878 355,615
Note payable to Peoples Bank, payable in monthly
principal payments of $1,786, plus interest at
prime plus 1.5% (10% at September 30, 1997),
maturing August 15, 2004. Secured by the assets
of Caron and the personal guarantee of the
primary stockholder and affiliated companies.... -- 148,214 137,498
Note payable to Bank of South Windsor, payable in
monthly installments of $3,203, including
interest at 9.5%. Secured by assets of Caron and
the personal guarantee by the primary
stockholder..................................... 40,498 -- --
Note payable to Ford Motor Credit Company,
payable in monthly installments of $770,
including interest at 10%, maturing November 27,
1998. Secured by a truck........................ 24,979 17,924 15,524
Note payable to Ford Motor Credit Company,
payable in monthly installments of $959,
including interest at 8.5%. Secured by
equipment....................................... 16,150 -- --
Notes payable to Navistar Financial Corp.,
payable in monthly installments ranging from
$1,632 to $6,788, including interest at rates of
9.9% and 10.3%, maturing between 2001 and 2002.
Secured by tractors and trailers................ -- 474,416 426,239
Notes payable to Chase Manhattan Bank, payable in
monthly installments of $2,082 and $741
including interest at 9.0% and 8.5%, maturing in
2002. Secured by a tractor trailer and real
property........................................ -- -- 129,138
Notes payable to Green Tree Financial Servicing
Corporation, payable in monthly installments of
$10,649 including interest at 10.9% maturing
July 20, 2002. Secured by three trucks.......... -- -- 432,970

F-60

CARON AUTO WORKS, INC.
AND CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

SEPTEMBER 30
-------------------- MARCH 31,
1996 1997 1998
-------- ---------- -----------
(UNAUDITED)

Notes payable to PACCAR Financial Corp,
payable in monthly installments of $7,199
and $3,049 including interest at 10.8%
maturing August 1, 2002. Secured by two
trucks..................................... $ -- $ -- $ 430,161
Note payable to Orix Credit Alliance, Inc.,
payable in monthly installments of $3,719,
including interest at 9.6% maturing
February 3, 2002. Secured by one trailer
and one tractor truck...................... -- -- 145,321
Note payable to Norwest Equipment Finance,
Inc., payable in monthly installments of
$3,398, including interest at 10.3%
maturing April 2, 2002. Secured by one
tractor, one trailer, and a car carrier.... -- -- 133,337
Note payable to Newcourt Financial Corp.,
payable in monthly installments of $3,320
including interest at 10.8% maturing July
23, 2002. Secured by one tractor and one
car hauler................................. -- -- 137,540
-------- ---------- ----------
Total long-term debt...................... 140,279 1,273,949 2,552,458
Less installments due within one year....... (83,297) (263,093) (549,176)
-------- ---------- ----------
Long-term debt, excluding current
installments............................. $ 56,982 $1,010,856 $2,003,282
======== ========== ==========

The aggregate maturities of long-term debt for each of the five years
subsequent to September 30, 1997 are as follows:

1998.............................................................. $ 263,093
1999.............................................................. 279,925
2000.............................................................. 285,877
2001.............................................................. 259,616
2002.............................................................. 144,384
Thereafter........................................................ 41,054
----------
$1,273,949
==========

(4) LEASES

Caron is the lessee for various transportation and towing equipment under
capital leases expiring in 2002.

Following is a summary of equipment held under the capital leases:

SEPTEMBER 30
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
(UNAUDITED)

Transportation and towing equipment........... $ 885,356 $ 741,628 $856,719
Less accumulated amortization................. (186,143) (198,826) (218,000)
--------- --------- --------
$ 699,213 $ 542,802 $638,719
========= ========= ========

Caron leases the building used for its operations on a month-to-month basis
from its primary stockholder. The lease is classified as an operating lease.
Caron is responsible for all operating costs related to the property. Rent
paid to the stockholder in 1995, 1996 and 1997 was $75,382, $77,181 and
$117,096, respectively.

Total rent expense for 1995, 1996 and 1997 was $84,382, $86,181 and
$126,096, respectively.

F-61

CARON AUTO WORKS, INC.
AND CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Future minimum capital lease payments as of September 30, 1997 are:

Year Ending September 30,
1998............................................................ $ 236,171
1999............................................................ 208,828
2000............................................................ 178,665
2001............................................................ 93,094
2002............................................................ 5,644
---------
Total......................................................... 722,402
Less amount representing interest............................... (106,681)
---------
Present value of net minimum capital lease payments........... $ 615,721
=========

(5) INCOME TAXES

Income tax expense (benefit) for the years ended September 30, 1995, 1996 and
1997 consists of:

1995 1996 1997
-------- ------- ---------

Current:
Federal........................................ $ 38,174 $26,900 $ 5,789
State.......................................... 22,922 16,471 4,899
-------- ------- ---------
61,096 43,371 10,688
Deferred......................................... 41,924 18,467 (106,323)
-------- ------- ---------
$103,020 $61,838 $ (95,635)
======== ======= =========

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate.

1995 1996 1997
-------- -------- --------

Computed expected tax expense (benefit)....... $101,136 $ 64,797 $(59,983)
State income taxes, net of Federal benefit.... 15,129 10,871 3,233
Officer's life insurance...................... 427 -- --
Non-deductible meals and entertainment
expenses..................................... 512 998 1,647
Effect of graduated tax rates................. (16,262) (14,980) (34,847)
Other......................................... 2,078 152 (5,685)
-------- -------- --------
$103,020 $ 61,838 $(95,635)
======== ======== ========

F-62

CARON AUTO WORKS, INC.
AND CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities as of September 30, 1996 and 1997 are
presented below:

1996 1997
--------- ---------

Deferred tax assets:
Allowance for bad debts............................. $ 10,091 $ 19,830
Net operating loss carryforwards.................... -- 186,261
--------- ---------
Total gross deferred tax asset.................... 10,091 206,091
Less valuation allowance.......................... -- --
--------- ---------
Net deferred tax asset............................ 10,091 206,091
Deferred tax liabilities:
Property and equipment, due to differences in
depreciation lives and methods..................... (170,133) (260,110)
--------- ---------
Net deferred tax liability........................ $(160,342) $ (54,019)
========= =========

Caron had a net deferred tax liability of $141,875 at September 30, 1995.
The net operating loss carryforward of approximately $465,000 expires in 2017.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies, as
well as carryback opportunities, in making this assessment. Based upon the
level of historical taxable income, projections for future taxable income and
carryback opportunities over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not Caron will realize
the benefits of these deductible differences. The amount of the deferred tax
asset considered realizable, however, could be reduced in the near term if
estimates of future taxable income are reduced.

(6) NON-CASH TRANSACTIONS

During 1997, Caron leased $1,144,108 of various transportation and towing
equipment through several lending institutions (see note 3).

(7) RELATED PARTY TRANSACTIONS

Caron is indebted to the primary stockholder under an unsecured note,
bearing interest at 7% per annum. The note, unpaid interest on the note, and
accrued bonus to the sole stockholder are included in payable to related
parties in the accompanying combined balance sheets.

Included in accounts receivable from related parties are amounts due from
two companies under the common control of Caron's primary stockholder. The
amounts receivable totaled $98,056, $49,757 and $496,589 as of September 30,
1996 and 1997 and March 31, 1998, respectively.

Caron leases two buildings located in East Hartford, Connecticut, from the
primary stockholder (see note 4).

(8) SUBSEQUENT EVENT

(a) During February 1998, the stockholders entered into a definitive
agreement to sell Caron to United Road Services, Inc. The transaction,
effected through a combination of cash and common stock of United Road
Services, Inc., is contingent and effective upon the initial public offering
of the common stock of United Road Services, Inc. The anticipated selling
price of Caron exceeds its net assets as of September 30 1997.

(b) Concurrently with the acquisition, United Road Services, Inc. will enter
into agreements with the stockholders to lease land and buildings used in
Caron's operations for negotiated amounts and terms.

(c) On May 6, 1998, United Road Services, Inc. effectively acquired Caron as
a result of the successful completion of the initial public offering of the
common stock of United Road Services, Inc.

F-63

INDEPENDENT AUDITORS' REPORT

The Stockholder
Absolute Towing and Transporting, Inc.:

We have audited the accompanying balance sheets of Absolute Towing and
Transporting, Inc. ("Absolute") as of December 31, 1996 and 1997, and the
related statements of operations, stockholder's equity, and cash flows for the
years then ended. These financial statements are the responsibility of
Absolute's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

As described in Note 6, 99% of Absolute's revenue is derived from one
customer, and all of Absolute's trade accounts receivable at December 31, 1997
are due from this single customer.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Absolute Towing and
Transporting, Inc. as of December 31, 1996 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ KPMG LLP

Albany, New York
January 28, 1998,
except as to note 7(b),
which is as of May 6, 1998

F-64

ABSOLUTE TOWING AND TRANSPORTING, INC.

BALANCE SHEETS

DECEMBER 31
------------------- MARCH 31,
1996 1997 1998
-------- ---------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash......................................... $ -- $ 10,935 $ 744,792
Trade accounts receivable (note 3)........... 268,818 593,679 107,156
Income taxes receivable (note 5)............. 9,731 55,324 --
Prepaid expenses............................. 23,613 30,587 27,156
-------- ---------- ----------
Total current assets....................... 302,162 690,525 879,104
Property and equipment, net (notes 2 and 3).... 265,934 306,153 423,604
Deferred income taxes (note 5)................. 6,436 31,331 31,331
-------- ---------- ----------
Total assets............................... $574,532 $1,028,009 $1,334,039
======== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of long-term debt (note
3).......................................... $ 15,737 $ 16,218 $ 16,915
Borrowings under lines of credit (note 3).... -- 212,403 556,034
Book overdraft............................... 98,012 312,217 --
Accounts payable............................. 79,468 124,573 233,190
-------- ---------- ----------
Total current liabilities.................. 193,217 665,411 806,139
Long-term liabilities:
Long-term debt, excluding current
installments (note 3)....................... -- 83,782 78,006
-------- ---------- ----------
Total liabilities.......................... 193,217 749,193 884,145
-------- ---------- ----------
Stockholder's equity:
Common stock, $42.86 par value. Authorized,
issued and outstanding 1,000 shares in 1996
and 1997.................................... 42,860 42,860 42,860
Retained earnings............................ 338,455 235,956 407,034
-------- ---------- ----------
Total stockholder's equity................. 381,315 278,816 449,894
-------- ---------- ----------
Total liabilities and stockholder's equity. $574,532 $1,028,009 $1,334,039
======== ========== ==========

See accompanying notes to financial statements.

F-65

ABSOLUTE TOWING AND TRANSPORTING, INC.

STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER THREE-MONTHS
31 ENDED MARCH 31
---------------------- ----------------------
1996 1997 1997 1998
---------- ---------- ---------- ----------
(UNAUDITED)

Net revenue.................... $3,464,623 $4,779,901 $1,079,300 $1,409,417
Cost of revenue................ 2,756,327 3,766,564 734,684 1,054,974
---------- ---------- ---------- ----------
Gross profit............... 708,296 1,013,337 344,616 354,443
Selling, general and
administrative expenses....... 635,595 1,095,416 98,728 104,035
---------- ---------- ---------- ----------
Income (loss) from
operations................ 72,701 (82,079) 245,888 250,408
---------- ---------- ---------- ----------
Other income (expense):
Interest expense............. (1,440) (15,018) (1,763) (14,667)
Gain (loss) on sale of
assets...................... (2,842) 9,254 -- --
---------- ---------- ---------- ----------
Income (loss) before income
taxes..................... 68,419 (87,843) 244,125 235,741
Income tax expense (benefit)
(note 5)...................... (12,667) (24,095) 66,963 64,663
---------- ---------- ---------- ----------
Net income (loss).......... $ 81,086 $ (63,748) $ 177,162 $ 171,078
========== ========== ========== ==========

See accompanying notes to financial statements.

F-66

ABSOLUTE TOWING AND TRANSPORTING, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY

TOTAL
COMMON RETAINED STOCKHOLDER'S
STOCK EARNINGS EQUITY
------- -------- -------------

Balance at December 31, 1995................... $42,860 $262,370 $305,230
Distributions to stockholder................... -- (5,001) (5,001)
Net income--1996............................... -- 81,086 81,086
------- -------- --------
Balance at December 31, 1996................... 42,860 338,455 381,315
Distributions to stockholder................... -- (38,751) (38,751)
Net loss--1997................................. -- (63,748) (63,748)
------- -------- --------
Balance at December 31, 1997................... 42,860 235,956 278,816
Net income--three-months ended March 31, 1998
(unaudited)................................... -- 171,078 171,078
------- -------- --------
Balance at March 31, 1998 (unaudited).......... $42,860 $407,034 $449,894
======= ======== ========

See accompanying notes to financial statements.

F-67

ABSOLUTE TOWING AND TRANSPORTING, INC.

STATEMENTS OF CASH FLOWS

THREE-MONTHS
YEAR ENDED DECEMBER 31 ENDED MARCH 31
------------------------ --------------------
1996 1997 1997 1998
----------- ----------- --------- ---------
(UNAUDITED)

Cash flows from operating
activities:
Net income (loss)............. $ 81,086 $ (63,748) $ 177,162 $ 171,078
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization............... 110,327 127,960 30,728 51,812
Deferred income taxes....... (24,253) (24,895) -- --
Loss (gain) from sale of
property and equipment..... 2,842 (9,254) -- --
Decrease (increase) in trade
accounts receivable........ (75,514) (324,861) (112,420) 486,523
Decrease (increase) in
income taxes receivable.... 8,086 (45,593) 9,731 55,324
Decrease (increase) in
prepaid expenses........... 2,718 (6,974) 4,069 3,431
Increase (decrease) in
accounts payable........... 29,252 45,105 (1,230) 108,617
----------- ----------- --------- ---------
Net cash provided by (used
in) operating activities. 134,544 (302,260) 108,040 876,785
----------- ----------- --------- ---------
Cash flows from investing
activities:
Purchases of property and
equipment.................... (143,215) (192,675) (57,606) (169,263)
Proceeds from sale of
property and equipment....... 11,749 33,750 -- --
----------- ----------- --------- ---------
Net cash used in investing
activities............... (131,466) (158,925) (57,606) (169,263)
----------- ----------- --------- ---------
Cash flows from financing
activities:
Net increase in borrowings
under line of credit......... -- 212,403 -- 343,631
Increase (decrease) in book
overdraft.................... (20,890) 214,205 41,412 (312,217)
Proceeds from long-term debt.. 15,737 100,000 -- --
Principal payments on long
term debt.................... -- (15,737) (15,737) (5,079)
Stockholder distributions..... (5,001) (38,751) -- --
----------- ----------- --------- ---------
Net cash provided by (used
in) financing activities. (10,154) 472,120 25,675 26,335
----------- ----------- --------- ---------
Net (decrease) increase in
cash.......................... (7,076) 10,935 76,109 733,857
Cash at beginning of period.... 7,076 -- -- 10,935
----------- ----------- --------- ---------
Cash at end of period.......... $ -- $ 10,935 $ 76,109 $ 744,792
=========== =========== ========= =========
Supplemental disclosure of cash
flow information:
Cash paid during the year
for:
Interest.................... $ 1,439 $ 15,018 $ 1,763 $ 14,667
=========== =========== ========= =========
Income taxes................ $ 3,500 $ 46,393 $ 57,232 $ 9,339
=========== =========== ========= =========

See accompanying notes to financial statements.

F-68

ABSOLUTE TOWING AND TRANSPORTING, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1996 AND 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Absolute Towing and transporting, Inc. ("Absolute") was founded in 1987.
Absolute's primary business is towing salvage vehicles for auction companies
in Southern California. Absolute has one facility in Los Angeles. It operates
approximately 25 vehicles.

(b) Revenue Recognition

Absolute operates as one segment related to the transportation of vehicles
and equipment for customers.

Absolute's revenue is derived from customers who require a towing service.
Revenue is recognized at the completion of each towing engagement. Expenses
related to the generation of revenue are recognized as incurred.

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases, if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes,
Absolute provides for depreciation of property and equipment over the
following estimated useful lives:

Transportation and towing equipment................................ 3-5 years
Leasehold improvements............................................. 5 years
Furniture and fixtures............................................. 5 years

(d) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Absolute on bank loans with
similar terms and maturities, the fair value of Absolute's financial
instruments approximates their carrying values.

(e) Income Taxes

(f) Use of Estimates

Management of Absolute has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

(g) Interim Financial Statements

F-69

ABSOLUTE TOWING AND TRANSPORTING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

DECEMBER 31
--------------------- MARCH 31,
1996 1997 1998
--------- ---------- -----------
(UNAUDITED)

Transportation and towing equipment...... $ 920,210 $ 974,036 $1,143,299
Leasehold improvements................... 3,740 27,110 27,110
Furniture and fixtures................... 1,060 1,060 1,060
--------- ---------- ----------
Total.................................. 925,010 1,002,206 1,171,469
Less accumulated depreciation and
amortization............................ (659,076) (696,053) (747,865)
--------- ---------- ----------
$ 265,934 $ 306,153 $ 423,604
========= ========== ==========

Depreciation and amortization of property and equipment in 1996 and 1997
totaled $110,327 and $127,960, respectively.

(3) INDEBTEDNESS

Absolute has a line of credit with a bank in the amount of $300,000, which
bears interest at the bank's prime rate plus 1% (9.5% at December 31, 1997).
This line of credit expires on May 1, 1998. Borrowings under this line of
credit are $212,403 at December 31, 1997 and are secured by accounts
receivable, inventory, and equipment. Additionally, in 1997, Absolute entered
into a revolving credit agreement with a bank that provides for maximum
borrowings of $600,000. Outstanding borrowings bear interest at the bank's
prime rate plus 1% and are payable in 60 monthly installments beginning
December 10, 1998. The credit facility matures November, 1998. There were no
borrowings outstanding at December 31, 1997.

Absolute's long-term debt consisted of the following:

DECEMBER 31
------------------ MARCH 31,
1996 1997 1998
-------- -------- -----------
(UNAUDITED)

Note payable to bank, payable in monthly
installments of $2,125, including interest
at 10%, maturing December 1, 2002. Secured
by personal property........................ $ 15,737 $100,000 $ 94,921
Less installments due within one year...... (15,737) (16,218) (16,915)
-------- -------- --------
Long-term debt, excluding current
installments............................ $ -- $ 83,782 $ 78,006
======== ======== ========

Annual maturities of long-term debt for the next five years are as follows:

1998................................................................ $ 16,218
1999................................................................ 17,917
2000................................................................ 19,791
2001................................................................ 21,865
2002................................................................ 24,209
--------
$100,000
========

(4) LEASES

Absolute leases the building used for its operations under a month-to-month
lease agreement. The lease is classified as an operating lease. The agreement
provides for monthly rental payments of $1,446. Absolute is responsible for
all operating costs related to the property.

Total rent expense for 1996 and 1997 was $24,442 and $18,800, respectively.

F-70

ABSOLUTE TOWING AND TRANSPORTING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(5) INCOME TAXES

Income tax expense (benefit) for the years ended December 31, 1996 and 1997
consists of:

1996 1997
-------- --------

Current:
Federal................................................ $ 10,786 $ --
State.................................................. 800 800
-------- --------
11,586 800
Deferred................................................. (24,253) (24,895)
-------- --------
$(12,667) $(24,095)
======== ========

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate:

1996 1997
-------- --------

Computed expected tax expense........................... $ 23,262 $(29,867)
Effect of graduated tax rates........................... (10,018) 6,656
State income taxes, net of Federal benefit.............. 3,695 (1,626)
Los Angeles Revitalization Zone ("LARZ") credit......... (33,371) --
Non-deductible meals and entertainment expenses......... 3,765 742
-------- --------
$(12,667) $(24,095)
======== ========

The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities as of December 31, 1996 and 1997 are
presented below:

1996 1997
------- -------

Deferred tax assets:
Los Angeles Revitalization Zone credit.................. $12,927 $12,927
Net operating loss carryforward......................... -- 20,524
------- -------
Total gross deferred tax assets....................... 12,927 33,451
Less valuation allowance.............................. -- --
------- -------
12,927 33,451
Deferred tax liabilities:
Property and equipment, due to differences in
depreciation lives and methods......................... (6,491) (2,120)
------- -------
Net deferred tax asset................................ $ 6,436 $31,331
======= =======

At December 31, 1995, the net deferred tax liability was $17,817. The net
operating loss carryforward of approximately $60,400 expires in 2017 and LARZ
credit of approximately $12,900 expires in 2011.

F-71

ABSOLUTE TOWING AND TRANSPORTING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

deferred tax assets are deductible, management believes it is more likely than
not Absolute will realize the benefits of these deductible differences. The
amount of the deferred tax asset considered realizable, however, could be
reduced in the near term if estimates of future income are reduced.

(6) CONCENTRATION OF BUSINESS RISKS

For both 1996 and 1997, 99% of Absolute's revenues were derived from one
customer, Insurance Auto Auctions (IAA). The loss of this customer could
significantly effect Absolute's performance.

(7) SUBSEQUENT EVENT

(a) During February 1998, the stockholder entered into a definitive
agreement to sell Absolute to United Road Services, Inc. The transaction,
effected through a combination of cash and common stock of United Road
Service, Inc., is contingent and effective upon the initial public offering of
the common stock of United Road Service, Inc. The anticipated selling price of
Absolute exceeds its net assets as of December 31, 1997. Certain of the assets
of Absolute, in the amount of $65,000, will be retained by the stockholder.

(b) On May 6, 1998, United Road Services, Inc. effectively acquired Absolute
as a result of the successful completion of the initial public offering of the
common stock of United Road Services, Inc.

F-72

INDEPENDENT AUDITORS' REPORT

The Stockholder
ASC Transportation Services:

We have audited the accompanying consolidated balance sheet of ASC
Transportation Services and subsidiary (Auto Service Center d/b/a ASC Truck
Service) ("Auto Service") as of December 31, 1997, and the related
consolidated statements of operations, stockholder's deficit, and cash flows
for the year then ended. These consolidated financial statements are the
responsibility of Auto Service's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of ASC
Transportation Services and subsidiary (Auto Service Center d/b/a ASC Truck
Service) as of December 31, 1997, and the results of their operations and
their cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/ KPMG LLP

Albany, New York
February 10, 1998,
except as to notes 7 and 8(c)
which are as of May 8, 1998 and
May 6, 1998, respectively

F-73

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

DECEMBER 31, MARCH 31,
1997 1998
------------ ----------

ASSETS
Current assets:
Cash................................................ $ 138,213 $ 132,644
Trade accounts receivable........................... 225,364 249,103
Due from employees.................................. 715 1,884
Accounts receivable--other.......................... 4,977 9,089
Inventories......................................... 18,167 9,213
Prepaid expenses.................................... 69,535 66,753
---------- ----------
Total current assets.............................. 456,971 468,686
Property and equipment, net (notes 2 and 4)........... 806,503 764,338
Other assets.......................................... 10,986 25,577
---------- ----------
Total assets...................................... $1,274,460 $1,258,601
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current installments of long-term debt (note 3)..... $ 20,275 $ 17,450
Current installments of obligations under capital
leases (note 4).................................... 247,845 249,390
Accounts payable.................................... 121,245 80,736
Accrued payroll and related costs................... 45,759 77,339
Income taxes payable (note 5)....................... 62,051 46,565
Other accrued liabilities........................... 16,961 31,152
---------- ----------
Total current liabilities......................... 514,136 502,632
Long-term liabilities:
Long-term debt, excluding current installments (note
3)................................................. 209,326 206,149
Obligations under capital leases, excluding current
installments (note 4).............................. 491,680 438,445
Deferred income taxes (note 5)...................... 82,965 82,965
---------- ----------
Total liabilities................................. 1,298,107 1,230,191
---------- ----------
Stockholders' deficit:
Common stock, no par value. Authorized 10,000
shares; issued and outstanding 25 shares........... 24,000 24,000
Additional paid-in capital.......................... 33,325 33,325
Accumulated deficit................................. (80,972) (28,915)
---------- ----------
Total stockholders' deficit....................... (23,647) 28,410
---------- ----------
Total liabilities and stockholders' deficit....... $1,274,460 $1,258,601
========== ==========

See accompanying notes to the consolidated financial statements.

F-74

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED STATEMENT OF OPERATIONS

THREE-MONTHS
ENDED MARCH 31
------------------
YEAR ENDED
DECEMBER 31, 1997 1997 1998
----------------- -------- --------
(UNAUDITED)

Net revenue.............................. $3,310,464 $743,768 $919,626
Cost of revenue.......................... 2,364,355 459,654 555,251
---------- -------- --------
Gross profit......................... 946,109 284,114 364,375
Selling, general, and administrative
expenses................................ 764,778 239,078 258,285
---------- -------- --------
Income from operations............... 181,331 45,036 106,090
---------- -------- --------
Other income (expense):
Interest expense....................... (71,947) (17,553) (17,936)
Gain (loss) on sale of assets.......... 18,670 10,500 (9,652)
Other.................................. 34,834 7,826 --
---------- -------- --------
Income before income taxes........... 162,888 45,809 78,502
Income tax expense (note 5).............. 49,096 13,808 26,445
---------- -------- --------
Net income........................... $ 113,792 $ 32,001 $ 52,057
========== ======== ========

See accompanying notes to the consolidated financial statements.

F-75

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIT

ADDITIONAL TOTAL
COMMON PAID-IN ACCUMULATED STOCKHOLDER'S
STOCK CAPITAL DEFICIT EQUITY (DEFICIT)
------- ---------- ----------- ----------------

Balance at December 31, 1996... $24,000 $33,325 $(194,764) $(137,439)
Net income--1997............... -- -- 113,792 113,792
------- ------- --------- ---------
Balance at December 31, 1997... 24,000 33,325 (80,972) (23,647)
Net income--three-months ended
March 31, 1998
(unaudited)................... -- -- 52,057 52,057
------- ------- --------- ---------
Balance at March 31, 1998 (un-
audited)...................... $24,000 $33,325 $ (28,915) $ 28,410
======= ======= ========= =========

See accompanying notes to the consolidated financial statements.

F-76

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

THREE-MONTHS
ENDED MARCH 31
YEAR ENDED ------------------
DECEMBER 31, 1997 1997 1998
----------------- -------- --------
(UNAUDITED)

Cash flows from operating activities:
Net income............................. $ 113,792 $ 32,001 $ 52,057
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization........ 177,150 41,790 41,219
Deferred income taxes................ (6,786) -- --
Loss (gain) on sale of property and
equipment........................... (18,670) (10,500) 9,652
Decrease (increase) in trade accounts
receivable.......................... (88,313) 2,757 (23,739)
Increase in due from employees....... (1,376) (661) (1,169)
Increase in accounts receivable--
other............................... (1,366) (2,182) (4,112)
Decrease (increase) in inventories... (5,006) (1,987) 8,954
Decrease (increase) in prepaid
expenses and other assets........... 28,383 26,044 (11,809)
Decrease in accounts payable......... (11,932) (35,648) (40,509)
Increase in accrued payroll and
related costs....................... 17,020 27,495 31,580
Increase (decrease) in income taxes
payable............................. 38,517 8,479 (15,486)
Increase in other accrued
liabilities......................... 7,191 298 14,191
--------- -------- --------
Net cash provided by operating
activities........................ 248,604 87,886 60,829
--------- -------- --------
Cash flows from investing activities:
Purchases of property and equipment.... (268,647) (11,561) (8,706)
Proceeds from sale of property and
equipment............................. 52,938 18,537 --
--------- -------- --------
Net cash used in investing activi-
ties.............................. (215,709) 6,976 (8,706)
--------- -------- --------
Cash flows from financing activities:
Proceeds from long-term debt........... 240,673 -- --
Principal payments on long-term debt
and capital leases.................... (211,134) (41,206) (57,692)
--------- -------- --------
Net cash provided by financing ac-
tivities.......................... 29,539 (41,206) (57,692)
--------- -------- --------
Net increase (decrease) in cash.......... 62,434 53,656 (5,569)
Cash at beginning of period.............. 75,779 75,779 138,213
--------- -------- --------
Cash at end of period.................... $ 138,213 $129,435 $132,644
========= ======== ========
Supplemental disclosure of cash flow in-
formation:
Cash paid during the year for:
Interest............................. $ 72,183 $ 17,553 $ 17,936
========= ======== ========
Income taxes......................... $ 17,660 $ 5,624 $ 41,931
========= ======== ========

See accompanying notes to the consolidated financial statements.

F-77

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

ASC Transportation Services and its wholly-owned subsidiary, Auto Service
Center (d/b/a ASC Truck Service), collectively referred to herein as "Auto
Service", were founded in 1993 and 1965, respectively. Auto Service is a
commercial and police towing company with two facilities based in Sacramento,
California. One facility concentrates in the towing of commercial and personal
vehicles primarily contracting with law enforcement agencies and motor clubs.
The other location concentrates on the towing of larger commercial vehicles
and maintains a repair shop also for commercial vehicles. It operates
approximately 28 vehicles.

(b) Principles of Consolidation

The consolidated financial statements include the financial statements of
ASC Transportation Services and its wholly-owned subsidiary, Auto Service
Center. All significant intercompany balances and transactions have been
eliminated in consolidation.

Auto Service operates as one segment related to the transportation of
vehicles and equipment for customers.

Auto Service's revenue is derived from customers who require a towing
service, transport of vehicles and equipment, and fees related to the repair
of vehicles that have been towed. Towing revenue is recognized at the
completion of each towing engagement, transport revenue is recognized upon the
delivery of the vehicles and equipment to their final destination, and repair
fees are recorded when the service is performed. Expenses related to the
generation of revenue are recognized as incurred.

(d) Inventories

Inventories consist principally of spare parts used for repair and
maintenance. Inventories are stated at the lower of cost or market.

(e) Property and Equipment

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes, Auto
Service provides for depreciation of property and equipment over the following
estimated useful lives:

Transportation and towing equipment............................... 5 years
Machinery and other equipment..................................... 7 years
Leasehold improvements............................................ 7-20 years
Furniture and fixtures............................................ 7 years

(f) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Auto Service on bank loans
with similar terms and maturities, the fair value of Auto Service's financial
instruments approximates their carrying values.

F-78

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(g) Income Taxes

(h) Use of Estimates

Management of Auto Service has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

(i) Interim Financial Statements

(2) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)

Transportation and towing equipment................ $1,425,655 $1,414,374
Machinery and other equipment...................... 169,403 157,859
Leasehold improvements............................. 29,614 31,811
Furniture and fixtures............................. 39,175 40,442
---------- ----------
Total.............................................. 1,663,847 1,644,486
Less accumulated depreciation and amortization..... (857,344) (880,148)
---------- ----------
$ 806,503 $ 764,338
========== ==========

Depreciation and amortization of property and equipment in 1997 totaled
$177,150.

(3) INDEBTEDNESS

Auto Service's long-term debt consisted of the following:

DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)

Note payable to bank, payable in monthly
installments of $1,042, including interest at
10.5%, maturing August 1998....................... $ 8,333 $ 5,207
Note payable to unrelated individuals payable in
monthly installments of $2,794, including interest
at 10%, maturing November 2008. Guaranteed by the
owners of Auto Service and secured by a Pledge
Agreement for all authorized shares of stock of
Auto Service...................................... 221,268 218,392
-------- --------
Total long-term debt............................. 229,601 223,599
Less installments due within one year.............. (20,275) (17,450)
-------- --------
Long-term debt, excluding current installments... $209,326 $206,149
======== ========

F-79

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Annual maturities of long-term debt for the next five years and thereafter
are as follows:

1998................................................................ $ 20,275
1999................................................................ 13,193
2000................................................................ 14,574
2001................................................................ 16,100
2002................................................................ 17,786
Thereafter.......................................................... 147,673
--------
$229,601
========

(4) LEASES

Auto Service is obligated under various capital leases for vehicles,
equipment and furniture and fixtures that expire at various dates ranging
between January 1998 to August 2003.

Auto Service is obligated to the stockholder under a capital lease for a
vehicle through December 1999.

Following is a summary of property and equipment held under the capital
leases:

DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)

Transportation and towing equipment................... $1,136,544 $1,136,544
Other equipment....................................... 55,350 55,350
Furniture and fixtures................................ 18,240 18,240
---------- ----------
1,210,134 1,210,134
Less accumulated amortization......................... (519,886) (553,639)
---------- ----------
$ 690,248 $ 656,495
========== ==========

Auto Service leases the office building and a vehicle used for its
operations from the stockholder. These leases are classified as operating
leases and have been included in the data presented below. The building lease
is for an initial three-year term expiring in May 1998 with an option to renew
for five years. The lease was renewed on January 1997 and expires April 2003.
The vehicle lease has indefinite terms with a 30 day notice. Auto Service is
responsible for all operating costs related to these properties.

Auto Service also leases another building used for its operations from an
unrelated party. This lease is classified as an operating lease and is
included in the data presented below. The lease expires October 2002.

Total rent expense for 1997 was $151,393, including $64,654 paid to the
stockholder.

Future minimum lease payments under noncancelable operating leases (with
initial or remaining lease terms in excess of one year) and future minimum
capital lease payments as of December 31, 1997 are:

CAPITAL OPERATING
LEASES LEASES

1998..................................................... $310,859 106,800
1999..................................................... 253,159 106,800
2000..................................................... 132,122 106,800
2001..................................................... 85,626 106,800
2002..................................................... 68,505 98,500
Thereafter............................................... 28,795 19,000
-------- -------
Total.................................................. 879,066 544,700
=======
Less amount representing interest........................ (139,541)
--------
Present value of net minimum capital lease payments...... $739,525
========

F-80

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(5) INCOME TAXES

Income tax expense for the year ended December 31, 1997 consists of:

Current:
Federal......................................................... $42,934
State........................................................... 12,948
-------
55,882
Deferred.......................................................... (6,786)
-------
$49,096
=======

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate.

Computed expected tax expense.................................... $ 55,382
State income taxes, net of Federal benefit....................... 8,546
Meals and entertainment.......................................... 1,372
Adjustment to prior years' taxes................................. (17,770)
Other............................................................ 1,566
--------
$ 49,096
========

The tax effects of temporary differences that give rise to deferred tax
liabilities as of December 31, 1997 are presented below:

Deferred tax liability:
Property and equipment, due to differences in depreciation lives
and methods.................................................... $82,965
-------
Net deferred tax liability.................................... $82,965
=======

At December 31, 1996, the net deferred tax liability was $89,751 and there
was no recorded valuation allowance.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies, as
well as carryback opportunities, in making this assessment. Based upon the
level of historical taxable income, projections for future taxable income and
carryback opportunities over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not Auto Service will
realize the benefits of these deductible differences. The amount of the
deferred tax asset considered realizable, however, could be reduced in the
near term if estimates of future taxable income are reduced.

(6) NON-CASH TRANSACTIONS

During 1997, Auto Service leased $66,561 of certain vehicles through lending
institutions.

F-81

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(7) CONCENTRATION OF BUSINESS RISKS

For 1997, 33% of Auto Service's revenues were derived from one customer,
Automobile Association of America (AAA). On May 8, 1998, the Automobile
Association of America (AAA) terminated its relationship with Auto Service.
The loss of this customer could significantly effect Auto Service's
performance.

(8) SUBSEQUENT EVENT

(a) During February 1998, the stockholder entered into a definitive
agreement to sell Auto Service to United Road Services, Inc. The transaction,
effected through a combination of cash and common stock of United Road
Service, Inc., is contingent and effective upon the initial public offering of
the common stock of United Road Service, Inc. The anticipated selling price of
Auto Service exceeds its net assets as of December 31, 1997.

(b) Concurrently with the acquisition, United Road Service, Inc. will enter
into agreements with the stockholder to lease land and buildings used in Auto
Service's operations for negotiated amounts and terms.

(c) On May 6, 1998, United Road Services, Inc. effectively acquired Auto
Service as a result of the successful completion of the initial public
offering of the common stock of United Road Services, Inc.

F-82

INDEPENDENT AUDITORS' REPORT

The Board of Directors

MPG Transco, Ltd.:

We have audited the accompanying balance sheets of MPG Transco, Ltd. as of
July 31, 1997 and 1998, and the related statements of operations,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of MPG Transco, Ltd. as of
July 31, 1997 and 1998, and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.

/s/ KPMG LLP

Detroit, Michigan

December 11, 1998

F-83

MPG TRANSCO, LTD.

BALANCE SHEETS

JULY 31,
---------------------- OCTOBER 31,
1997 1998 1998
ASSETS ----------- ---------- -----------
(UNAUDITED)

Current assets:
Cash and cash equivalents................. $ 88,927 1,074,291 347,593
Trade accounts receivable, net of
allowance for doubtful accounts of
$100,000 in 1997 and 1998................ 1,368,797 1,986,064 1,957,619
Accounts receivable from employees........ 12,016 52,853 42,073
Income tax receivable (note 7)............ 152,991 -- --
Prepaid and other current assets (note 2). 344,503 158,569 111,853
Deferred income taxes (note 7)............ 101,824 208,225 171,418
----------- ---------- ----------
Total current assets.................... 2,069,058 3,480,002 2,630,556
Property and equipment, net (notes 3 and 5). 11,504,108 9,655,810 10,630,088
Cash surrender value of officer's life
insurance.................................. 246,065 302,734 320,045
Other assets................................ 28,200 27,700 27,700
----------- ---------- ----------
Total assets............................ $13,847,431 13,466,246 13,608,389
=========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit (note 5)................... $ 1,125,000 999,580 986,224
Current installments of notes payable
(note 5)................................. 3,170,821 1,799,544 2,004,499
Accounts payable.......................... 759,029 879,062 818,074
Due to related party (note 9)............. 95,982 894,794 23,936
Income taxes payable (note 7)............. -- 625,665 739,706
Other accrued liabilities (note 4)........ 689,317 920,460 891,820
----------- ---------- ----------
Total current liabilities............... 5,840,149 6,119,105 5,464,259
Long-term liabilities:
Notes payable, excluding current
installments (note 5).................... 2,526,498 846,588 1,421,428
Deferred income taxes (note 7)............ 1,360,324 1,460,514 1,462,047
----------- ---------- ----------
Total liabilities....................... 9,726,971 8,426,207 8,347,734
----------- ---------- ----------
Stockholders' equity:
Common stock, no par value. 10,000 shares
authorized; 1,000 shares issued and
outstanding.............................. 1,000 1,000 1,000
Paid-in capital in excess of stated value. 1,417,234 1,417,234 1,417,234
Retained earnings......................... 2,702,226 3,621,805 3,842,421
----------- ---------- ----------
Total stockholders' equity.............. 4,120,460 5,040,039 5,260,655
----------- ---------- ----------
Total liabilities and stockholders'
equity................................. $13,847,431 13,466,246 13,608,389
=========== ========== ==========

See accompanying notes to financial statements.

F-84

MPG TRANSCO, LTD.

STATEMENTS OF OPERATIONS

THREE MONTHS ENDED
YEARS ENDED JULY 31, OCTOBER 31,
----------------------- --------------------
1997 1998 1997 1998
----------- ---------- --------- ---------
(UNAUDITED)

Net revenue..................... $20,469,778 23,471,030 5,813,482 5,816,476
Cost of revenue................. 14,503,066 16,093,952 3,991,915 4,136,818
----------- ---------- --------- ---------
Gross profit................ 5,966,712 7,377,078 1,821,567 1,679,658
Selling, general and
administrative expenses......... 5,224,312 5,225,129 1,245,141 1,222,955
----------- ---------- --------- ---------
Income from operations...... 742,400 2,151,949 576,426 456,703
Other income (expense):
Interest expense.............. (472,981) (487,295) (157,336) (76,608)
Interest income............... 19,736 17,453 69 2,457
Other......................... (13,257) (10,731) (1,867) 679
Loss on sale of assets........ (250,767) (132,343) (127,490) (10,234)
----------- ---------- --------- ---------
Income before income taxes.. 25,131 1,539,033 289,802 372,997
Income tax expense (note 7)..... 39,683 619,454 122,578 152,381
----------- ---------- --------- ---------
Net income (loss)........... $ (14,552) 919,579 167,224 220,616
=========== ========== ========= =========

See accompanying notes to financial statements.

F-85

MPG TRANSCO, LTD.

STATEMENTS OF STOCKHOLDERS' EQUITY

PAID-IN
CAPITAL IN TOTAL
COMMON EXCESS OF RETAINED STOCKHOLDERS'
STOCK STATED VALUE EARNINGS EQUITY
------ ------------ --------- -------------

Balance at July 31, 1996........... $1,000 1,417,234 2,716,778 4,135,012
Net loss--Year ended July 31, 1997. -- -- (14,552) (14,552)
------ --------- --------- ---------
Balance at July 31, 1997........... 1,000 1,417,234 2,702,226 4,120,460
Net income--Year ended July 31,
1998............................... -- -- 919,579 919,579
------ --------- --------- ---------
Balance at July 31, 1998........... 1,000 1,417,234 3,621,805 5,040,039
Net income--
Three months ended October 31,
1998 (unaudited)................ -- -- 220,616 220,616
------ --------- --------- ---------
Balance at October 31, 1998
(unaudited)........................ $1,000 1,417,234 3,842,421 5,260,655
====== ========= ========= =========

See accompanying notes to financial statements.

F-86

MPG TRANSCO, LTD.

STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED
YEARS ENDED JULY 31, OCTOBER 31,
----------------------- ----------------------
1997 1998 1997 1998
----------- ---------- ---------- ----------
(UNAUDITED)

Cash flows from operating
activities:
Net income (loss)............. $ (14,552) 919,579 167,224 220,616
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization............... 1,392,177 1,526,643 405,590 404,264
Deferred income taxes....... 192,674 (6,211) -- 38,340
Loss on sale of property and
equipment.................. 250,767 132,343 127,490 10,234
(Increase) decrease in trade
accounts
receivable................. (111,392) (617,267) (461,594) 28,445
(Increase) decrease in
accounts receivable from
employees.................. (12,016) (40,837) (15,616) 10,780
(Increase) decrease in
income tax receivable...... (152,991) 152,991 152,991 --
(Increase) decrease in
prepaid and other
assets..................... (139,705) 129,765 (356,312) 29,405
Increase (decrease) in
accounts payable........... 178,135 120,033 719,500 (60,988)
Increase in income taxes
payable.................... -- 625,665 122,578 114,041
Increase (decrease) in other
accrued
liabilities................ 450,143 231,143 221,578 (28,640)
----------- ---------- ---------- ----------
Net cash provided by (used
in) operating activities. 2,033,240 3,173,847 1,083,429 766,497
----------- ---------- ---------- ----------
Cash flows from investing
activities:
Purchases of property and
equipment.................... (4,517,395) (227,568) (40,214) (1,450,467)
Proceeds from sale of
equipment.................... 400,144 416,880 322,193 61,691
----------- ---------- ---------- ----------
Net cash provided by (used
in) investing activities. (4,117,251) 189,312 281,979 (1,388,776)
----------- ---------- ---------- ----------
Cash flows from financing
activities:
Net borrowings (repayment) on
line of credit............... 1,125,000 (125,420) 277,835 (13,356)
Proceeds from long-term debt.. 1,051,227 -- -- 1,367,170
Principal payments on long-
term debt.................... (973,590) (3,051,187) (1,087,873) (587,375)
Increase (decrease) in due to
related party................ 719,699 798,812 319,095 (870,858)
----------- ---------- ---------- ----------
Net cash provided by (used
in) financing activities. 1,922,336 (2,377,795) (490,943) (104,419)
----------- ---------- ---------- ----------
Net change in cash and cash
equivalents................... (161,675) 985,364 874,465 (726,698)
Cash and cash equivalents at
beginning of period........... 250,602 88,927 88,927 1,074,291
----------- ---------- ---------- ----------
Cash and cash equivalents at
end of period................. $ 88,927 1,074,291 963,392 347,593
=========== ========== ========== ==========
Supplemental disclosure of cash
flow information:
Cash paid (received) during the
period for:
Interest.................... $ 472,981 487,296 157,336 76,608
=========== ========== ========== ==========
Income taxes................ $ -- (152,991) -- --
=========== ========== ========== ==========

See accompanying notes to financial statements.

F-87

MPG TRANSCO, LTD.

NOTES TO FINANCIAL STATEMENTS

JULY 31, 1997 AND 1998

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

MPG Transco, Ltd.'s (MPG) primary business is transporting vehicles for
automotive manufacturers and transporting consumer merchandise for major
retail manufacturers. MPG's automotive operations utilize three terminals in
Toledo, Boston and Newark, while the consumer merchandise operation uses a
terminal in Allen Park, Michigan. MPG operates approximately 140 vehicles.

(b) Revenue Recognition

MPG operates as one segment related to the transportation of vehicles and
consumer merchandise for customers.

MPG's revenue is derived from customers who require transportation of
vehicles and consumer merchandise. Transport revenue is recognized upon the
delivery of the vehicles and consumer merchandise to their final destination.
Expenses related to the generation of revenue are recognized as incurred.

For purposes of the statement of cash flows, MPG considers all highly liquid
debt instruments with original maturities of three months or less to be cash
equivalents.

(d) Property and Equipment

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes, MPG
provides for depreciation of property and equipment over the following
estimated useful lives.

Transportation equipment...................................... 10 years
Furniture and fixtures........................................ 5 years
Office equipment.............................................. 5 years
Automobiles................................................... 5 years
Leasehold improvements........................................ 3-5 years

(e) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to MPG on bank loans with
similar terms and maturities, the fair value of MPG's financial instruments
approximates their carrying values.

(f) Income Taxes

F-88

MPG TRANSCO, LTD.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(g) Use of Estimates

Management of MPG has made a number of estimates and assumptions relating to
the reporting of assets and liabilities and the disclosure of contingent assets
and liabilities to prepare these financial statements in conformity with
generally accepted accounting principles. Actual results could differ from
those estimates.

(h) Interim Financial Statements

(2) PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consist of the following:

JULY 31,
---------------- OCTOBER 31,
1997 1998 1998
-------- ------- -----------
(UNAUDITED)

Prepaid insurance.................................. $235,245 17,609 13,484
Prepaid vehicle registration....................... 77,552 82,185 47,442
Other.............................................. 31,706 58,775 50,927
-------- ------- -------
$344,503 158,569 111,853
======== ======= =======

(3) PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

JULY 31,
---------------------- OCTOBER 31,
1997 1998 1998
----------- ---------- -----------
(UNAUDITED)

Transportation equipment.................... $13,430,048 12,555,659 13,850,320
Office equipment and furniture.............. 186,782 186,782 190,578
Computer equipment.......................... 781,133 897,094 936,670
Automobiles................................. 320,454 235,317 214,543
Leasehold improvements...................... 82,005 104,805 104,805
----------- ---------- ----------
Total....................................... 14,800,422 13,979,657 15,296,916
Less accumulated depreciation and
amortization................................ 3,296,314 4,323,847 4,666,828
----------- ---------- ----------
$11,504,108 9,655,810 10,630,088
=========== ========== ==========

(4) OTHER ACCRUED LIABILITIES

Other accrued liabilities consist of the following:

JULY 31,
---------------------- OCTOBER 31,
1997 1998 1998
----------- ---------- -----------
(UNAUDITED)

Accrued payroll............................. $ 554,247 237,000 386,000
Accrued bonus............................... -- 212,000 212,000
Accrued vacation............................ 50,000 55,000 55,000
Accrued lease termination................... -- 132,257 88,172
Accrued customer damage claims.............. -- 90,146 49,000
Other....................................... 85,070 194,057 101,648
----------- ---------- ----------
$ 689,317 920,460 891,820
=========== ========== ==========

F-89

MPG TRANSCO, LTD.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(5) INDEBTEDNESS

Long-term debt consists of the following:

JULY 31,
------------------ OCTOBER 31,
1997 1998 1998
---------- ------- -----------
(UNAUDITED)

Note payable to Associates Commercial
Corporation, payable in monthly installments
of $59,816, including interest at 7.75%,
maturing January 2000. Secured by
transportation equipment...................... $1,577,222 960,087 798,206
Note payable to Michigan National Bank, payable
in monthly installments of $28,023, including
interest at 7.65%, maturing January 2000.
Secured by transportation equipment........... 762,993 475,346 399,665
Note payable to Financial Federal Credit, Inc.,
payable in monthly installments of $18,546,
including interest at 9.25%, maturing July
2000. Secured by transportation equipment..... 565,945 404,325 357,885
Note payable to Concord Commercial Corporation,
payable in monthly installments of $21,016,
including interest at 8.20%, maturing October
1998. Secured by transportation equipment..... 298,649 62,196 --
Note payable to Associates Commercial
Corporation, payable in monthly installments
of $26,601, including interest at 8.00%,
maturing October 1998. Secured by
transportation equipment...................... 402,434 78,751 --
Note payable to Navistar Financial Corporation,
payable in monthly installments of $51,043,
including interest at 8.00%, scheduled to
mature August 1998. Secured by transportation
equipment..................................... 563,629 81,499 35,309
Note payable to Concord Commercial Corporation,
payable in monthly installments of $24,728,
including interest at 8.00%, maturing October
1997. Secured by transportation equipment..... 73,079 -- --
Note payable to NBD Equipment Finance, Inc.,
payable in monthly installments of $9,557,
including interest at 8.57%, scheduled to
mature April 1998. Secured by transportation
equipment..................................... 85,633 -- --
Note payable to Michigan National Bank, payable
in monthly installments of $14,945, including
interest at 8.85%, maturing March 1998.
Secured by transportation equipment........... 115,686 -- --
Note payable to Michigan National Bank, payable
in monthly installments of $11,614, including
interest at 8.85%, maturing August 1997.
Secured by transportation equipment........... 185,924 -- --
Note payable to General Electric Capital
Corporation, payable in monthly installments
of $30,471, including interest at 7.45%,
maturing January 2000. Secured by
transportation equipment...................... 849,010 535,070 453,140

F-90

MPG TRANSCO, LTD.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JULY 31,
-------------------- OCTOBER 31,
1997 1998 1998
---------- --------- -----------
(UNAUDITED)

Note payable to General Electric Capital
Corporation, payable in monthly installments
of $20,082 until October 2001 and $1,521
thereafter, including interest at 6.6%,
maturing July 2003. Secured by
transportation equipment.................... $ -- -- 682,265
Note payable to General Electric Capital
Corporation, payable in monthly installments
of $20,454 until September 2001 and $1,541
thereafter, including interest at 7.5%,
maturing September 2003. Secured by
transportation equipment.................... -- -- 668,732
Various other notes payable secured by
transportation equipment.................... 104,686 --
Various other notes payable secured by
automobile equipment........................ 112,429 48,858 30,725
---------- --------- ---------
Total long-term debt.................... 5,697,319 2,646,132 3,425,927
Less current installments.................... 3,170,821 1,799,544 2,004,499
---------- --------- ---------
Long-term debt, excluding current
installments........................... $2,526,498 846,588 1,421,428
========== ========= =========

Annual maturities of long-term as of July 31, 1998 are as follows:

1999......................................................... $1,799,544
2000......................................................... 846,588
----------
$2,646,132
==========

(6) LEASES

MPG leases its operating facility and other equipment from third parties
under noncancelable operating leases. Rent expense in 1997 and 1998 was
$789,315 and $719,851, respectively.

Future minimum operating lease payments as of July 31, 1998 are:

1999........................................................... $ 598,199
2000........................................................... 625,334
2001........................................................... 584,010
2002........................................................... 297,131
2003........................................................... 63,369
----------
Total...................................................... $2,168,043
==========

F-91

MPG TRANSCO, LTD.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(7) INCOME TAXES

Income tax expense (benefit) for the years ended July 31, 1997 and 1998
consists of the following:

1997 1998
--------- -------

Current:
Federal............................................. $(152,991) 511,665
State............................................... -- 114,000
--------- -------
(152,991) 625,665
Deferred--federal..................................... 192,674 (6,211)
--------- -------
$ 39,683 619,454
========= =======

The following table reconciles the expected tax expense at the federal
statutory tax rate to the effective tax rate.

YEARS ENDED JULY
31,
----------------
1997 1998
-------- -------

Computed expected tax.................................... $ 8,545 523,271
Non-deductible expenses.................................. 31,138 20,943
State income taxes, net of federal tax benefit........... -- 75,240
-------- -------
$ 39,683 619,454
======== =======

The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities as of July 31, 1997 and 1998 are presented
below:

1997 1998
---------- ---------

Deferred tax assets:
Allowance for doubtful accounts................... $ 34,000 34,000
Accrued expenses not currently deductible......... 67,824 174,225
---------- ---------
Gross deferred tax assets....................... 101,824 208,225
---------- ---------
Deferred tax liabilities--property and equipment,
due to differences in depreciation lives and
methods............................................ 1,360,324 1,460,514
---------- ---------
Net deferred tax liability...................... $1,258,500 1,252,289
========== =========

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies, as
well as carryback opportunities, in making this assessment. Based upon the
level of historical taxable income, projections for future taxable income and
carryback opportunities over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not that MPG will
realize the benefits of these deductible differences. The amount of the
deferred tax asset considered realizable, however, could be reduced in the
near term if estimates of future taxable income are reduced.

F-92

MPG TRANSCO, LTD.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(8) EMPLOYEE BENEFITS

All employees of MPG are employed by Translesco, a related entity owned by
the same shareholders of MPG, and leased by MPG.

Translesco has a retirement savings plan pursuant to section 401(k) of the
Internal Revenue Code that is available to all employees with at least 90 days
of service to Translesco and who are at least 18 years of age. Eligible
participants may contribute up to 20% of their compensation. MPG does not make
contributions to the plan. The accompanying financial statements include all
payroll and related costs associated with the employees serving MPG.

(9) RELATED PARTY TRANSACTIONS

MPG and Translesco maintain a combined cash management system. As a result
of this arrangement, approximately $96,000 and $895,000 were due to Translesco
at July 31, 1997 and 1998, respectively. For the years ended July 31, 1997 and
1998, average balances due Translesco were less than $100,000 except for a
borrowing in June, 1998, of $1,250,000 and repayments of approximately
$355,000 in July, 1998.

(10) CONTINGENT LIABILITIES

Various legal claims arise against MPG during the normal course of business.
In the opinion of management, liabilities, if any, arising from proceedings
would not have a material effect on the financial statements.

(11) SUBSEQUENT EVENTS

The stockholders of the Company entered into a definitive agreement on
November 13, 1998 to sell MPG Transco, Ltd. to United Road Services.

(12) CONCENTRATION OF BUSINESS RISKS

Sales to the Company's three largest customers, General Motors, Volkswagen
and Mercedes-Benz, amounted to 22%, 10% and 10%, respectively, of total
revenues for the year ended July 31, 1997 and 43%, 14% and 8%, respectively,
for the year ended July 31, 1998. The loss of one or all of these customers
could significantly affect MPG's performance.

F-93

INDEPENDENT AUDITORS' REPORT

To the Board of Directors

Pilot Transport, Inc.

We have audited the accompanying balance sheets of Pilot Transport, Inc. as
of December 31, 1996 and 1997, and the related statements of operations,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Pilot Transport, Inc. as
of December 31, 1996 and 1997, and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted
accounting principles.

/s/ KPMG LLP

Detroit, Michigan

November 12, 1998

F-94

PILOT TRANSPORT, INC.

BALANCE SHEETS

DECEMBER 31,
-------------------- SEPTEMBER 30,
1996 1997 1998
---------- --------- -------------
(UNAUDITED)

ASSETS
Current assets:
Cash....................................... $ 13,853 12,413 181,442
Accounts receivable........................ 1,703,812 1,268,230 1,944,997
Prepaid expenses........................... 57,545 76,355 55,428
Contracts for trailer purchases (note 6)... 99,458 194,510 560,471
---------- --------- ---------
Total current assets.................... 1,874,668 1,551,508 2,742,338
Vehicles and equipment, net (note 2)........ 5,071,066 4,283,866 3,680,568
---------- --------- ---------
Total assets............................ $6,945,734 5,835,374 6,422,906
========== ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Loan payable (note 3)...................... $2,200,000 1,050,000 2,005,000
Accounts payable........................... 164,100 73,276 240,236
Accrued bonus and profit sharing........... -- -- 792,326
Other accrued expenses..................... 160,000 236,852 272,528
---------- --------- ---------
Total current liabilities............... 2,524,100 1,360,128 3,310,090
---------- --------- ---------
Stockholders' equity:
Common stock, $1 par value; 1,000,000
shares authorized, 10,000 shares issued
and outstanding........................... 10,000 10,000 10,000
Retained earnings.......................... 4,411,634 4,465,246 3,102,816
---------- --------- ---------
Total stockholders' equity.............. 4,421,634 4,475,246 3,112,816
---------- --------- ---------
Total liabilities and stockholders'
equity................................. $6,945,734 5,835,374 6,422,906
========== ========= =========

See accompanying notes to the financial statements.

F-95

PILOT TRANSPORT, INC.

STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS
FOR THE YEARS ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
-------------------------- ------------------------
1996 1997 1997 1998
------------ ------------ ----------- -----------
(UNAUDITED)

Transportation revenue... $ 14,381,761 17,118,927 13,135,339 14,405,086
Cost of revenue.......... 9,386,529 10,066,642 7,463,219 8,906,264
------------ ------------ ----------- -----------
Gross profit......... 4,995,232 7,052,285 5,672,120 5,498,822
Selling, general and
administrative expense... 2,920,385 4,009,480 3,149,367 3,090,791
------------ ------------ ----------- -----------
Income from
operations.......... 2,074,847 3,042,805 2,522,753 2,408,031
Other income (expense):
Interest................ (249,378) (167,880) (144,432) (113,612)
Loss on sale of assets.. (48,926) (167,047) (151,709) (31,640)
------------ ------------ ----------- -----------
Income before income
tax................. 1,776,543 2,707,878 2,226,612 2,262,779
Income taxes (note 1).... -- -- -- --
------------ ------------ ----------- -----------
Net income........... $ 1,776,543 2,707,878 2,226,612 2,262,779
============ ============ =========== ===========

See accompanying notes to the financial statements.

F-96

PILOT TRANSPORT, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

TOTAL
COMMON RETAINED STOCKHOLDERS'
STOCK EARNINGS EQUITY
------- ---------- -------------

Balance at December 31, 1995................. $10,000 3,903,266 3,913,266
Net income--1996............................. -- 1,776,543 1,776,543
Dividends.................................... -- (1,268,175) (1,268,175)
------- ---------- ----------
Balance at December 31, 1996................. 10,000 4,411,634 4,421,634
Net income--1997............................. -- 2,707,878 2,707,878
Dividends.................................... -- (2,654,266) (2,654,266)
------- ---------- ----------
Balance at December 31, 1997................. 10,000 4,465,246 4,475,246
Net income nine months ended September 30,
1998 (unaudited)............................ -- 2,262,779 2,262,779
Dividends (unaudited)........................ -- (3,625,209) (3,625,209)
------- ---------- ----------
Balance at September 30, 1998 (unaudited).... $10,000 3,102,816 3,112,816
======= ========== ==========

See accompanying notes to the financial statements.

F-97

PILOT TRANSPORT, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER NINE MONTHS ENDED
31, SEPTEMBER 30,
---------------------- ----------------------
1996 1997 1997 1998
---------- ---------- ---------- ----------
(UNAUDITED)

Cash flows from operating
activities:
Net income.................... $1,776,543 2,707,878 2,226,612 2,262,779
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization............... 797,272 815,703 606,964 599,660
Loss on sale of equipment... 48,926 167,047 151,709 31,640
Decrease (increase) in
accounts receivable........ 503,556 435,582 (367,252) (676,767)
Decrease (increase) in
prepaid expenses........... 85,253 (18,810) (26,135) 20,927
Decrease (increase) in
equipment deposits and
other...................... (94,458) (95,052) 12,848 (365,961)
Increase (decrease) in
accounts payable and
accrued expenses........... 96,244 (13,972) 948,292 994,962
---------- ---------- ---------- ----------
Net cash provided by
operations............... 3,213,336 3,998,376 3,553,038 2,867,240
---------- ---------- ---------- ----------
Cash flows from investing
activities:
Purchases of vehicles and
equipment.................... (1,625,686) (905,247) (799,532) (536,703)
Proceeds from sale of
equipment.................... 338,850 709,695 610,695 508,701
---------- ---------- ---------- ----------
Net cash used in investing
activities............... (1,286,836) (195,552) (188,837) (28,002)
---------- ---------- ---------- ----------
Cash flows from financing
activities:
Net borrowings (repayments)
from facility loan........... (675,000) (1,150,000) (700,000) 955,000
Dividends paid................ (1,268,175) (2,654,264) (2,654,264) (3,625,209)
---------- ---------- ---------- ----------
Net cash used in financing
activities............... (1,943,175) (3,804,264) (3,354,264) (2,670,209)
---------- ---------- ---------- ----------
Net increase (decrease) in
cash..................... (16,675) (1,440) 9,937 169,029
Cash at beginning of period.... 30,528 13,853 13,853 12,413
---------- ---------- ---------- ----------
Cash at end of period.......... $ 13,853 12,413 23,790 181,442
---------- ---------- ---------- ----------
Supplemental disclosures:
Interest paid................. $ 249,638 168,019 144,571 100,791
========== ========== ========== ==========
Income taxes paid............. $ -- -- -- --
========== ========== ========== ==========

See accompanying notes to the financial statements.

F-98

PILOT TRANSPORT, INC.

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1996 AND 1997 AND THE

NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998 (UNAUDITED)

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Pilot Transport Inc. (the Company) operates a fleet of automobile carriers
and provides transportation of automobiles nationwide, primarily to the
automotive manufacturers. The Company's corporate headquarters are located in
Brighton, Michigan and it has an office in Tempe, Arizona.

(b) Revenue Recognition

The Company operates one segment related to the transportation of vehicles.

The Company's revenue is derived from customers who require transportation
of vehicles. Transport revenue is recognized upon the delivery of the vehicles
to their final destination. Expenses related to the generation of revenue are
recognized as incurred.

Vehicles and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the estimated
useful lives of the individual assets. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes, the
Company provides for depreciation of vehicles and equipment over the following
estimated useful lives.

Transportation equipment......................................... 10 years
Furniture and fixtures........................................... 5 years
Office and warehouse equipment................................... 5 years
Automobiles...................................................... 5 years

(d) Income Taxes

The Company has elected to be taxed under the provisions of Subchapter S of
the Internal Revenue Code. Under those provisions, the Company does not pay
Federal corporate income taxes on its taxable income. Instead, the
stockholders are liable for individual Federal and state income taxes on their
respective shares of the Company's taxable income. The State of Michigan has a
tax based primarily on gross sales and the corporation is subject to this tax.
Other states have various corporate taxes not based upon income and the
corporation is subject to these taxes. All state taxes are included in
selling, general and administrative expense.

The Company utilizes accelerated depreciation for transportation equipment
in reporting taxable income to its shareholders. This results in a lower tax
basis for assets than is reported in the accompanying financial statements of
$2,445,469, $2,027,962 and $1,729,441 at December 31, 1996 and 1997 and at
September 30, 1998, respectively.

(e) Use of Estimates

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

F-99

PILOT TRANSPORT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(f) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current variable borrowing rates available to the Company on its bank
borrowings, the fair value of the Company's financial instruments approximates
their carrying values.

(g) Interim Financial Statements

(2) VEHICLES AND EQUIPMENT

Vehicles and equipment consist of the following:

DECEMBER 31,
--------------------- SEPTEMBER 30,
1996 1997 1998
----------- --------- ------------- ---

Transportation equipment.. $ 7,306,993 6,316,499 5,600,964
Automobiles............... 68,168 68,168 45,586
Office equipment.......... 223,509 270,801 323,033
Warehouse equipment and
improvements............. 74,166 74,166 93,516
----------- --------- ---------
7,672,836 6,729,634 6,063,099
Accumulated depreciation.. 2,601,770 2,445,768 2,382,531
----------- --------- ---------
Net vehicles and
equipment.............. $ 5,071,066 4,283,866 3,680,568
=========== ========= =========

(3) FACILITY LOAN PAYABLE

A note payable to Comerica Bank is a Secured Accounts Financing Facility
("Facility") Master Revolving Note with a variable rate (at one-half a
percentage point less than prime rate) and is due on demand. The Facility is
renewed annually. The Company can borrow up to $5,000,000 for working capital
and the purchase of equipment. Advances and required repayments are determined
by a formula which is based upon a percentage of eligible accounts receivable,
the price of new equipment and a predetermined sliding scale of existing
equipment. Collateral for this note is a first lien on all accounts
receivable, vehicles and equipment. In addition, there is a third collateral
position on Michigan real estate owned by the Pilot Partners, LLC (see note
5).

(4) PENSION PLAN

The Company has a 401(k) profit-sharing plan for substantially all employees
who are over 21 years of age and have six months of service. Contributions are
not required by the Company; however, when made, they are determined as a
percentage of each eligible employee's salary. The Company contributions for
the years ended December 31, 1996 and 1997 and the nine months ended September
30, 1997 and 1998 (unaudited) were $223,106, $250,991, $158,396 and $286,485,
respectively.

(5) RELATED PARTY TRANSACTIONS

The Company has entered into several agreements with various partnerships
owned by the shareholders of Pilot Transport, Inc. Following is a summary of
the significant activities between the Company and the partnerships:

(a) Equipment Leases

The Company leased trailers from three family partnerships. The leases
expired in March 1997 and were not renewed. The Company had the responsibility
to repair, maintain and insure the equipment during the lease

F-100

PILOT TRANSPORT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

period. The Company paid these partnerships $96,000, $24,000, $24,000 and $0
in lease payments for the years ending December 31, 1996 and 1997 and the nine
months ended September 30, 1997 and 1998 (unaudited), respectively.

(b) Building and Land Lease

The Company leases an office building in Brighton, Michigan and land in
Tempe, Arizona from partnerships owned by the principal shareholders. All
leases require the Company to maintain the facility and insure its contents.
The lease of the land in Tempe, Arizona was terminated in March 1997. The
Brighton property lease expires in March 1999 and requires monthly payments of
$11,400. The Company paid the partnerships $180,000, $147,000, $135,000 and
$102,600 for the years ending December 31, 1996 and 1997 and the nine months
ended September 30, 1997 and 1998 (unaudited), respectively, for rental of
these facilities.

(6) LONG-TERM LEASES

The Company has entered into various operating leases for a building and
certain tractors and trailers used in providing transportation services to its
customers. The leases of tractors and trailers are generally over a 49-month
period. Following is a schedule of future minimum rental payments required as
of December 31, 1997 (including related party leases discussed in note 5(b)),
which includes new leases beginning at various dates in 1998 with monthly
payments of $50,650.

YEAR ENDING
DECEMBER 31, AMOUNT
------------ -----------

1998........................................................ $ 1,104,315
1999........................................................ 1,079,354
2000........................................................ 1,023,666
2001........................................................ 919,071
2002........................................................ 285,190

Rental expense for the years ended December 31, 1996 and 1997 and the nine
months ended September 30, 1997 and 1998 (unaudited) was $350,281, $483,959,
$332,071 and $775,621, respectively.

The Company purchased six new "closed" trailers at September 30, 1998, for
which the purchase price has been deposited with the vendor as final
modifications are being made. It is anticipated these units will be delivered
and placed into service in the fourth quarter of 1998. Upon delivery of these
trailers, they will be subject to a sale lease-back under which the trailers
will be sold at cost and leased back.

(7) SIGNIFICANT CONCENTRATION OF CREDIT RISK

Approximately 65% of the Company's revenues for each of the years ended
December 31, 1996 and 1997 and the nine months ended September 30, 1997 and
1998 were generated from General Motors and its subdivisions. The Company has
entered into a three-year contract with General Motors which expires

January 1, 2001 to transport vehicles at a predetermined fixed fee on select
routes throughout the United States. Additional business is done on other
routes at prevailing transportation rates. At September 30, 1998 and December
31, 1997 and 1996, the accounts receivable from General Motors and its
subdivisions represented approximately 60% of the total.

(8) SUBSEQUENT EVENT

The stockholders of the Company entered into a definitive agreement on
November 5, 1998 to sell Pilot Transport, Inc. to United Road Services.

F-101

INDEPENDENT AUDITORS' REPORT

The Stockholders
E&R Towing & Garage, Inc.
and Subsidiaries:

We have audited the accompanying consolidated balance sheet of E&R Towing &
Garage, Inc. and Subsidiaries (E&R) as of February 28, 1998, and the related
consolidated statements of operations and retained earnings, and cash flows
for the year then ended. These financial statements are the responsibility of
E&R management. Our responsibility is to express an opinion on these financial
statements based on our audit.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of E&R Towing
& Garage, Inc. and Subsidiaries as of February 28, 1998, and the results of
its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

/s/ KPMG LLP

Chicago, Illinois
August 7, 1998

F-102

E&R TOWING & GARAGE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

FEBRUARY
28, JUNE 30,
1998 1998
---------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents............................. $ 256,971 $1,083,564
Accounts receivable................................... 334,975 440,565
Due from E.A.R. (note 10)............................. 908,300 446,480
Notes receivable...................................... 57,653 46,402
Due from officers (note 10)........................... 112,450 --
Deferred tax (note 8)................................. 89,833 --
Prepaid expenses...................................... 82,422 64,434
Management fee receivable............................. -- 107,923
Other receivables..................................... 10,274 13,210
---------- ----------
Total current assets.................................... 1,852,878 2,202,578
Property and equipment, net (note 5).................... 2,008,337 1,795,334
Notes receivable........................................ 38,949 31,348
---------- ----------
Total assets............................................ $3,900,164 $4,029,260
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt (note 6)....... $ 468,467 $ 468,467
Accounts payable...................................... 52,914 110,886
Deferred gain on the sale of fixed assets............. 59,105 59,105
Accrued taxes......................................... 297,937 130,349
Accrued payroll....................................... 62,095 62,600
Other accrued expenses................................ 45,501 15,339
---------- ----------
Total current liabilities............................... 986,019 846,746
Long-term liabilities:
Long-term debt, excluding current installments (note
6)................................................... 481,179 322,590
Deferred gain on the sale of fixed assets............. 36,880 17,179
Deferred tax (note 8)................................. 205,303 231,541
---------- ----------
Total liabilities....................................... 1,709,381 1,418,056
---------- ----------
Stockholders' equity:
Common stock, no par value, stated value of $1,000.
Authorized, issued, and outstanding 1,000 shares in
1998................................................. 1,000 1,000
Additional paid-in capital............................ 159,273 159,273
Retained earnings..................................... 2,030,510 2,450,931
---------- ----------
Total stockholders' equity.............................. 2,190,783 2,611,204
---------- ----------
Total liabilities and stockholders' equity.............. $3,900,164 $4,029,260
========== ==========

See accompanying notes to consolidated financial statements.

F-103

E&R TOWING & GARAGE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

YEAR FOUR-MONTHS FOUR-MONTHS
ENDED ENDED ENDED
FEBRUARY 28, JUNE 30, JUNE 30,
1998 1997 1998
------------ ----------- -----------
(UNAUDITED) (UNAUDITED)

Net revenue............................... $8,527,599 $2,766,519 $2,928,821
Cost of revenue........................... 5,193,019 1,465,810 1,645,115
---------- ---------- ----------
Gross profit.............................. 3,334,580 1,300,709 1,283,706
Selling, general, and administrative
expenses................................. 3,496,981 746,337 898,900
Management fee from affiliate (note 10)... (646,378) (215,460) (237,200)
---------- ---------- ----------
Income from operations.................... 483,977 769,832 622,006
---------- ---------- ----------
Other income (expense):
Other................................... 63 3,851 1,213
Interest income......................... 48,373 520 42,761
Interest expense........................ (113,944) (26,432) (25,260)
Gain on sale of assets.................. 62,405 1,500 19,701
---------- ---------- ----------
Income before income taxes................ 480,874 749,271 660,421
Income tax expense (note 8)............... (187,539) (275,000) (240,000)
---------- ---------- ----------
Net income................................ 293,335 474,271 420,421
Retained earnings at beginning of period.. 1,737,175 1,737,175 2,030,510
---------- ---------- ----------
Retained earnings at end of period........ $2,030,510 $2,211,446 $2,450,931
========== ========== ==========

See accompanying notes to consolidated financial statements.

F-104

E&R TOWING & GARAGE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOUR-MONTHS
YEAR ENDED ENDED JUNE 30
FEBRUARY 28, -------------------
1998 1997 1998
------------ -------- ---------
(UNAUDITED)

Cash flows from operating activities:
Net income.................................. $293,335 474,271 420,421
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation............................... 644,618 209,580 224,709
Gains from sale of property and equipment.. (62,405) (1,500) (19,701)
Deferred income taxes...................... 115,470 115,470 116,071
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable............................... (389,762) (310,786) 356,230
(Increase) decrease in notes receivable... (96,601) -- 18,852
Decrease in due from officers............. 4,000 20,000 112,450
(Increase) decrease in prepaid expenses... (14,022) 15,558 17,988
Increase in management fee receivable..... -- (108,675) (107,923)
Decrease (increase) in other receivables.. 10,644 (3,542) (2,936)
Increase in accounts payable.............. 20,703 56,510 57,972
Increase in accrued payroll............... 4,129 634 505
Increase (decrease) in other accrued
expenses................................. 7,833 27,152 (30,162)
Increase (decrease) in income taxes
payable.................................. 182,240 50,037 (167,588)
-------- -------- ---------
Net cash provided by operating activities.... 720,182 544,709 996,888
-------- -------- ---------
Cash flows from investing activities:
Purchases of property and equipment......... (661,312) (5,780) (11,706)
Proceeds from sale of property and
equipment.................................. 163,711 1,500 --
Proceeds from sale of subsidiary............ 293,006 -- --
-------- -------- ---------
Net cash used in investing activities........ (204,595) (4,280) (11,706)
-------- -------- ---------
Cash flows from financing activities:
Net decrease in borrowings under line of
credit..................................... (250,000) (250,000) --
Principal payments on long-term debt........ (622,713) (206,412) (158,589)
Additional borrowings on long-term debt..... 544,607 -- --
-------- -------- ---------
Net cash used in financing activities........ (328,106) (456,412) (158,589)
-------- -------- ---------
Net increase in cash and cash equivalents.... 187,481 84,017 826,593
Cash and cash equivalents at beginning of
period...................................... 69,490 69,490 256,971
-------- -------- ---------
Cash and cash equivalents at end of period... $256,971 153,507 1,083,564
======== ======== =========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest................................... $113,944 26,432 25,261
Income taxes............................... 41,650 14,920 62,165

See accompanying notes to consolidated financial statements.

F-105

E&R TOWING & GARAGE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 28, 1998

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

E&R Towing & Garage, Inc. and its two wholly owned subsidiaries, E&R Auto,
Inc. and E&R Transport, Inc., (collectively referred to herein as E&R or the
Company) were founded in 1978, 1988, and 1989, respectively. E&R also had a
55% owned subsidiary which was sold during February, 1998. E&R's primary
business is towing vehicles for commercial entities. E&R Towing & Garage, Inc.
(Towing) and E&R Auto, Inc. (Auto) operate primarily in Chicago and Chicago
suburbs. E&R Transport, Inc. (Transport) operates primarily in New Jersey. E&R
owns and operates approximately 70 vehicles.

(b) Principles of Consolidation

All intercompany transactions and balances have been eliminated in
consolidation. In the opinion of management, the financial statements include
all costs of doing business.

E&R's revenue is derived from customers who require a towing service.
Revenue is recognized at the completion of each towing engagement. Expenses
related to the generation of revenue are recognized as incurred.

(d) Property and Equipment

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases, if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes, E&R
provides for depreciation of property and equipment over the following
estimated useful lives:

Transportation and towing equipment............................ 5 years
Leasehold improvements......................................... 5 years
Furniture and fixtures......................................... 7 years
Computers and communications equipment......................... 5-7 years

(e) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to E&R on bank loans with
similar terms and maturities, the fair value of E&R's financial instruments
approximates their carrying values.

(f) Income Taxes

F-106

E&R TOWING & GARAGE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(g) Use of Estimates

Management of E&R has made a number of estimates and assumptions relating to
the reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare these financial statements in conformity
with generally accepted accounting principles. Actual results could differ
from those estimates.

(h) Unaudited Interim Financial Statements

In the opinion of the Company's management, the interim financial statements
as of June 30, 1998 and for the four month periods ended June 30, 1997 and
1998 include all adjustments, consisting of normal recurring accruals, that
are necessary for the fair presentation of the Company's financial position at
June 30, 1998 and its results of operations and cash flows for the interim
periods presented. The results for the four months ended June 30, 1998 are not
necessarily indicative of the results expected for the entire year.

(2) CASH AND CASH EQUIVALENTS

Cash and cash equivalents of $256,971 at February 28, 1998 consist of bank
accounts and short-term investments with an initial term of less than three
months. For purposes of the statement of cash flows, E&R considers all highly
liquid debt instruments with original maturities of three months or less to be
cash equivalents.

(3) INVESTMENT IN S.U.P.

The Company had a 55% owned subsidiary, Summit-U-Pick-A-Part (S.U.P.), a
junkyard. During the year ended February 28, 1998 the Company sold its
ownership in this subsidiary for the amount of its investment. No gain or loss
was incurred upon the sale. At February 28, 1998, the carrying value of this
investment was $-0-.

(4) ALLOWANCE FOR DOUBTFUL ACCOUNTS

During the year ended February 28, 1998, E&R had no write-offs of
uncollectible accounts receivable. E&R has not recorded a provision for the
allowance of doubtful accounts during the year because management believes all
amounts are fully collectible.

(5) PROPERTY AND EQUIPMENT

Property and equipment at February 28, 1998 consist of the following:

Transportation and towing equipment.............................. $3,955,717
Leasehold improvements........................................... 188,902
Furniture and fixtures........................................... 114,913
Computers and communications equipment........................... 225,830
----------
Total............................................................ 4,485,362
Less accumulated depreciation.................................... 2,477,025
----------
$2,008,337
==========

Depreciation of property and equipment in the year ended February 28, 1998
totaled $644,618.

F-107

E&R TOWING & GARAGE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(6) INDEBTEDNESS

E&R's long-term debt consists of the following at February 28, 1998:

Notes payable to Grand National Bank, payable in aggregate monthly
installments of $33,280, including interest ranging from 9.25% to
9.75%, maturing between December 5, 1998 and December 9, 2000.
Secured by the equipment of the Company.......................... $623,328
Notes payable to South Holland Bank, payable in aggregate monthly
installments of $7,617, including interest at 8.98%, maturing
between December 15, 2000 and December 20, 2001. Secured by the
equipment of the Company......................................... 231,936
Note payable to The Bank of New York, payable in monthly
installments of $4,947, including interest at 9.5%, maturing
December 10, 1999. Secured by equipment of the Company........... 94,382
--------
Total long-term debt.............................................. 949,646
Less installments due within one year............................ 468,467
--------
Long-term debt, excluding current installments.................... $481,179
========

Annual maturities of long-term debt for the next three years are as follows:

February 28:
1999.............................................................. $468,467
2000.............................................................. 329,468
2001.............................................................. 151,711
--------
$949,646
========

(7) LEASES

E&R leases three buildings and one plot of land used for its separate
operations under annual lease agreements. These leases are classified as
operating leases. The agreements provide for monthly rental payments totaling
$13,673, of which $9,100 of these monthly rental payments are to related
parties. E&R is responsible for all operating costs related to the properties.

Total rent expense for the year ended February 28, 1998 was $164,072.

(8) INCOME TAXES

Income tax expense for the year ended February 28, 1998 consists of:

Current:
Federal........................................................... $ 55,569
State............................................................. 16,500
--------
72,069
Deferred............................................................ 115,470
--------
$187,539
========

F-108

E&R TOWING & GARAGE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The differences between the U.S. Federal statutory income tax rate and the
Company's effective rate are:

U.S. Federal statutory income tax rate................................ 35.00%
State income taxes, net of Federal benefit............................ 4.50
Nondeductible expenses................................................ (0.50)
-----
39.00%
=====

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

Deferred tax assets:
Accrued liabilities not yet deductible for tax purposes........ $ 105,023
---------
Total deferred tax assets........................................ 105,023
Deferred tax liabilities:
Property, plant, and equipment, due primarily to accelerated
depreciation.................................................. (205,303)
Notes receivable............................................... (15,190)
---------
Total deferred tax liabilities................................... (220,493)
---------
Net deferred tax liability....................................... $(115,470)
=========

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies, as
well as carryback opportunities, in making this assessment. Based upon the
level of historical taxable income, projections for future taxable income and
carryback opportunities over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not E&R will realize
the benefits of these deductible differences. Therefore, no valuation
allowance has been recorded against the deferred tax assets at February 28,
1998. The amount of the deferred tax asset considered realizable, however,
could be reduced in the near term if estimates of future income are reduced.

(9) CONCENTRATION OF BUSINESS RISKS

Approximately $4.5 million or 53% of the Company's revenues were derived
from a customer in the auto pound management industry who is also an
affiliated company. Transactions with this company are discussed in note 10.
Approximately $1.6 million or 19% of the Company's revenues were derived from
a customer in the salvage industry.

(10) RELATED-PARTY TRANSACTIONS

The Company and Environmental Auto Removal, Inc. (EAR) are related parties
due to the majority shareholder of the Company holding an interest in EAR.
Both Auto and Towing provide towing services for EAR and all revenues for Auto
are derived from services provided to EAR. The cost of these services amounted
to $2,879,475 for the year ended February 28, 1998. Accounts receivable from
EAR totaled $908,300 at February 28, 1998.

The Company also receives management fees from EAR for the performance of
various administrative and managerial services. For the year ended February
28, 1998, the fees received by the Company for these services totaled $646,378
and are included in other income in the statement of operations and retained
earnings.

F-109

E&R TOWING & GARAGE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

During the year ended February 28, 1998, the Company paid approximately
$109,200 in rent expense under a lease agreement for buildings owned by the
majority shareholder of the Company. These agreements extend to October 1998
and are classified as operating leases.

At February 28, 1998, the Company had net accounts receivable from two of
the officers of the Company. These amounts are classified as current assets on
the balance sheet and totaled $112,450 at February 28, 1998. The accounts bear
interest at 10%. Due to the timing of activity in this account, only
immaterial amounts of interest income were generated throughout the year ended
February 28, 1998.

(11) SUBSEQUENT EVENT

During 1998, the stockholders entered into a definitive agreement to sell
E&R to United Road Services, Inc. The anticipated selling price of E&R exceeds
its net assets as of February 28, 1998.

(12) CONTINGENT LIABILITIES

Various legal claims arise against the Company during the normal course of
business. In the opinion of management, liabilities, if any, arising from
legal proceedings would not have a material effect on the financial position
and results of operations of the Company.

F-110

INDEPENDENT AUDITORS' REPORT

The Stockholders
Environmental Auto Removal, Inc.:

We have audited the accompanying balance sheet of Environmental Auto
Removal, Inc. (EAR) as of December 31, 1997, and the related statements of
operations and retained earnings, and cash flows for the year then ended.
These financial statements are the responsibility of EAR's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

As discussed in note 7, the Company is party to an agreement with the City
of Chicago whereby the Company provides auto pound management and towing
services for the City of Chicago. In addition, the Company derives revenue
from the sale of vehicles purchased from the City of Chicago in accordance
with the same agreement. All of the Company's revenues are derived in
accordance with this agreement and 96% of EAR's trade receivable are due from
this one customer at December 31, 1997.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Environmental Auto
Removal, Inc. as of December 31, 1997, and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/ KPMG LLP

Chicago, Illinois
August 7, 1998

F-111

ENVIRONMENTAL AUTO REMOVAL, INC.

BALANCE SHEETS

DECEMBER 31, JUNE 30,
1997 1998
------------ -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents............................ $1,198,311 1,143,020
Accounts receivable.................................. 1,286,916 1,250,329
Inventory............................................ 54,560 78,573
Other receivables.................................... -- 2,253
---------- ---------
Total current assets.................................. 2,539,787 2,474,175
Property and equipment, net (note 3).................. 973,498 921,366
Investment in S.U.P................................... 28,174 --
Due from officers/shareholders (note 6)............... 80,000 805,235
---------- ---------
Total assets.......................................... $3,621,459 4,200,776
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt (note 4)...... $ 278,969 211,452
Accounts payable..................................... 1,711,036 1,765,094
Accounts payable to E&R (note 8)..................... 956,160 460,130
Accrued taxes and other accruals..................... 77,680 48,314
Accrued management fee to affiliate (note 8)......... -- 161,869
---------- ---------
Total current liabilities............................. 3,023,845 2,646,859
Long-term liabilities:
Due to officers/shareholders (note 6)................ -- 207,550
Long-term debt, excluding current installments (note
4).................................................. 110,129 39,328
---------- ---------
Total liabilities..................................... 3,133,974 2,893,737
---------- ---------
Stockholders' equity:
Common stock, no par value, stated value of $1,000.
Authorized, issued, and outstanding 1,000 shares in
1998 and 1997....................................... 1,000 1,000
Retained earnings.................................... 486,485 1,306,039
---------- ---------
Total stockholders' equity............................ 487,485 1,307,039
---------- ---------
Total liabilities and stockholders' equity............ $3,621,459 4,200,776
========== =========

See accompanying notes to financial statements.

F-112

ENVIRONMENTAL AUTO REMOVAL, INC.

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)

YEAR
ENDED SIX-MONTHS
DECEMBER ENDED JUNE 30,
31, --------------------
1997 1997 1998
----------- --------- ---------
(UNAUDITED)

Net revenue................................. $14,104,317 6,147,351 8,539,488
Cost of revenue (note 8).................... 10,889,245 5,793,574 6,022,163
----------- --------- ---------
Gross profit................................ 3,215,072 353,777 2,517,325
Selling, general, and administrative
expenses................................... 1,924,209 704,806 1,382,085
Management fee to affiliate (note 8)........ 747,262 373,630 358,000
----------- --------- ---------
Income (loss) from operations............... 543,601 (724,659) 777,240
----------- --------- ---------
Other income (expense):
Other...................................... (6,231) 1,510 1,557
Interest income............................ 41,415 6,220 51,470
Interest expense........................... (27,344) (11,559) (7,013)
Gain on sale of assets..................... 12,287 -- 13,000
----------- --------- ---------
Income (loss) before income taxes........... 563,728 (728,488) 836,254
Income tax expense.......................... (9,597) -- (16,700)
----------- --------- ---------
Net income (loss)........................... 554,131 (728,488) 819,554
Retained earnings at beginning of period.... 114,944 114,944 486,485
Dividends paid.............................. (182,590) (182,590) --
----------- --------- ---------
Retained earnings (deficit) at end of
period..................................... $ 486,485 (796,134) 1,306,039
=========== ========= =========

See accompanying notes to financial statements.

F-113

ENVIRONMENTAL AUTO REMOVAL, INC.

STATEMENTS OF CASH FLOWS

YEAR ENDED SIX-MONTHS
DECEMBER ENDED JUNE 30
31, -------------------
1997 1997 1998
----------- -------- ---------
(UNAUDITED)

Cash flows from operating activities:
Net income (loss)........................... $ 554,131 (728,488) 819,554
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation............................... 129,210 58,847 91,082
Realized gains from sale of property and
equipment................................. (12,287) -- (13,000)
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable............................... (1,274,141) (45,000) 36,587
(Increase) decrease in inventory.......... (33,842) 7,490 (24,013)
Increase in other receivables............. -- -- (2,253)
Increase (decrease) in accounts payable... 1,237,214 307,871 (441,972)
Increase (decrease) in accrued expenses... 28,794 (16,046) (54,807)
Increase (decrease) in income taxes
payable.................................. 14,023 (2,490) 25,441
Increase in accrued management fee........ -- 227,632 161,869
----------- -------- ---------
Net cash provided by (used in) operating
activities.................................. 643,102 (190,184) 598,488
----------- -------- ---------
Cash flows from investing activities:
Purchases of property and equipment......... (449,284) (46,856) (38,950)
Proceeds from sale of property and
equipment.................................. 80,000 -- 13,000
Cash loaned to affiliate.................... 65,000 (65,000) --
Proceeds from sale of affiliate............. 47,654 -- 28,174
----------- -------- ---------
Net cash (used in) provided by investing
activities.................................. (256,630) (111,856) 2,224
----------- -------- ---------
Cash flows from financing activities:
Principal payments on long-term debt........ (189,319) (95,120) (138,318)
Additional borrowings on long-term debt..... 180,375 -- --
Decrease (increase) in due from
officers/shareholders...................... 120,000 -- (725,235)
Increase in due to officers/shareholders.... -- 450,000 207,550
----------- -------- ---------
Net cash provided by (used in) financing
activities.................................. 111,056 354,880 (656,003)
----------- -------- ---------
Net increase (decrease) in cash and cash
equivalents................................. 497,528 52,840 (55,291)
Cash and cash equivalents at beginning of
period...................................... 700,783 700,780 1,198,311
----------- -------- ---------
Cash and cash equivalents at end of period... $ 1,198,311 753,620 1,143,020
=========== ======== =========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest................................... $ 27,344 11,559 7,013
Income taxes............................... $ 9,597 -- --

See accompanying notes to financial statements.

F-114

ENVIRONMENTAL AUTO REMOVAL, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Environmental Auto Removal, Inc. (the Company or EAR) was founded in 1989.
EAR's primary business is the management of the towing services and auto
pounds for the city of Chicago (City) under a long term contract. In addition,
EAR purchases vehicles from the City for resale at auto auctions or for scrap
value. EAR operates primarily in Chicago.

(b) Revenue Recognition

EAR operates as one segment and revenue is derived from the collection of
towing revenues from the City and the sale of vehicles at auto auctions or for
scrap value. All revenue is recognized upon completion of the towing
engagement or sale of the vehicle at auction or for scrap. Expenses related to
the generation of revenue are recognized as incurred. In the opinion of
management, the financial statements include all costs of doing business.

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases, if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes, EAR
provides for depreciation of property and equipment over the following
estimated useful lives:

Automobiles and equipment.......................................... 5-7 years
Furniture and fixtures............................................. 7 years
Computers and communications equipment............................. 5-7 years

(d) Inventory

Inventory consists of vehicles purchased for resale at auto auctions or for
scrap value. Inventories are stated at the lower of cost or market.

(e) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to EAR on bank loans with
similar terms and maturities, the fair value of EAR's financial instruments
approximates their carrying values.

(f) Income Taxes

The Company is an S Corporation under the provisions of the Internal Revenue
Code and, accordingly, the shareholders of the Company are responsible for
Federal tax liabilities. The Company remains liable for a portion of state
income taxes. Under the provisions of the Illinois replacement tax law, S
Corporations are assessed a 1.5% surtax at the corporate level and earnings or
losses flow through to the shareholder to be taxed at the individual level.
Accordingly, only this Illinois replacement tax liability has been recorded in
the financial statements.

Differences in the tax basis and financial statement carrying amounts result
primarily from accounts receivable; property, plant, and equipment; and
accrued liabilities not yet deductible for tax purposes.

F-115

ENVIRONMENTAL AUTO REMOVAL, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(g) Use of Estimates

Management of EAR has made a number of estimates and assumptions relating to
the reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare these financial statements in conformity
with generally accepted accounting principles. Actual results could differ
from those estimates.

(h) Unaudited Interim Financial Statements

In the opinion of the Company's management the interim financial statements
as of June 30, 1998 and for the six month periods ended June 30, 1997 and 1998
include all adjustments, consisting of normal recurring accruals, that are
necessary for the fair presentation of the Company's financial position at
June 30, 1998 and its results of operations and cash flows for the interim
periods presented. The results for the six months ended June 30, 1998 are not
necessarily indicative of the results expected for the entire year.

(2) CASH AND CASH EQUIVALENTS

Cash and cash equivalents of $1,198,311 at December 31, 1998 consist of bank
accounts and short-term investments with an initial term of less than three
months. For purposes of the statement of cash flows, EAR considers all highly
liquid debt instruments with original maturities of three months or less to be
cash equivalents.

(3) ALLOWANCE FOR DOUBTFUL ACCOUNTS

During the year ended December 31, 1997, EAR had no write-offs of
uncollectible trade accounts receivable. EAR has not recorded a provision for
the allowance of doubtful accounts because management believes all amounts are
fully collectible.

(4) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1997 consist of the following:

Automotive and equipment......................................... $1,093,579
Furniture and fixtures......................................... 43,080
Computer and communications equipment.......................... 238,450
----------
Total.......................................................... 1,375,109
Less accumulated depreciation.................................. 401,611
----------
$ 973,498
==========

Depreciation of property and equipment in 1997 totaled $129,210.

(5) INVESTMENT IN S.U.P.

The Company owns a 27% interest in Summit-U-Pick-A-Part (S.U.P.), a junk
yard. This investment was sold in part during December 1997 with the remainder
being sold in February 1998. The sale resulted in a loss of approximately
$8,800 which was recorded in other expense during the year ended December 31,
1997. At December 31, 1997, the carrying value of this investment was $28,174,
all of which was recovered by the Company through cash proceeds received
during February of 1998.

F-116

ENVIRONMENTAL AUTO REMOVAL, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(6) INDEBTEDNESS

EAR's long-term debt consists of the following at December 31, 1997:

Note payable to Associates Commercial Corporation, payable in monthly
installments of $7,874, including interest at 4.56%, maturing
December 31, 1999. Secured by the equipment of the Company........... $180,375
Note payable to Associates Commercial Corporation, payable in monthly
installments of $4,634, including interest at 4.79%, maturing
December 31, 1998. Secured by the equipment of the Company........... 54,223
Note payable to Associates Commercial Corporation, payable in monthly
installments of $4,530, including interest at 4.73%, maturing
December 31, 1998. Secured by the equipment of the Company........... 53,010
Note payable to Associates Commercial Corporation, payable in monthly
installments of $4,228, including interest at 4.68%, maturing
December 31, 1998. Secured by the equipment of the Company........... 49,470
Note payable to Associates Commercial Corporation, payable in monthly
installments of $2,172, including interest at 8.68%, maturing October
31, 1999. Secured by the equipment of the Company.................... 42,287
Note payable to South Holland Bank, payable in monthly installments of
$782, including interest at 7.9%, maturing January 11, 1999. Secured
by an automobile of the Company...................................... 9,733
--------
Total long-term debt.................................................. 389,098
Less installments due within one year................................. 278,969
--------
Long-term debt, excluding current installments........................ $110,129
========

Notes payable to Associates Commercial Corporation were arranged with the
acquisition of equipment. The impact of adjusting the stated interest rate on
these notes to the Company's incremental borrowing rate is not material to the
results of operations or to the balance sheet.

Annual maturities of long-term debt for the next two years are as follows:

December 31:
1998................................................................. $278,969
1999................................................................. 110,129
--------
$389,098
========

Line of Credit

The Company has available a secured, revolving line of credit totaling
$500,000. Advances are at the discretion of the bank and interest is charged
at the rate of Prime + 1%. The line of credit is secured by collateral which
includes all inventory, equipment, and fixtures of the Company. Any
outstanding principal plus all accrued, unpaid interest will be due on January
11, 1999. No amounts were outstanding at December 31, 1997.

(7) CONCENTRATION OF BUSINESS RISKS

Effective July 31, 1997, the Company entered into an agreement with the City
of Chicago for auto pound management and towing services. This agreement
extends for a period of 36 months. During this period, the agreement specifies
the amount of revenue to be collected by the Company for each vehicle towed as
well as the cost amount for each vehicle purchased by the Company from the
City.

F-117

ENVIRONMENTAL AUTO REMOVAL, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The Company derived 76% of its revenue during 1997 from services performed
under this long-term contract. The remaining 24% of revenue was derived from
the sale of vehicles purchased from the City of Chicago in accordance with the
same agreement. Loss of this contract would have a material negative effect on
the Company.

At December 31, 1997, EAR had accounts receivable from and accounts payable
to the City in the amount of $1,233,996 and $1,340,710, respectively.

(8) RELATED-PARTY TRANSACTIONS

EAR and E&R Towing, Inc. (E&R) are related parties due to the majority
shareholder of E&R holding shares in EAR. E&R provides towing services for
EAR. The cost of these services amounted to $2,821,345 for the year ended
December 31, 1997. Accounts payable to E&R totaled $956,160 at December 31,
1997.

The Company also pays management fees for the performance of various
administrative and managerial services. For the year ended December 31, 1997,
the fees paid by the Company for these services totaled $747,262 and are
included in other income in the statement of operations and retained earnings.

At December 31, 1997, the Company had net accounts receivable from two of
the officers of the Company. These amounts are classified as current assets on
the balance sheet and totaled $80,000 at December 31, 1997. These accounts
bear interest at 12%. Due to the timing of activity in this account, only
immaterial amounts of interest income were generated throughout 1997.

In the opinion of management, the financial statements at December 31, 1997
include all costs of doing business.

(9) SUBSEQUENT EVENT

During August 1998, the stockholders entered into a definitive agreement to
sell EAR to United Road Services, Inc. Consideration for the sale was paid
through a combination of cash and common stock of United Road Services, Inc.
The anticipated selling price of EAR exceeds its net assets as of December 31,
1997.

(10) CONTINGENT LIABILITIES

F-118

INDEPENDENT AUDITORS' REPORT

The Board of Directors:

We have audited the accompanying balance sheet of Neil's Used Truck & Car
Sales, Incorporated, as of December 31, 1997, and the related statements of
operations, stockholders' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Neil's Used Truck & Car
Sales, Incorporated as of December 31, 1997, and the results of its operations
and its cash flows for the year then ended in conformity with generally
accepted accounting principles.

/s/ KPMG LLP

July 2, 1998, except for note 8,
which is as of July 14, 1998

F-119

NEIL'S USED TRUCK & CAR SALES, INCORPORATED

BALANCE SHEET

DECEMBER 31, JUNE 30,
1997 1998
------------ -----------
(UNAUDITED)

Assets
Current assets:
Cash and cash equivalents............................ $ 32,236 $ 356,404
Trade accounts receivable, net of allowance for
doubtful accounts of $13,000........................ 774,618 933,281
Accounts receivable from employees and related party. 13,140 14,899
Drivers advances..................................... 21,420 29,417
Inventory............................................ 175,661 190,954
---------- ----------
Total current assets.............................. 1,017,075 1,524,955
---------- ----------
Property and equipment, net (note 2).................. 1,521,305 1,654,310
---------- ----------
$2,538,380 $3,179,265
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Note payable to stockholder.......................... $ 20,417 $ --
Current installments of long-term debt (note 4)...... 152,826 133,482
Current installments of obligations under capital
leases (note 5)..................................... 163,684 163,684
Accounts payable..................................... 126,753 85,381
Accrued payroll and related costs.................... 293,386 419,456
Other current liabilities (note 3)................... 62,665 60,394
---------- ----------
Total current liabilities......................... 819,731 862,397
Long-term debt, excluding current installments (note
4)................................................... 578,461 660,824
Obligations under capital leases, excluding current
installments (note 5)................................ 256,482 176,341
---------- ----------
Total liabilities................................. 1,654,674 1,699,562
---------- ----------
Stockholders' equity:
Common stock, no par value. Authorized 50,000 shares;
issued and outstanding 10,000 shares in 1997........ 1,000 1,000
Retained earnings.................................... 882,706 1,478,703
---------- ----------
Total stockholders' equity........................ 883,706 1,479,703
---------- ----------
Commitments and contingencies (notes 5, 7 and 8)
$2,538,380 $3,179,265
========== ==========

See accompanying notes to financial statements.

F-120

NEIL'S USED TRUCK & CAR SALES, INCORPORATED

STATEMENT OF OPERATIONS

SIX-MONTHS
YEAR ENDED ENDED JUNE 30 ,
DECEMBER 31, ---------------------
1997 1997 1998
------------ ---------- ----------
(UNAUDITED)

Net revenue................................. $9,552,971 $4,631,559 $5,891,071
Cost of revenue............................. 8,246,207 3,931,638 4,813,249
---------- ---------- ----------
Gross profit.............................. 1,306,764 699,921 1,077,822
Selling, general, and administrative
expenses................................... 789,663 387,372 375,249
---------- ---------- ----------
Income from operations...................... 517,101 312,549 702,573
Interest expense............................ 70,590 41,449 46,576
---------- ---------- ----------
Net income................................ $ 446,511 $ 271,100 $ 655,997
========== ========== ==========

See accompanying notes to financial statements.

F-121

NEIL'S USED TRUCK & CAR SALES, INCORPORATED

STATEMENT OF STOCKHOLDERS' EQUITY

TOTAL
STOCK-
COMMON RETAINED HOLDER'S
STOCK EARNINGS EQUITY
------ ---------- ----------

Balances at December 31, 1996................... $1,000 $ 531,475 $ 532,475
Net income...................................... -- 446,511 446,511
Owners' distributions........................... -- (95,280) (95,280)
------ ---------- ----------
Balances at December 31, 1997................... 1,000 882,706 883,706
Net income--six-months ended June 30, 1998
(unaudited).................................... -- 655,997 655,997
Distribution to stockholders--six-months ended
June 30, 1998 (unaudited)...................... -- (60,000) (60,000)
------ ---------- ----------
Balance at June 30, 1998 (unaudited)............ $1,000 $1,478,703 $1,479,703
====== ========== ==========

See accompanying notes to financial statements.

F-122

NEIL'S USED TRUCK & CAR SALES, INCORPORATED

STATEMENT OF CASH FLOWS

YEAR ENDED SIX-MONTHS ENDED
DECEMBER 31, JUNE 30,
------------ --------------------
1997 1997 1998
------------ --------- ---------
(UNAUDITED)

Cash flows from operating activities:
Net income................................. $ 446,511 $ 271,100 $ 655,997
Adjustments to reconcile net income to net
cash provided by
operating activities:
Depreciation.............................. 126,639 59,024 99,470
Change in operating assets and
liabilities:
Trade accounts receivable................ (197,304) (100,904) (158,663)
Accounts receivable from employees....... (150) (200) 1,287
Accounts receivable from related parties. 9,155 19,078 (3,046)
Drivers advances......................... 3,304 (5,150) (7,997)
Inventory................................ (7,320) (19,286) (15,292)
Accounts payable......................... 55,237 24,483 (41,372)
Accrued payroll and related costs........ 94,938 31,387 126,070
Other current liabilities................ (6,488) (11,999) (2,272)
--------- --------- ---------
Net cash provided by operating
activities............................. 524,522 267,533 654,182
--------- --------- ---------
Cash flows used in investing activity--
purchases of property and equipment........ (761,445) (157,794) (232,475)
Cash flows from financing activities:
Proceeds from issuance of long-term debt... 702,999 150,000 135,552
Owners' distributions...................... (95,280) (43,280) (60,000)
Principal payments on long-term debt....... (188,443) (152,381) (92,950)
Principal payments on obligations under
capital leases............................ (150,618) (64,079) (80,141)
--------- --------- ---------
Net cash provided by (used in) financing
activities............................. 268,658 (109,740) (97,539)
--------- --------- ---------
Net increase (decrease) in cash......... 31,735 (1) 324,168
Cash and cash equivalents at beginning of
period..................................... 501 $ 501 32,236
--------- --------- ---------
Cash and cash equivalents at end of period.. $ 32,236 $ 500 $ 356,404
========= ========= =========
Supplemental Disclosure of Cash Flow
Information
Cash paid during the period for interest.... $ 75,051 $ 38,424 $48,621
========= ========= =========

See accompanying notes to financial statements.

F-123

NEIL'S USED TRUCK & CAR SALES, INCORPORATED

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Neil's Used Truck & Car Sales, Incorporated, dba Neil's Auto Transport, (the
Company) was founded in 1993. The Company's primary business is transporting
vehicles for auto auctions and auto dealers, throughout the continental United
States. The Company has one facility located in Utah. It owns a fleet of
approximately 24 trucks and trailers, and contracts with various third party
owner/operators.

(b) Income Taxes

Income taxes are not reflected in the financial statements since the Company
has elected to be treated as a small business corporation under Subchapter S
of the Internal Revenue Code. Accordingly, the tax effects of the Company's
operations accrue directly to the shareholders.

Cash and cash equivalents of $32,236 at December 31, 1997, consist of cash
on deposit in bank accounts. For purposes of the statement of cash flows, the
Company considers all highly liquid investment instruments with original
maturities of three months or less to be cash equivalents.

(d) Property and Equipment

Property and equipment are stated at cost. Plant and equipment under capital
leases are stated at the present value of minimum lease payments. Depreciation
is determined for financial statement purposes using the straight-line method
over the estimated useful lives of the individual assets. For financial
statement purposes, the Company provides for depreciation of property and
equipment over the following estimated useful lives.

Transportation equipment......................................... 5--10 years
Furniture and fixtures........................................... 5--7 years
Equipment........................................................ 7 years

(e) Inventories

Inventories are stated at lower of cost or market. Cost is determined using
the first-in, first-out method for all inventories.

(f) Income Taxes

The Company has elected to be taxed under the Subchapter S provisions of the
Internal Revenue Code. Accordingly, tax liabilities of the Company are the
direct responsibility of the stockholders, and no provision for income taxes
is reflected in the accompanying statement of operations. Due to differences,
primarily in the timing of the recognition of depreciation expense for book
purposes versus tax purposes, the book bases in the reported net assets in the
accompanying balance sheet exceeds the tax bases by approximately $538,000.

(g) Use of Estimates

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally a ccepted accounting principles. Actual results
could differ from those estimates.

(h) Interim Financial Statements

F-124

NEIL'S USED TRUCK & CAR SALES, INCORPORATED

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1997 consists of the following:

Transportation equipment......................................... $1,520,955
Furniture and fixtures........................................... 47,847
Equipment........................................................ 86,609
Land............................................................. 140,000
----------
Total........................................................ 1,795,411
Less accumulated depreciation and amortization................... 274,106
----------
$1,521,305
==========

(3) OTHER CURRENT LIABILITIES

Other current liabilities at December 31, 1997 consist of:

Deposit liability................................................ $ 35,440
Accrued sales tax................................................ 12,725
Other............................................................ 14,500
----------
$ 62,665
==========

(4) LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1997:

Note payable to a bank, payable in monthly installments of $3,758,
including interest at 8.27%; maturing June 2001; secured by
transport equipment.............................................. $ 137,221
Note payable to a bank, payable in monthly installments of $7,420,
including interest at 8.60%; maturing March 2002; secured by
transport equipment.............................................. 292,000
Note payable to a bank, payable in monthly principal installments
of $6,630, plus interest at 8.58%; maturing March 2002; secured
by transport equipment........................................... 260,999
Note payable to a bank, payable in monthly installments of $4,292,
including interest at 8.75%; maturing October 1998; secured by
transport equipment.............................................. 41,067
---------
Total long-term debt.......................................... 731,287
Less installments due within one year............................. 152,826
---------
Long-term debt, excluding current installments................ $ 578,461
=========

Aggregate maturities of long-term debt for the next five years are as
follows:

1998............................................................... $ 173,243
1999............................................................... 171,111
2000............................................................... 186,169
2001............................................................... 179,627
2002............................................................... 41,554
---------
$ 751,704
=========

F-125

NEIL'S USED TRUCK & CAR SALES, INCORPORATED

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

As of December 31, 1997, the Company had a line-of-credit with a bank
totaling $100,000. There were no borrowings outstanding at December 31, 1997,
and the agreement expired April 30, 1998.

(5) LEASES

The Company leases equipment under a capital lease which expires in May
2000. The following is a summary of transportation equipment held under
capital leases at December 31, 1997:

Transportation equipment........................................... $639,587
Less accumulated amortization...................................... 67,981
--------
$571,606
========

The Company leases its operating facility from a related stockholder under a
month to month lease. Rent expense was $207,158 in 1997.

Future minimum lease payment under noncancelable operating leases and future
minimum capital lease payments as of December 31, 1997 are as follows:

CAPITAL OPERATING
LEASES LEASES
-------- ---------

Year ending December 31:
1998....................................................... $192,591 28,234
1999....................................................... 192,591 5,160
2000....................................................... 80,246 5,160
2001....................................................... -- 5,160
2002....................................................... -- 1,290
-------- ------
Total.................................................... 465,428 45,004
======
Less amount representing interest............................ 45,262
--------
Present value of net minimum capital lease payments...... 420,166
Less current installments.................................... 163,684
--------
$256,482
========

(6) EMPLOYEE BENEFITS

The Company has a retirement savings plan pursuant to section 401(k) of the
Internal Revenue Code that is available to all employees with at least one
year of service to the Company. Eligible participants may contribute up to
four percent of their compensation. The Company provides non-discretionary
matching contributions to the Plan which amounted to $7,800 in 1997.

(7) CONTINGENCIES

Various legal claims arise against the Company during the normal course of
business. In the opinion of management, liabilities, if any, arising from
proceedings would not have a material effect on the Company's financial
position, results of operations, or cash flows.

(8) SUBSEQUENT EVENT

On July 14, 1998, the stockholders consummated a transaction whereby all of
the net assets of the Company were sold to United Road Services, Inc.

F-126

INDEPENDENT AUDITORS' REPORT

The Stockholders
5-L Corporation and ADP Transport, Inc.:

We have audited the accompanying combined balance sheet of 5-L Corporation
and ADP Transport, Inc. as of December 31, 1997, and the related combined
statements of operations, stockholders' equity and cash flows for the year
then ended. These combined financial statements are the responsibility of the
management of 5-L Corporation and ADP Transport, Inc. Our responsibility is to
express an opinion on these combined financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the combined financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the combined
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall combined financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of 5-L
Corporation and ADP Transport, Inc. as of December 31, 1997, and the results
of their operations and their cash flows for the year then ended in conformity
with generally accepted accounting principles.

/s/ KPMG LLP

Denver, Colorado
June 12, 1998

F-127

5-L CORPORATION AND ADP TRANSPORT, INC.

COMBINED BALANCE SHEET

DECEMBER 31, JUNE 30,
1997 1998
------------ -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents............................ $ 47,083 $ 31,614
Trade accounts receivable............................ 806,009 982,508
Accounts receivable from employees................... 5,000 --
Prepaid expenses..................................... 23,040 53,940
Other current assets................................. 4,074 1,350
Current portion of rights to equipment under
financing contracts................................. 382,246 290,638
---------- ----------
Total current assets.............................. 1,267,452 1,360,050
Rights to equipment under financing contracts,
excluding current portion............................ 1,780,129 2,714,344
Goodwill, net of accumulated amortization of $7,224
and $7,974, respectively............................. 17,776 17,026
Other assets.......................................... 7,700 7,700
---------- ----------
Total assets...................................... $3,073,057 $4,099,120
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of obligations for equipment un-
der financing contracts............................. $ 382,246 $ 290,638
Contractor payments payable.......................... 198,182 289,441
Accounts payable..................................... 89,849 140,474
Accrued payroll and related costs.................... 99,721 20,662
Notes payable to stockholders........................ -- 257,140
---------- ----------
Total current liabilities......................... 769,998 998,355
Obligations for equipment under financing contracts,
excluding current
installments......................................... 1,780,129 2,714,344
---------- ----------
Total liabilities................................. 2,550,127 3,712,699
---------- ----------
Stockholders' equity:
Common stock, $1 par value. Authorized, issued and
outstanding
2,000 shares........................................ 2,000 2,000
Retained earnings.................................... 520,930 384,421
---------- ----------
Total stockholders' equity........................ 522,930 386,421
---------- ----------
Total liabilities and stockholders' equity........ $3,073,057 $4,099,120
========== ==========

See accompanying notes to combined financial statements.

F-128

5-L CORPORATION AND ADP TRANSPORT, INC.

COMBINED STATEMENT OF OPERATIONS

SIX-MONTHS
YEAR ENDED ENDED JUNE 30,
DECEMBER 31, ----------------------
1997 1997 1998
------------ ---------- ----------
(UNAUDITED)

Net revenue............................... $9,852,142 $4,918,861 $5,069,454
Cost of revenue........................... 8,389,700 4,180,156 4,288,975
---------- ---------- ----------
Gross profit.......................... 1,462,442 738,705 780,479
Selling, general and administrative
expenses................................. 927,560 377,110 335,113
---------- ---------- ----------
Income from operations................ 534,882 361,595 445,366
Other income (expense):
Interest expense......................... (10,057) (1,374) (189)
Other.................................... 11,105 5,497 22,594
---------- ---------- ----------
Net income............................ $ 535,930 $ 365,718 $ 467,771
========== ========== ==========

See accompanying notes to combined financial statements.

F-129

5-L CORPORATION AND ADP TRANSPORT, INC.

COMBINED STATEMENT OF STOCKHOLDERS' EQUITY

TOTAL
COMMON RETAINED STOCKHOLDERS'
STOCK EARNINGS EQUITY
------- --------- --------------

BALANCES AT JANUARY 1, 1997.................. $1,000 $ 555,585 $ 556,585
Net income -- 1997........................... -- 535,930 535,930
Distribution to stockholders................. -- (570,585) (570,585)
Stock issued ADP............................. 1,000 -- 1,000
------ --------- ---------
BALANCES AT DECEMBER 31, 1997................ 2,000 520,930 522,930
Net income--six-months ended June 30, 1998
(unaudited)................................. -- 467,771 467,771
Distribution to stockholders--cash paid--six-
months ended June 30, 1998 (unaudited)...... -- (347,140) (347,140)
Distribution to stockholders--notes payable--
six-months ended June 30, 1998 (unaudited).. -- (257,140) (257,140)
------ --------- ---------
BALANCE AT JUNE 30, 1998 (UNAUDITED)......... $2,000 $ 384,421 $ 386,421
====== ========= =========

See accompanying notes to combined financial statements.

F-130

5-L CORPORATION AND ADP TRANSPORT, INC.

COMBINED STATEMENT OF CASH FLOWS

SIX-MONTHS
YEAR ENDED ENDED JUNE 30,
DECEMBER 31, --------------------
1997 1997 1998
------------ --------- ---------
(UNAUDITED)

Cash flows from operating activities:
Net income................................. $ 535,930 $ 365,718 $ 467,771
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization............................. 1,667 765 750
Decrease (increase) in trade accounts
receivable.............................. (36,133) 114,873 (176,499)
Decrease in accounts receivable from
employees............................... 22,500 27,500 5,000
Decrease (increase) in prepaid expenses
and other current assets................ 32,516 (12,307) (28,175)
(Decrease) increase in accounts payable.. (2,372) (11,669) 50,625
Decrease in accrued payroll and related
costs................................... (169) (89,947) (78,059)
Increase in contractor payments payable.. 39,419 51,678 91,258
--------- --------- ---------
Net cash provided by operating
activities............................. 593,358 446,611 331,671
--------- --------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock..... 1,000 -- --
Distributions to stockholders.............. (570,585) (281,398) (347,140)
--------- --------- ---------
Net cash used in financing activities... (569,585) (281,398) (347,140)
--------- --------- ---------
Net increase (decrease) in cash......... 23,773 165,213 (15,469)
Cash and cash equivalents at beginning of
period..................................... 23,310 23,310 47,083
--------- --------- ---------
Cash and cash equivalents at end of period.. $ 47,083 $ 188,523 $ 31,614
========= ========= =========
Supplemental disclosure of cash flow
information:
Cash paid during the period for interest.... $ 10,057 $ 1,374 $ 198
========= ========= =========
Reduction for the period in rights to and
obligations for equipment under financing
contracts, net............................ $ 59,892 $ -- $ 842,607
========= ========= =========

See accompanying notes to combined financial statements.

F-131

5-L CORPORATION AND ADP TRANSPORT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

5-L Corporation (5-L) was founded in 1993 and its primary business is
coordinating the transport of vehicles for auto auctions, leasing companies,
auto dealers, manufacturers and individuals. It operates throughout the
continental United States via a network of independently contracted carriers.
ADP Transport, Inc. (ADP) was founded in 1997 and acts as an agent for
independent carriers by securing and servicing transport equipment lease
agreements. Both companies" operations are headquartered in Westminster,
Colorado.

(b) Principles of Combination

The combined financial statements include the financial statements of 5-L
and ADP, the "Company" when referred to collectively. The accompanying
financial statements are presented on a combined basis because 5-L and ADP are
under common management. All significant intercompany balances and
transactions have been eliminated.

5-L operates as one segment related to the transportation of vehicles for
customers such as auto auctions, leasing companies, auto dealers,
manufacturers and individuals. Transport revenue and related direct expenses
are recognized when the service originates, which does not differ
significantly from the amounts that would be recognized as the service is
performed.

ADP's revenue is derived from service fees associated with the
administration of equipment lease agreements for certain independent carriers
of 5-L. For a monthly fee, ADP performs administrative functions relating to
the leased equipment, such as monthly payment processing and procurement of
insurance coverage on behalf of the carrier/lessee. Service revenues are
recognized when services are performed. Cost of sales and operating expenses
associated with the service revenues are nominal.

(d) Cash and Cash Equivalents

Cash and cash equivalents consist of bank accounts and certificates of
deposit with an initial term of less than three months. For purposes of the
statement of cash flows, the Company considers all highly liquid debt
instruments with original maturities of three months or less to be cash
equivalents.

(e) Goodwill

Goodwill represents the excess of purchase price over fair value of net
assets acquired and is amortized on a straight-line basis over 15 years, which
is the Company"s estimate of the expected periods to be benefited.

(f) Accounting for Long-Lived Assets

The Company reviews long-lived tangible and intangible assets including
rights to equipment under financing contracts for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets is measured by a comparison of
the carrying amount of an asset to the future net cash flows expected to be
generated by the asset. The impairment, if any, is measured by the amount by
which the carrying amount of the assets exceed the fair value of the assets.

F-132

5-L CORPORATION AND ADP TRANSPORT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(g) Other Assets

Other assets consist principally of deposits made by the Company to secure
office facilities and surety bonding.

(h) Income Taxes

Both 5-L and ADP are operated as S-corporations for federal and state income
tax purposes and all corporate earnings flow through and are taxed solely at
the stockholder level. Accordingly, no income tax expense has been recorded
for the year ended December 31, 1997. The tax basis of the Company's assets
and liabilities does not differ materially from their recorded values at
December 31, 1997.

(i) Fair Value of Financial Instruments

The carrying values of the Company's financial instruments, which are
comprised mainly of receivables and payables, approximate their fair values.

(j) 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 assets and liabilities at the date of the financial
statements and the reported amounts of sales and expenses during the reporting
period. Actual results could differ significantly from those estimates.

(k) Interim Combined Financial Statements

The interim financial information included in these combined financial
statements is unaudited but reflects all adjustments (consisting of only
normal recurring accruals) which are, in the opinion of management, necessary
for a fair presentation of the results for the interim periods presented.

(2) EQUIPMENT UNDER FINANCING CONTRACTS

ADP has guaranteed lease obligations for certain independent carriers who
lease the equipment from financing companies. The guarantee includes payment
of the monthly installments should the primary lessee default, as well as a
specified minimum residual value at the end of the lease term. In return for
the lease guarantee, the independent carrier agrees to subcontract the
equipment to 5-L for the duration of the lease term. For accounting purposes,
the Company has recorded the rights to the equipment and the corresponding
obligation under the equipment financing contracts. The recorded value of both
the asset and liability related to the financing contracts is determined based
on the present value of the future minimum installment payments and the
guaranteed residual value using the rate implicit in the lease agreements.

The following is a summary of obligations under equipment financing
contracts at December 31, 1997:

Year ending December 31:
1998.......................................................... $ 539,602
1999.......................................................... 539,602
2000.......................................................... 539,602
2001.......................................................... 965,760
2002.......................................................... --
----------
Total minimum obligations (includes residual guarantees of
$519,989)...................................................... 2,584,566
Less: imputed interest (at rates from 7.25% to 10.50%).......... (422,191)
----------
Present value of future minimum obligations, $382,246 of which
is included in current assets and liabilities at December 31,
1997........................................................... $2,162,375
==========

During 1997, installment payments of $93,626 related to the obligations for
equipment under financing contracts are included in cost of revenue. Of this
amount, $33,734 represents interest charges. These amounts

F-133

5-L CORPORATION AND ADP TRANSPORT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

were withheld from the amounts paid to the respective independent contractors
and remitted directly to the financing companies.

Subsequent to December 31, 1997, the Company entered into agreements whereby
they guaranteed monthly payments and minimum residual values on seven
additional leases, the terms of which are consistent with those described
above. The value of the assets and corresponding liabilities recorded in
connection with these additional agreements is approximately $1,094,000.

(3) LEASES

5-L is committed under a non-cancellable operating lease for office space.
The future minimum lease payments at December 31, 1997 are as follows:

Year ending December 31:
1998................................................................. $31,808
1999................................................................. 21,623
2000................................................................. --
2001................................................................. --
2002................................................................. --
-------
Total minimum lease payments........................................... $53,431
=======

(4) EMPLOYEE BENEFITS

5-L has a simplified employee pension plan (Plan) pursuant to Section 408(k)
of the Internal Revenue Code. The Plan provides for discretionary employer
contributions for employees who have completed two years of service with 5-L.
Employees are immediately vested in all balances. For 1997, 5-L made
contributions of $52,695 to the Plan.

(5) RELATED PARTY TRANSACTIONS

During 1997, 5-L paid $9,995 in interest related to notes payable to
stockholders. The notes were repaid in 1997.

(6) CONTINGENT LIABILITIES

Various claims arise against the Company during the normal course of
business. In the opinion of management, liabilities, if any, arising from
proceedings would not have a material effect on the financial statements.

(7) SUBSEQUENT EVENT

On June 12, 1998 all of the outstanding stock of 5-L and ADP was sold to
United Road Services, Inc. The sales transaction, affected through a
combination of cash and common stock of United Road Services, Inc., will be
accounted for as a purchase. The selling price of 5-L and ADP exceeds their
combined net assets as of December 31, 1997.

F-134

INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
Car Transporters Corporation:

We have audited the accompanying balance sheet of Car Transporters
Corporation (a wholly-owned subsidiary of Automotive Services, Inc.) as of
December 31, 1997, and the related statements of operations, stockholder's
deficit, and cash flows for the year then ended. These financial statements
are the responsibility of Car Transporters Corporation's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Car Transporters
Corporation (a wholly-owned subsidiary of Automotive Services, Inc.) as of
December 31, 1997, and the results of its operations, and its cash flows for
the year then ended in conformity with generally accepted accounting
principles.

/s/ KPMG LLP

Portland, Oregon
August 19, 1998

F-135

CAR TRANSPORTERS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF AUTOMOTIVE SERVICES, INC.)

BALANCE SHEETS

DECEMBER 31, JUNE 30,
1997 1998
------------ -----------
(UNAUDITED)

ASSETS
Current assets:
Cash................................................. $ 73,964 $ --
Trade accounts receivable, net of allowance for
doubtful accounts of $5,893 for December 31, 1997
and June 30, 1998................................... 683,474 892,437
Prepaid insuance...................................... 44,189 --
Other prepaid expenses................................ 82,169 66,224
---------- ----------
Total current assets.............................. 883,796 958,661
Property and equipment, net........................... 1,805,508 2,492,549
Other assets, net..................................... 10,707 525,207
---------- ----------
Total assets...................................... $2,700,011 $3,976,417
========== ==========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Bank overdraft....................................... $ -- $ 195,992
Current installments of long-term debt............... 411,300 4,917,491
Current installments of obligations under capital
leases.............................................. 152,136 321,991
Borrowings under lines of credit..................... 753,743 594,286
Accounts payable..................................... 1,416,318 1,776,398
Accrued liabilities.................................. 316,567 370,278
Accrued claims....................................... 169,301 107,890
---------- ----------
Total current liabilities......................... 3,219,365 8,284,326
Long-term liabilities:
Long-term debt, excluding current installments....... 3,275,118 --
Obligations under capital leases, excluding current
installments........................................ 175,267 --
---------- ----------
Total liabilities................................. 6,669,750 8,284,326
---------- ----------
Stockholder's deficit:
Common stock, $10 par value. Authorized 1,000 shares;
issued and outstanding 1,000 shares................. 10,000 10,000
Retained deficit..................................... (3,979,739) (4,317,909)
---------- ----------
Total stockholder's deficit....................... (3,969,739) (4,307,909)
---------- ----------
Total liabilities and stockholder's deficit....... $2,700,011 $3,976,417
========== ==========

See accompanying notes to financial statements.

F-136

CAR TRANSPORTERS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF AUTOMOTIVE SERVICES, INC.)

STATEMENTS OF OPERATIONS

SIX-MONTHS
YEAR ENDED ENDED JUNE 30
DECEMBER 31, ----------------------
1997 1997 1998
------------ ---------- ----------
(UNAUDITED)

Net revenue............................... $6,676,340 $3,436,357 $4,499,480
Cost of revenue........................... 5,708,638 3,018,772 3,861,840
---------- ---------- ----------
Gross profit.......................... 967,702 417,585 637,640
Selling, general and administrative
expenses................................. 829,859 272,833 623,053
---------- ---------- ----------
Income from operations................ 137,843 144,752 14,587
Other income (expense):
Interest expense, net.................... (737,894) (425,884) (299,331)
Gain on sale of equipment................ 21,571 -- --
Penalty and late charges on debt, net.... (199,510) -- (53,426)
---------- ---------- ----------
Loss before provision for income
taxes................................ (777,990) (281,132) (338,170)
Provision for income taxes................ -- -- --
---------- ---------- ----------
Net loss.............................. $ (777,990) $ (281,132) $ (338,170)
========== ========== ==========

See accompanying notes to financial statements.

F-137

CAR TRANSPORTERS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF AUTOMOTIVE SERVICES, INC.)

STATEMENTS OF STOCKHOLDER'S DEFICIT

TOTAL
COMMON RETAINED STOCKHOLDER'S
STOCK DEIFICT DEFICIT
------- ----------- -------------

Balance at December 31, 1996................ $10,000 $(3,201,749) $(3,191,749)
Net loss.................................... -- (777,990) (777,990)
------- ----------- -----------
Balance at December 31, 1997................ 10,000 (3,979,739) (3,969,739)
Net loss--six-months ended June 30, 1998
(unaudited)................................ -- (338,170) (338,170)
------- ----------- -----------
Balance at June 30, 1998 (unaudited)........ $10,000 $(4,317,909) $(4,307,909)
======= =========== ===========

See accompanying notes to financial statements.

F-138

CAR TRANSPORTERS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF AUTOMOTIVE SERVICES, INC.)

STATEMENTS OF CASH FLOWS

SIX-MONTHS
YEAR ENDED ENDED JUNE 30
DECEMBER 31, ----------------------
1997 1997 1998
------------ --------- -----------
(UNAUDITED)

Cash flows from operating activities:
Net loss................................. $ (777,990) $(281,132) $ (338,170)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization........... 355,246 160,579 215,273
Amortization of non-compete............. 13,200 1,320 --
Gain on sale of equipment............... (21,571) -- --
Changes in current assets and
liabilities:
Increase in accounts receivable, net... (649,969) (695,354) (208,963)
Decrease (increase) in prepaid
insurance and other prepaid expenses.. (12,631) (150,484) 60,134
Increase (decrease) in accounts
payable............................... (150,946) 247,789 360,080
Increase (decrease) in accrued
liabilities........................... (75,100) (270,260) 53,711
Decrease in accrued claims............. (27,951) (8,146) (61,411)
----------- --------- -----------
Net cash (used in) provided by
operating activities................. (1,347,712) (995,688) 80,654
----------- --------- -----------
Cash flows from investing activities:
Purchase of property and equipment....... (7,733) -- --
Proceeds from sale of equipment.......... 39,634 -- --
Decrease in other assets................. (1,107) -- (3,500)
Cash paid for acquisitions............... -- -- (1,413,314)
----------- --------- -----------
Net cash provided by (used in)
investing activities................. 30,794 -- (1,416,814)
----------- --------- -----------
Cash flows from financing activities:
Proceeds from long-term debt............. 1,460,293 742,105 1,650,000
Payments on long-term debt, notes payable
and capital lease obligations........... (662,462) (276,026) (424,339)
Net borrowings under lines of credit..... 753,743 644,662 (159,457)
Decrease in bank overdrafts.............. (199,521) (153,882) 195,992
Decrease in notes receivable............. 37,836 37,836 --
----------- --------- -----------
Net cash provided by financing
activities........................... 1,389,889 994,695 1,262,196
----------- --------- -----------
Net increase (decrease) in cash....... 72,971 (993) (73,964)
Cash at beginning of period............... 993 993 73,964
----------- --------- -----------
Cash at end of period..................... $ 73,964 $ -- $ --
=========== ========= ===========
Supplemental disclosure of cash flow
information:
Cash paid for interest................... $ 741,058 $ 431,402 $ 299,331
=========== ========= ===========

See accompanying notes to financial statements.

F-139

CAR TRANSPORTERS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF AUTOMOTIVE SERVICES, INC.)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Car Transporters Corporation (CTC) is a Washington Corporation founded in
1980 and is a wholly-owned subsidiary of Automotive Services, Inc. a
Washington Corporation. CTC's primary business is transporting vehicles for
dealers, leasing companies, auction companies and long-haul transporters in
the Western United States. CTC operates approximately 60 vehicles. These
financial statements include all costs of doing business of CTC.

Unaudited Information

The financial information included herein for the six-month periods ended
June 30, 1997 and 1998 is unaudited; however, such information reflects all
adjustments consisting only of normal recurring adjustments which are, in the
opinion of management, necessary for a fair presentation of the financial
position, results of operations and cash flows for the interim periods. The
results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the full year.

Revenue Recognition

CTC operates as one segment related to the transportation of vehicles and
equipment for customers.

CTC's revenue is derived from customers who require transport of vehicles
and equipment. Transport revenue is recognized upon the delivery of the
vehicles and equipment to their final destination. Expenses related to the
generation of revenue are recognized as incurred.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization is
determined for financial statement purposes using the straight-line method
over the estimated useful lives of the individual assets or, for leasehold
improvements, over the terms of the related leases if shorter. For financial
statement purposes, CTC provides for depreciation of property and equipment
over the following estimated useful lives:

Machinery and equipment....................................... 10-20 years
Leasehold improvements........................................ 10 years
Furniture and fixtures........................................ 10-20 years

Fair Value of Financial Instruments

The Company's financial instruments consist of cash, accounts receivable,
accounts payable and debt instruments. At December 31, 1997, the fair value of
the Company's receivables approximated carrying value. At December 31, 1997,
the fair value of the Company's debt instruments was approximately $3,000,000.

Income Taxes

F-140

CAR TRANSPORTERS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF AUTOMOTIVE SERVICES, INC.)

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Accrued Claims

CTC is responsible for damage incurred while transporting vehicles to their
final destination. Damage incurred is identified upon delivery at final
destination and CTC reimburses for the cost of repairs.

Use of Estimates

Management of CTC has made a number of estimates and assumptions relating to
the reporting of assets and liabilities and the disclosure of contingent assets
and liabilities to prepare these financial statements in conformity with
generally accepted accounting principles. Actual results could differ from
those estimates.

(2) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1997 consist of the following:

Machinery and equipment......................................... $ 3,251,888
Leasehold improvements.......................................... 12,568
Furniture and fixtures.......................................... 26,498
-----------
3,290,954
Less accumulated depreciation and amortization.................. (1,485,446)
-----------
$ 1,805,508
===========

Depreciation and amortization of property and equipment in 1997 totaled
$355,246. CTC held equipment under capital leases of $728,571 at December 31,
1997.

(3) LINE OF CREDIT

CTC has a line of credit to borrow up to $1,000,000 which is secured by
eligible accounts receivable. Interest is charged at prime plus 6% (14.5% at
December 31, 1997).

(4) DEBT

Long-term debt consists of the following at December 31, 1997:
Note payable to lending institution, payable in monthly
installments plus interest of 16% through 2001. This note is
secured by various equipment.................................. $ 330,000
Various notes payable due in varying amounts with maturities
ranging from December of 2000 to December of 2005 with
interest ranging from 8% to 16%. These notes are secured by
various equipment............................................. 1,171,146
Note payable to lending institution, payable in monthly
installments plus interest of 18% through 2002................ 600,000
Various unsecured notes payable, due in varying amounts with
maturities ranging from December of 1998 to December of 2002
with interest ranging from 9.25% to 36%....................... 1,585,272
----------
Total long-term debt........................................ 3,686,418
Less current portion............................................ (411,300)
----------
$3,275,118
==========

(See Footnote 9 for subsequent event)

F-141

CAR TRANSPORTERS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF AUTOMOTIVE SERVICES, INC.)

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(5) CAPITAL LEASE OBLIGATIONS

CTC leases certain vehicles under capital leases.

At December 31, 1997 obligations under capital leases consist of the
following:

Three capital leases net of interest, payable in monthly
installments bearing interest at 11.5% through 2001. These leases
are secured by the respective trucks and trailers acquired under
the capital lease. ............................................... $ 353,544
Capital lease net of interest, payable in monthly installments
bearing interest at 18% through 2001. This lease is secured by the
truck and trailer acquired under the capital lease. .............. 82,070
---------
435,614
Less amount that represents imputed interest....................... (108,211)
---------
327,403
---------
Less current portion............................................... (152,136)
---------
$ 175,267
=========

(See Footnote 9 for subsequent event)

(6) OPERATING LEASES

CTC leases certain land and buildings used for its operations under
operating lease agreements expiring in 2006. Total rent expense for 1997 was
$60,989.

Future annual minimum operating lease payments at December 31, 1997 are:

1998................................................................ $ 61,506
1999................................................................ 63,350
2000................................................................ 65,244
2001................................................................ 67,198
2002................................................................ 69,212
Thereafter.......................................................... 281,931
--------
$608,441
========

(7) INCOME TAXES

The Company incurred a loss for both financial reporting and tax return
purposes and as such, there was no current or deferred tax provision for the
year ended December 31, 1997.

At December 31, 1997, CTC's long-term deferred tax asset/liability consists
of:

Deferred tax asset:
Net operating loss carryforward................................ $1,614,089
Deferred tax liability:
Fixed assets, due to depreciation.............................. 259,360
----------
Net.......................................................... 1,354,729
Valuation allowance.............................................. (1,354,729)
----------
Total........................................................ $ --
==========

F-142

CAR TRANSPORTERS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF AUTOMOTIVE SERVICES, INC.)

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

CTC's net operating loss carryforwards (NOL's) of approximately $4,747,000
expire at various times in the future. At December 31, 1997, a valuation
allowance has been provided against the deferred tax assets, as it is
uncertain that the deferred tax assets will be realized since the Company has
incurred substantial operating losses.

The following table reconciles the expected tax benefit (expense) at the
Federal statutory tax rate to the actual tax provision:

Federal statutory rate............................................ $ 264,517
NOL's for which no benefit is recognized.......................... (264,517)
---------
Provision for income taxes...................................... $ --
=========

(8) SIGNIFICANT CUSTOMER

CTC has one significant customer that accounts for approximately 30% of
total sales. As of December 31, 1997 this customer had an outstanding accounts
receivable balance of $302,004.

(9) SUBSEQUENT EVENTS

During February of 1998, the Company acquired equipment from Spokane Auto
Transport for approximately $865,000 of cash. The aggregate purchase price,
over the fair value of equipment acquired of approximately $361,000, was
recognized as goodwill and is being amortized over 15 years on a straight-line
basis. In March of 1998, the Company acquired equipment from All West Auto
Transport for $550,000 of cash. The aggregate purchase price, over the fair
value of equipment acquired of approximately $150,000, was recognized as
goodwill and is being amortized over 15 years on a straight-line basis. These
assets were included in the sale to United Road Services, Inc.

During July 1998, CTC completed an asset purchase transaction with United
Road Services, Inc. (URS) whereby CTC sold all of its assets, properties and
business to URS. URS also assumed all current liabilities and indebtedness of
CTC. The assets sold to URS included receivables, fixed assets and tangible
personal property, customer accounts, cash and cash equivalents, prepaids,
leasehold interests, proprietary rights, licenses and permits and other
assets.

Subsequent to the closing of the asset purchase transaction, URS has paid
off all outstanding indebtedness.

F-143

INDEPENDENT AUDITORS' REPORT

The Stockholders
Schroeder Auto Carriers, Inc.:

We have audited the accompanying balance sheet of Schroeder Auto Carriers,
Inc. as of December 31, 1997 and the related statements of operations,
stockholders' equity and cash flows for the year then ended. These financial
statements are the responsibility of Schroeder Auto Carriers, Inc.'s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

In our opinion the financial statements referred to above present fairly, in
all material respects, the financial position of Schroeder Auto Carriers, Inc.
as of December 31, 1997, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

/s/ KPMG LLP

Denver, Colorado
August 13, 1998

F-144

SCHROEDER AUTO CARRIERS, INC.

BALANCE SHEET

ASSETS

DECEMBER 31, JUNE 30,
1997 1998
------------ -----------
(UNAUDITED)

Current assets:
Cash................................................. $ 54,216 $ 107,504
Trade accounts receivable, net of allowance for
doubtful accounts of $78,215 and $62,871,
respectively........................................ 736,954 744,798
Accounts receivable from employees................... 4,207 8,381
Prepaid expenses..................................... 3,300 39,309
---------- ----------
Total current assets.............................. 798,677 899,992
Property and equipment, net.......................... 738,109 1,166,502
---------- ----------
Total assets...................................... $1,536,786 $2,066,494
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt............... $ 25,087 $ 93,852
Accounts payable..................................... 116,068 158,287
Accrued payroll and related costs.................... 26,852 56,201
Current portion of notes payable to related parties.. 180,000 180,000
---------- ----------
Total current liabilities......................... 348,007 488,340
Long-term debt, excluding current installments........ 101,895 340,882
Notes payable to related parties...................... 25,000 --
---------- ----------
Total liabilities................................. 474,902 829,222
---------- ----------
Stockholders' equity:
Common stock, $1 par value. 700,000 shares
authorized; 35,000 shares issued and outstanding.... 35,000 35,000
Retained earnings.................................... 1,026,884 1,202,272
---------- ----------
Total stockholders' equity........................ 1,061,884 1,237,272
---------- ----------
Total liabilities and stockholders' equity........ $1,536,786 $2,066,494
========== ==========

See accompanying notes to financial statements.

F-145

SCHROEDER AUTO CARRIERS, INC.

STATEMENT OF OPERATIONS

SIX-MONTHS
YEAR ENDED ENDED JUNE 30
DECEMBER 31, ----------------------
1997 1997 1998
------------ ---------- ----------
(UNAUDITED)

Net revenue............................... $5,799,071 $2,727,236 $3,168,786
Cost of revenue........................... 4,567,940 2,086,816 2,536,525
---------- ---------- ----------
Gross profit.......................... 1,231,131 640,420 632,261
Selling, general and administrative
expenses................................. 888,887 395,454 395,870
---------- ---------- ----------
Income from operations................ 342,244 244,966 236,391
---------- ---------- ----------
Other income (expense):
Interest expense......................... (31,235) (14,921) (17,979)
Gain on sale of assets................... 9,431 -- --
Other.................................... 3,507 2,602 1,021
---------- ---------- ----------
Net income............................ $ 323,947 $ 232,647 $ 219,433
========== ========== ==========

See accompanying notes to financial statements.

F-146

SCHROEDER AUTO CARRIERS, INC.

STATEMENT OF STOCKHOLDERS' EQUITY

TOTAL
COMMON RETAINED STOCKHOLDERS'
STOCK EARNINGS EQUITY
------- ---------- --------------

BALANCES AT JANUARY 1, 1997................. $35,000 $ 767,293 $ 802,293
Net income--1997............................ -- 323,947 323,947
Distribution to stockholders................ -- (64,356) (64,356)
------- ---------- ----------
BALANCES AT DECEMBER 31, 1997............... 35,000 1,026,884 1,061,884
Net income--six-months ended June 30, 1998
(unaudited)................................ -- 219,433 219,433
Distribution to stockholders--six-months
ended June 30, 1998 (unaudited)............ -- (44,045) (44,045)
------- ---------- ----------
BALANCE AT JUNE 30, 1998 (UNAUDITED)........ $35,000 $1,202,272 $1,237,272
======= ========== ==========

See accompanying notes to financial statements.

F-147

SCHROEDER AUTO CARRIERS, INC.

STATEMENT OF CASH FLOWS

SIX-MONTHS
YEAR ENDED ENDED JUNE 30
DECEMBER 31 --------------------
1997 1997 1998
----------- --------- ---------
(UNAUDITED)

Cash flows from operating activities:
Net income................................. $ 323,947 $ 232,647 $ 219,433
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation.............................. 69,682 33,393 43,104
Gain on sale of assets.................... (9,431) -- --
Increase in trade accounts receivable..... (178,667) (99,663) (12,018)
Decrease in accounts receivable from
employees................................ 5,954 -- --
Decrease (increase) in prepaid expenses... 6,899 (21,186) (36,009)
(Decrease) increase in accounts payable... (54,881) (60,531) 42,219
Increase in accrued payroll and related
costs.................................... 9,507 492 29,349
--------- --------- ---------
Net cash provided by operating
activities............................. 173,010 85,152 286,078
--------- --------- ---------
Cash flows from investing activities:
Proceeds from sale of assets............... 15,000 -- --
Purchases of property and equipment........ (221,829) (168,500) (471,497)
--------- --------- ---------
Net cash used in investing activities... (206,829) (168,500) (471,497)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from long-term debt............... 142,000 142,000 450,512
Principal payments on long-term debt....... (139,646) (41,077) (142,760)
Distributions to stockholders.............. (64,356) (50,000) (44,045)
Proceeds from notes payable to related
parties................................... 205,000 170,000 --
Principal payments on notes payable to
related parties........................... (160,000) (160,000) (25,000)
--------- --------- ---------
Net cash (used in) provided by financing
activities............................. (17,002) 60,923 238,707
--------- --------- ---------
Net (decrease) increase in cash......... (50,821) (22,425) 53,288
Cash at beginning of period................. 105,037 105,037 54,216
--------- --------- ---------
Cash at end of period....................... $ 54,216 $ 82,612 $ 107,504
========= ========= =========
Supplemental disclosure of cash flow
information--cash paid during the period
for interest............................... $ 31,235 $ 14,921 $ 17,979
========= ========= =========

See accompanying notes to financial statements.

F-148

SCHROEDER AUTO CARRIERS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Schroeder Auto Carriers, Inc. (the Company) was founded in 1990 and provides
vehicle transport services for auto auctions, leasing companies, auto dealers
and individuals. The Company owns and operates approximately 35 vehicles
throughout 27 states in the western region of the United States. The Company
also uses, on a limited basis, independent contractors who have their own
equipment. The independent contractors operate under a carrier agreement when
performing transport services for the Company. The Company is headquartered in
Henderson, Colorado and also maintains a satellite facility in Salt Lake City,
Utah.

(b) Revenue Recognition

Revenue is recognized upon the delivery of the vehicles to their final
destination. Expenses related to the generation of revenue are recognized as
incurred.

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the following
estimated useful lives of the individual assets.

Transportation equipment......................................... 15 years
Vehicles......................................................... 5 years
Office equipment................................................. 7 years

(d) Income Taxes

The Company operates as an S-corporation for federal and state income tax
purposes and all corporate earnings flow through and are taxed solely at the
stockholder level. Accordingly, no income tax expense has been recorded for
the year ended December 31, 1997.

(e) Use of Estimates

(f) Fair Value of Financial Instruments

The carrying values of the Company's financial instruments, which are
comprised mainly of receivables and payables, approximate their fair values.

(g) Interim Financial Statements

F-149

SCHROEDER AUTO CARRIERS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1997 consists of the following:

Transportation equipment.......................................... $ 845,138
Vehicles.......................................................... 62,144
Office equipment.................................................. 54,297
---------
Total......................................................... 961,579
Less: accumulated depreciation.................................... (223,470)
---------
$ 738,109
=========

Depreciation of property and equipment in 1997 totaled $69,682.

(3) INDEBTEDNESS

The Company has a note payable to First Security Bank payable in monthly
installments of $2,958, including interest at 9%, maturing April 2002. The
remaining balance on the note at December 31, 1997 is $126,982; $25,087 of
which is classified in current liabilities.

The Company has a note payable to stockholders of $180,000, payable in a
lump sum on August 15, 1998. The note bears interest at 8.75% per annum which
is paid monthly. In addition, the Company has a note payable to other related
parties of $25,000, payable in a lump sum on June 1, 1999. The note bears
interest at 10% per annum, paid monthly. For 1997, interest expense on the
above notes was $18,250.

Debt maturities at December 31 are as follows:

1998................................................................ $205,087
1999................................................................ 52,441
2000................................................................ 30,017
2001................................................................ 32,830
2002................................................................ 11,607
--------
Total............................................................. $331,982
========

(4) LEASES

The Company leases their main facility from a related party. The lease is a
non-cancelable operating lease with future minimum lease payments at December
31, 1997 as follows:

Year ending December 31:
1998............................................................. $ 96,000
1999............................................................. 96,000
2000............................................................. 96,000
2001............................................................. 96,000
2002............................................................. 96,000
Thereafter....................................................... 1,264,000
----------
Total minimum lease payments................................... $1,744,000
==========

Total rent expense for 1997, all of which was paid to a related party, was
$96,900.

F-150

SCHROEDER AUTO CARRIERS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(5) INCOME TAXES

As the Company uses accelerated methods of depreciation for income tax
purposes, the recorded values of property and equipment are approximately
$423,000 higher than those used for tax purposes at December 31, 1997.
Depreciation expense reported for tax purposes for 1997 was approximately
$152,000 higher than the amount recorded for book purposes. The tax basis of
all other assets and liabilities does not differ materially from their
recorded values at December 31, 1997.

(6) CONTINGENT LIABILITIES

(7) SUBSEQUENT EVENT

On July 1, 1998 all of the outstanding stock of the Company was sold to
United Road Service, Inc. The sales transaction will be accounted for as a
purchase.

F-151

INDEPENDENT AUDITORS' REPORT

The Stockholder
Keystone Towing, Inc.:

We have audited the accompanying balance sheets of Keystone Towing, Inc.
("Keystone") as of December 31, 1996 and 1997, and the related statements of
operations, stockholder's equity, and cash flows for the years then ended.
These financial statements are the responsibility of Keystone's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Keystone Towing, Inc. as
of December 31, 1996 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.

/s/ KPMG LLP

Albany, New York
January 16, 1998,
except as to note 13(b),
which is as of May 6, 1998

F-152

KEYSTONE TOWING, INC.

BALANCE SHEETS

DECEMBER 31
------------------- JUNE 30,
1996 1997 1998
-------- ---------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash......................................... $193,165 $ 71,634 $ 100,312
Trade accounts receivable.................... 97,368 167,192 151,677
Accounts receivable from employees........... 3,443 2,989 3,640
Inventory.................................... 15,000 60,990 60,510
Note receivable--other....................... -- 5,000 87,110
Prepaid and other current assets (note 2).... 47,684 98,111 82,958
-------- ---------- ----------
Total current assets....................... 356,660 405,916 486,207
Property and equipment, net (notes 3, 6 and
7)............................................ 598,850 1,038,776 1,044,167
Other non-current assets (note 4).............. -- 82,256 84,858
-------- ---------- ----------
Total assets............................... $955,510 $1,526,948 $1,615,232
======== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of notes payable (note
6).......................................... $ 94,782 $ 278,765 $ 337,181
Borrowings under lines of credit (note 6).... 7,558 73,297 96,847
Current installment of note payable to
stockholder (notes 6 and 10)................ 31,724 35,046 33,337
Accounts payable............................. 88,176 200,779 215,401
Accrued payroll and related costs............ 53,309 52,157 61,787
Payable to affiliate (note 10)............... -- 40,909 --
Other liabilities (note 5)................... 301,965 326,778 367,220
-------- ---------- ----------
Total current liabilities.................. 577,514 1,007,731 1,111,773
Long-term liabilities:
Notes payable, excluding current installments
(note 6).................................... 156,940 349,982 349,492
Note payable to stockholder, excluding
current installments (notes 6 and 10)....... 50,314 15,268 --
-------- ---------- ----------
Total liabilities.......................... 784,768 1,372,981 1,461,265
-------- ---------- ----------
Stockholder's equity:
Common stock, $2.00 par value. Authorized
100,000 shares; issued and outstanding
10,000 shares in 1996 and 1997.............. 20,000 20,000 20,000
Retained earnings............................ 150,742 133,967 133,967
-------- ---------- ----------
Total stockholder's equity................. 170,742 153,967 153,967
-------- ---------- ----------
Total liabilities and stockholder's
equity.................................... $955,510 $1,526,948 $1,615,232
======== ========== ==========

See accompanying notes to financial statements.

F-153

KEYSTONE TOWING, INC.

STATEMENTS OF OPERATIONS

SIX-MONTHS
YEAR ENDED DECEMBER 31 ENDED JUNE 30
------------------------ ----------------------
1996 1997 1997 1998
----------- ----------- ---------- ----------
(UNAUDITED)

Net revenue.................. $ 3,369,354 $ 3,943,073 $1,926,852 $1,998,098
Cost of revenue.............. 2,132,646 2,606,452 1,204,688 1,329,626
----------- ----------- ---------- ----------
Gross profit............. 1,236,708 1,336,621 722,164 668,472
Selling, general and
administrative expenses..... 934,105 1,140,252 592,958 651,884
----------- ----------- ---------- ----------
Income from operations... 302,603 196,369 129,206 16,588
----------- ----------- ---------- ----------
Other income (expense):
Interest expense........... (28,067) (71,451) (29,178) (26,110)
Interest income............ 2,534 1,556 -- --
Gain on sale of assets..... -- 36,275 36,275 --
Other (note 10)............ -- 76,312 38,156 94,244
----------- ----------- ---------- ----------
Net income............... $ 277,070 $ 239,061 $ 174,459 $ 84,722
=========== =========== ========== ==========

See accompanying notes to financial statements.

F-154

KEYSTONE TOWING, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY

TOTAL
COMMON RETAINED STOCKHOLDER'S
STOCK EARNINGS EQUITY
------- --------- -------------

Balance at December 31, 1995.................. $20,000 $ 88,465 $ 108,465
Net income--1996.............................. -- 277,070 277,070
Owner Distribution............................ -- (214,793) (214,793)
------- --------- ---------
Balance at December 31, 1996.................. 20,000 150,742 170,742
Net income--1997.............................. -- 239,061 239,061
Owner distribution............................ -- (255,836) (255,836)
------- --------- ---------
Balance at December 31, 1997.................. 20,000 133,967 153,967
Net income--six-months ended June 30, 1998
(unaudited).................................. -- 84,722 84,722
Owner distribution--six-months ended June 30,
1998 (unaudited)............................. -- (84,722) (84,722)
------- --------- ---------
Balance at June 30, 1998 (unaudited).......... $20,000 $ 133,967 $ 153,967
======= ========= =========

See accompanying notes to financial statements.

F-155

KEYSTONE TOWING, INC.

STATEMENTS OF CASH FLOWS

YEAR ENDED SIX-MONTHS
DECEMBER 31 ENDED JUNE 30
-------------------- --------------------
1996 1997 1997 1998
--------- --------- --------- ---------
(UNAUDITED)

Cash flows from operating
activities:
Net income....................... $ 277,070 $ 239,061 $ 174,459 $ 84,722
Adjustments to reconcile net
income to net cash provided by
operating activities, net of
effects of acquisitions:
Depreciation and amortization.. 155,367 280,075 86,914 148,311
Gain on sale of assets......... -- (36,275) (275) --
Decrease (increase) in trade
accounts receivable........... (11,892) (69,824) (26,251) 15,515
Decrease (increase) in accounts
receivable from employees..... (2,015) 454 35 (651)
Increase in inventory.......... (5,000) (45,990) -- --
Decrease (increase) in prepaid
and other current assets...... 10,619 (50,427) (138,568) 13,031
Increase (decrease) in accounts
payable....................... 48,580 112,603 (62,126) 14,622
Increase (decrease) in accrued
payroll and related costs..... 16,970 (1,152) 65,642 9,630
Increase (decrease) in payable
to affiliate.................. -- 40,909 -- (40,909)
Increase (decrease) in other
liabilities................... 44,984 24,813 (45,334) 40,442
--------- --------- --------- ---------
Net cash provided by
operating activities........ 534,683 494,247 54,496 284,713
--------- --------- --------- ---------
Cash flows from investing
activities:
Purchases of property and
equipment....................... (97,818) (396,324) (402,678) (153,702)
Proceeds from sale of assets..... -- 40,000 4,000 --
Decrease (increase) in note
receivable--other............... 24,351 (5,000) (185,196) (82,110)
--------- --------- --------- ---------
Net cash used in investing
activities.................. (73,467) (361,324) (583,874) (235,812)
--------- --------- --------- ---------
Cash flows from financing
activities:
Proceeds from long-term debt..... -- 13,289 494,677 171,117
Principal payments on long-term
debt............................ (146,768) (77,646) (87,141) (130,168)
Borrowings on line of credit,
net............................. 7,557 65,739 90,002 23,550
Owner distributions.............. (214,793) (255,836) (150,094) (84,722)
--------- --------- --------- ---------
Net cash (used in) provided
by financing activities..... (354,004) (254,454) 347,444 (20,223)
--------- --------- --------- ---------
Net increase (decrease) in cash.... 107,212 (121,531) (181,934) 28,678
Cash at beginning of period........ 85,953 193,165 193,165 71,634
--------- --------- --------- ---------
Cash at end of period.............. $ 193,165 $ 71,634 $ 11,231 $ 100,312
========= ========= ========= =========
Supplemental disclosure of cash
flow information:
Cash paid during the period for:
Interest....................... $ 28,067 $ 71,451 $ 29,178 $ 26,387
========= ========= ========= =========

See accompanying notes to financial statements.

F-156

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1996 AND 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Keystone Towing, Inc. ("Keystone") was founded in 1991. Keystone's primary
business is towing, impounding and storing vehicles for municipal,
governmental and commercial customers in Southern California. Keystone has one
facility in Los Angeles. It operates approximately 20 vehicles. Keystone
became an S-corporation under California law on June 3, 1993.

(b) Revenue Recognition

Keystone operates as one segment related to transportation of vehicles and
equipment for customers.

Keystone's revenue is derived from customers who require a towing service,
fees related to the storage of vehicles that have been towed, and auction
sales of unclaimed vehicles. Towing revenue is recognized at the completion of
each towing engagement, storage fees are accrued over the period the vehicles
are held in the impound facility, and revenue from auction sales are recorded
when title to the vehicles has been transferred. Expenses related to the
generation of revenue are recognized as incurred.

Inventories consist primarily of spare parts used for repair and maintenance
of transportation equipment. Inventories are stated at the lower of cost or
market.

(d) Property and Equipment

Property and equipment are stated at cost. Depreciation is determined for
financial statement and tax purposes using the double-declining balance method
over the estimated useful lives of the individual assets or, for leasehold
improvements, over the terms of the related leases if shorter. For financial
statement purposes, Keystone provides for depreciation of property and
equipment over the following estimated useful lives:

(e) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Keystone on bank loans with
similar terms and maturities, the fair value of Keystone's financial
instruments approximates their carrying values.

(f) Income Taxes

Effective June 3, 1993, Keystone elected to file its Federal income tax
returns under the S-corporation provisions of the Internal Revenue Code and
was granted S-corporation status for California state tax purposes. In
accordance with the Federal provisions, corporate earnings flow through and
are taxed solely at the stockholder level.

Under the provisions of the California franchise tax law, S-corporation
earnings are assessed a 1.5% surtax at the corporate level and flow through to
the stockholder to be taxed at the individual level. Accordingly, no income
tax expense has been recorded for the years ended December 31, 1996 and 1997.

F-157

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(g) Use of Estimates

Management of Keystone has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

(h) Interim Financial Statements

The interim financial information included in these financial statements is
unaudited but reflects all adjustments (consisting of only normal accruals)
which are, in the opinion of management, necessary for a fair presentation of
the results for the interim periods presented.

(2) PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consists of:

DECEMBER 31
---------------
1996 1997
------- -------

Prepaid insurance........................................... $ 6,750 $13,549
Prepaid vehicle registration................................ -- 22,010
Miscellaneous deposits...................................... 32,304 39,657
Prepaid property taxes...................................... 3,432 2,631
Other....................................................... 5,198 20,264
------- -------
$47,684 $98,111
======= =======

(3) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

DECEMBER 31
----------------------
1996 1997
---------- ----------

Automobiles and transportation equipment............. $ 578,891 $1,025,234
Furniture and fixtures............................... 129,592 144,361
Machinery and equipment.............................. 240,653 270,163
Leasehold improvements............................... 273,137 460,641
---------- ----------
Total.............................................. 1,222,273 1,900,399
Less accumulated depreciation and amortization....... (623,423) (861,623)
---------- ----------
$ 598,850 $1,038,776
========== ==========

Depreciation and amortization of property and equipment in 1996 and 1997
totaled $155,367 and $274,259, respectively.

(4) OTHER NON-CURRENT ASSETS

Other non-current assets consists of the following (see note 8):

DECEMBER 31,
1997
------------

Goodwill........................................................ $85,572
Covenant-not-to-compete......................................... 2,500
-------
Total......................................................... 88,072
Less accumulated amortization................................... (5,816)
-------
$82,256
=======

F-158

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Goodwill, which represents the excess of purchase price over the fair value
of net assets acquired, and covenant-not-to-compete are amortized on a
straight-line basis over fifteen and five years, respectively. Amortization
expense for other non-current assets totaled $5,816 in 1997.

(5) OTHER LIABILITIES

Other liabilities consists of:

DECEMBER 31
-----------------
1996 1997
-------- --------

Retirement savings plan payable........................... $ 70,964 $125,261
Parking and other taxes payable(a)........................ 123,647 107,734
Lien sale payable(b)...................................... 75,299 87,938
Insurance premiums payable................................ 3,745 4,220
Other..................................................... 28,310 1,625
-------- --------
$301,965 $326,778
======== ========

- --------
(a) Parking and other taxes payable consist primarily of obligations to remit
standard parking fees to the City of Los Angeles.
(b) Lien sale payables arise from Keystone's obligation to remit to the state
a portion of proceeds generated by the sale of cars impounded by Keystone
but left unclaimed.

(6) INDEBTEDNESS

Keystone has available a $75,000 line of credit with a bank, expiring
January 16, 1998. Interest is payable at 10.5%. Total borrowings under this
unsecured line of credit as of December 31, 1996 and 1997 amounted to $7,558
and $73,297, respectively.

Keystone's long-term debt consists of:

DECEMBER 31
--------------------
1996 1997
--------- ---------

Note payable to stockholder, payable in monthly
installments of $3,208, including interest at 10.06%,
maturing May 1999.................................... $ 82,038 $ 50,314
Notes payable to banks for various property and
equipment, payable in monthly installments ranging
from $427 to $5,527, including interest ranging from
8 1/2% to 11%, and maturing at dates ranging from
January, 1998 to April, 2002. Secured by the related
assets............................................... 209,136 599,407
Borrowings under a capital lease agreement, payable in
monthly installments of $1,492, including interest at
11%, maturing October 1999. Secured by the related
asset ............................................... 42,586 29,340
--------- ---------
Total long-term debt.............................. 333,760 679,061
Less installments due within one year............... (126,506) (313,811)
--------- ---------
Long-term debt, excluding current installments.... $ 207,254 $ 365,250
========= =========

F-159

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Annual maturities for the next five years are as follows:

1998................................................................ $313,811
1999................................................................ 176,125
2000................................................................ 109,042
2001................................................................ 72,782
2002................................................................ 7,301
--------
$679,061
========

(7) LEASES

Keystone leases the building used for its operations under a non-cancelable
lease agreement. The lease is classified as an operating lease. The agreement
provides for monthly rental payment of $39,630 through January 2002. Keystone
is responsible for all operating costs related to the property. Total rent
expense, including common area maintenance charges, for 1996 and 1997 was
$488,000 and $504,000, respectively.

Keystone is obligated under a capital lease for transportation equipment
that expires in October 1999. The capital lease obligation is included in the
long-term debt table and schedule of maturities in note 6.

Future minimum lease payments under noncancellable operating leases (with
initial or remaining lease terms in excess of one year) as of December 31,
1997 are:

1998.............................................................. $ 475,560
1999.............................................................. 475,560
2000.............................................................. 475,560
2001.............................................................. 475,560
2002.............................................................. 39,630
----------
$1,941,870
==========

(8) NON-CASH TRANSACTIONS

During March 1997, Keystone acquired, under the purchase method of
accounting, certain assets of a competitor for consideration of $203,702 in
the form of assumed liabilities of the selling party. The assets acquired were
recorded at their estimated fair value of $115,000. In addition, Keystone
secured a five year non-competition agreement from the selling party valued at
$2,500. The difference between the consideration given and the fair value of
assets acquired was recorded as goodwill in the amount of $85,572 (see note
4).

During 1997, Keystone leased $205,956 of various automobile and
transportation equipment through several lending institutions (see note 6).

(9) EMPLOYEE BENEFITS

Keystone has a retirement savings and disability plan pursuant to section
414(i) of the Internal Revenue Code that is available to all employees who
have at least 1,000 hours of service to Keystone during the plan year and are
employed on the last day of the year. This discretionary contribution plan
allows the employer discretion as to the amount to be contributed each year.
Keystone's contribution payable, included in other accrued liabilities on the
accompanying balance sheet, amounted to $70,964 and $125,261 as of December
31, 1996 and 1997, respectively (see note 5).

F-160

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(10) RELATED PARTY TRANSACTIONS

Keystone is indebted to the sole stockholder under an unsecured note,
bearing interest at 10.06% per annum (see note 6).

In the normal course of business Keystone performs subcontract towing
services for a related party company owned by another related party. Keystone
recognizes revenue on the towing services performed on behalf of the related
party net of subcontract expenses. The net revenue, recognized on subcontract
towing services performed amounted to approximately $17,000 and $19,000 for
1996 and 1997, respectively, and is included in net revenue on the statements
of operations. Additionally, Keystone recognized management fee income for
services performed on behalf of the related party company. Management fee
income amounted to approximately $0 and $16,000 for 1996 and 1997,
respectively.

The owner of Keystone is also a 10% owner of an Official Police Garage
("OPG"). Keystone recognizes management fee income for services performed on
behalf of the related party company. Management fee income amounted to
approximately $0 and $60,000 for 1996 and 1997, respectively.

The payable to related party of $40,909 on the accompanying balance sheet as
of December 31, 1997 represents miscellaneous obligations to the OPG discussed
above.

(11) CONTINGENT LIABILITIES

Various legal claims arise against Keystone during the normal course of
business. In the opinion of management, liabilities, if any, arising from
proceedings would not have a material effect on the financial statements.

(12) CONCENTRATION OF BUSINESS RISKS

Revenue generated from Keystone's exclusive agreement with the LAPD
discussed in note 1 represented approximately 30% of total revenues in 1996
and 27% in 1997. The loss of such business could significantly effect
Keystone's performance.

(13) SUBSEQUENT EVENT

(a) During February 1998, the stockholder entered into a definitive
agreement to sell Keystone to United Road Services, Inc. The sales
transaction, affected through a combination of cash and common stock of United
Road Services, Inc., is contingent upon the initial public offering of the
common stock of United Road Services, Inc., and the consent of the Los Angeles
City Council under Keystone's contract to provide police towing for a
specified police district in Los Angeles. The anticipated selling price of
Keystone exceeds its net assets as of December 31, 1997. Prior to the sale of
Keystone, the stockholder intends to take a distribution of not more than
$150,000.

(b) On May 1, 1998, United Road Services, Inc. successfully completed the
initial public offering of its common stock.

F-161

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Fast Towing, Inc.:

We have audited the accompanying balance sheet of Fast Towing, Inc. as of
December 31, 1997, and the related statements of operations, stockholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Fast Towing, Inc. as of
December 31, 1997, and the results of its operations and its cash flows for
the year ended December 31, 1997, in conformity with generally accepted
accounting principles.

/s/ KPMG LLP

Phoenix, Arizona
July 31, 1998

F-162

FAST TOWING, INC.

BALANCE SHEET

DECEMBER 31, JUNE 30,
1997 1998
------------ -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents........................... $ 92,186 $ 22,200
Trade accounts receivable........................... 214,958 100,449
Prepaid expenses and other current assets........... 7,214 37,514
-------- --------
Total current assets.............................. 314,358 160,163
Property and equipment, net (note 2).................. 469,825 515,119
Other assets.......................................... 18,531 1,600
Intangibles, net (note 3)............................. 17,014 16,431
-------- --------
Total assets...................................... $819,728 $693,313
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Line of credit (note 4)............................. $ 49,113 $238,763
Accounts payable.................................... 5,803 37,594
Income taxes payable (note 6)....................... 1,220 --
Deferred income taxes (note 6)...................... 5,889 5,889
Accrued expenses.................................... 8,460 14,054
Other accrued liabilities........................... 3,000 6,267
-------- --------
Total current liabilities......................... 73,485 302,567
-------- --------
Stockholders' equity:
Common stock, no par value, 100,000 shares
authorized and 550 shares issued and outstanding... 550 550
Retained earnings................................... 745,693 390,196
-------- --------
Total stockholders' equity........................ 746,243 390,746
Commitments and contingencies (notes 4, 5 and 8)
-------- --------
Total liabilities and stockholders' equity........ $819,728 $693,313
======== ========

See accompanying notes to financial statements.

F-163

FAST TOWING, INC.

STATEMENT OF OPERATIONS

SIX-MONTHS
YEAR ENDED ENDED JUNE 30
DECEMBER 31, ---------------------
1997 1997 1998
------------ ---------- ----------
(UNAUDITED)

Net revenue................................ $3,354,597 $1,438,065 $1,850,910
Cost of revenue............................ 1,775,911 796,991 914,517
---------- ---------- ----------
Gross profit........................... 1,578,686 641,074 936,393
Selling, general and administrative
expenses.................................. 1,431,882 446,067 1,123,447
---------- ---------- ----------
Income (loss) from operations.......... 146,804 195,007 (187,054)
---------- ---------- ----------
Other (expense):
Interest (expense) income................ (6,703) 373 408
Gain (loss) on sale of assets............ (9,545) 7,708 (140,213)
---------- ---------- ----------
Income (loss) before income taxes...... 130,556 203,088 (326,859)
Income tax expense (note 6).............. 47,009 40,710 28,638
---------- ---------- ----------
Net income (loss)...................... $ 83,547 $ 162,378 $ (355,497)
========== ========== ==========

See accompanying notes to financial statements.

F-164

FAST TOWING, INC.

STATEMENT OF STOCKHOLDERS' EQUITY

TOTAL
COMMON RETAINED STOCKHOLDERS'
STOCK EARNINGS EQUITY
------ --------- -------------

Balance at December 31, 1996................... $550 $ 662,146 $ 662,696
Net income..................................... -- 83,547 83,547
---- --------- ---------
Balance at December 31, 1997................... 550 745,693 746,243
Net loss--six-months ended June 30, 1998
(unaudited)................................... -- (355,497) (355,497)
---- --------- ---------
Balance at June 30, 1998 (unaudited)........... $550 $ 390,196 $ 390,746
==== ========= =========

F-165

FAST TOWING, INC.

STATEMENT OF CASH FLOWS

SIX-MONTHS
YEAR ENDED ENDED JUNE 30
DECEMBER 31, -------------------
1997 1997 1998
------------ -------- ---------
(UNAUDITED)

Cash flows from operating activities:
Net income (loss).......................... $ 83,547 $162,378 $(355,497)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization............ 212,144 93,703 90,196
Deferred income taxes.................... 5,889 -- --
Loss (gain) on sale of property and
equipment............................... 9,545 (7,708) 140,213
(Increase) decrease in trade accounts
receivable.............................. (20,750) (73,061) 114,509
Decrease (increase) in prepaid expenses
and other current assets................ 1,363 (18,023) (30,300)
Decrease in other assets................. 1,307 16,163 16,931
Increase in accounts payable............. 5,803 -- 31,791
(Decrease) increase in income taxes
payable................................. (30,031) 9,459 (30,760)
(Decrease) increase in accrued expenses.. (4,468) (4,047) 38,401
-------- -------- ---------
Net cash provided by operating
activities............................ 264,349 178,864 15,484
-------- -------- ---------
Cash flows from investing activities:
Purchases of property and equipment........ (158,455) (50,615) (321,066)
Proceeds from sale of equipment............ 119,600 21,195 45,946
Issuance of note receivable................ -- (15,000) --
-------- -------- ---------
Net cash used in investing activities.. (38,855) (44,420) (275,120)
-------- -------- ---------
Cash flows from financing activities:
Net increase in line of credit............. 49,113 -- 189,650
Principal payments on long-term debt....... (241,606) (48,066) --
-------- -------- ---------
Net cash (used in) provided by
financing activities.................. (192,493) (48,066) 189,650
-------- -------- ---------
Net increase (decrease) in cash and
cash equivalents...................... 33,001 86,378 (69,986)
Cash and cash equivalents at beginning of
period...................................... 59,185 59,185 92,186
-------- -------- ---------
Cash and cash equivalents at end of period... $ 92,186 $145,563 $ 22,200
======== ======== =========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest................................. $ 7,471
========
Income taxes............................. $ 70,660
========

See accompanying notes to financial statements.

F-166

FAST TOWING, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Fast Towing, Inc. was founded in 1991 and operates as an Arizona
corporation. Fast Towing's primary business is towing, impounding and storing
vehicles. Fast Towing has two facilities in the Phoenix metropolitan area. It
operates approximately 34 vehicles.

On June 14, 1997, Fast Towing purchased substantially all of the assets and
assumed certain liabilities of Pars Towing, Inc. The purchase price of
$162,000 was conveyed in the form of a note payable to the seller. The
transaction was accounted for under the purchase method of accounting.

REVENUE RECOGNITION

Fast Towing operates as one segment related to the transportation of
vehicles for customers.

Fast Towing's revenue is derived from customers who require transportation
of vehicles. Transport revenue is recognized upon the delivery of the vehicles
to their final destination. Expenses related to the generation of revenue are
recognized as incurred.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents of $92,186 at December 31, 1997 consist of bank
accounts and certificates of deposit with an initial term of less than three
months. For purposes of the statements of cash flows, Fast Towing considers
all highly liquid debt instruments with original maturities of three months or
less to be cash equivalents.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method for leasehold
improvements and the double-declining method for all other assets over the
estimated useful lives of the individual assets. For financial statement
purposes, Fast Towing provides for depreciation of property and equipment over
the following estimated useful lives.

Transportation equipment....................................... 5 years
Furniture and fixtures......................................... 7 years
Office equipment............................................... 5 years
Leasehold improvements......................................... 10-39 years

FAIR VALUE OF FINANCIAL INSTRUMENTS

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Fast Towing on bank loans
with similar terms and maturities, the fair value of Fast Towing's financial
instruments approximates their carrying values.

INCOME TAXES

Income taxes are accounted for under the asset and liability method for Fast
Towing, Inc. 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

F-167

FAST TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

and liabilities are measured using enacted 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
of a change in tax rates is recognized in income in the period that includes
the enactment date.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets
to be held and used is measured by a comparison of the carrying amount of an
asset to future undiscounted net cash flows expected to be generated by the
asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the
assets exceed the fair value of the assets. Assets to be disposed of are
reported at the lower of the carrying amount or fair value less costs to sell.

USE OF ESTIMATES

INTERIM FINANCIAL STATEMENTS

(2) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1997 consists of the following:

Transportation equipment....................................... $ 842,948
Machinery and equipment........................................ 50,877
Office equipment............................................... 46,628
Leasehold improvements......................................... 98,393
----------
1,038,846
Less accumulated depreciation and amortization................. (569,021)
----------
$ 469,825
==========

Depreciation of property and equipment in 1997 totaled $211,658.

(3) INTANGIBLES

Intangibles consist primarily of goodwill and a trade name. Intangibles are
being amortized on a straight-line basis over the expected period to be
benefited, generally 15 years.

(4) INDEBTEDNESS

Fast Towing maintains a $300,000 line of credit with Valley First Community
Bank. The line of credit bears interest at 9.5%. The line is collateralized by
substantially all the assets of Fast Towing. There were $49,113 in borrowings
against this line of credit at December 31, 1997.

F-168

FAST TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(5) LEASES

Fast Towing has several noncancelable operating leases, primarily for
transportation equipment and its operating facilities, that expire over the
next five years. Rental payments for the transportation equipment include
minimum rentals plus contingent rentals based on mileage. Rent expense in 1997
was $161,797.

Future minimum operating lease payments as of December 31, 1997 are:

Year ending December 31,
1998............................................................ $262,503
1999............................................................ 263,103
2000............................................................ 228,547
2001............................................................ 188,858
2002............................................................ 33,147
--------
$976,158
========

(6) INCOME TAXES

Income tax expense for the years ended December 31, 1997 consists of:

Current:
Federal.......................................................... $31,575
State............................................................ 9,545
-------
41,120
-------
Deferred:
Federal.......................................................... 4,522
State............................................................ 1,367
-------
5,889
-------
$47,009
=======

The provision for income taxes differs from the amount computed by applying
the statutory Federal income tax rate to income before taxes. The sources and
tax effects of the differences are as follows:

Computed "expected" federal income tax expense.................... $38,832
Expected state income taxes, net of federal benefit............... 7,667
Non deductible item............................................... 31
Other............................................................. 479
-------
$47,009
=======

The tax effects of temporary differences that give rise to a deferred tax
liability as of December 31, 1997 are as follows:

Deferred tax assets (liabilities):
Trade accounts receivable...................................... $(8,175)
Accounts payable............................................... 2,286
-------
Net deferred tax liability................................... $(5,889)
=======

F-169

FAST TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(7) RELATED PARTY TRANSACTIONS

During 1997, Fast Towing made payments of $39,606 to a stockholder in
payment of a note.

(8) CONTINGENT LIABILITIES

Various legal claims arise against Fast Towing during the normal course of
business. In the opinion of management, liabilities, if any, arising from
proceedings would not have a material effect on the financial statements.

(9) SUBSEQUENT EVENT

During June 1998, the stockholders entered into an agreement to sell Fast
Towing to United Road Services, Inc. The transaction, completed June 29, 1998,
was a cash transaction. The selling price of Fast Towing exceeds its net
assets as of December 31, 1997.

F-170

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Alert Auto Transport, Inc.:

We have audited the accompanying balance sheet of Alert Auto Transport,
Inc., as of May 31, 1998, and the related statements of earnings and retained
earnings, and cash flows for the year then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Alert Auto Transport,
Inc., as of May 31, 1998 and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

/s/ KPMG LLP

July 31, 1998
Birmingham, Alabama

F-171

ALERT AUTO TRANSPORT, INC.

BALANCE SHEET

MAY, 31, JUNE 30,
1998 1998
-------- --------
(UNAUDITED)

ASSETS
Current assets:
Cash................................................. $ 33,852 $184,657
Accounts receivable, net of allowance for doubtful
accounts of $7,000 and $7,000, respectively......... 158,244 216,234
Inventory............................................ 1,230 1,230
Income tax refund receivable (note 5)................ 1,212 1,212
Deferred income taxes (note 5)....................... 1,479 1,547
-------- --------
Total current assets............................... 196,017 404,880
Property and equipment, net (notes 2 and 3)............ 519,536 513,645
Notes receivable from stockholder (note 6)............. 17,500 17,500
-------- --------
Total assets....................................... $733,053 $936,025
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of notes payable (note 3)....... $ 17,798 $139,295
Accounts payable..................................... 74,801 99,355
Income taxes payable................................. -- 22,499
Accrued payroll and related costs.................... 20,576 474
-------- --------
Total current liabilities.......................... 113,175 261,623
Long-term liabilities:
Deferred income taxes (note 5)....................... 78,854 83,037
-------- --------
Total liabilities.................................. 192,029 344,660
-------- --------
Stockholder's equity:
Common stock, $10 par value. Authorized, issued and
outstanding 100 shares.............................. 1,000 1,000
Retained earnings.................................... 540,024 590,365
-------- --------
Total stockholder's equity......................... 541,024 591,365
-------- --------
Total liabilities and stockholder's equity......... $733,053 $936,025
======== ========

See accompanying notes to financial statements.

F-172

ALERT AUTO TRANSPORT, INC.

STATEMENT OF EARNINGS AND RETAINED EARNINGS

ONE-MONTH
YEAR ENDED ENDED JUNE 30
MAY 31, ------------------
1998 1997 1998
---------- -------- --------
(UNAUDITED)

Net revenue................................... $3,045,085 $298,818 $339,416
Cost of revenue (includes related party lease
expense of $488,421, $21,792, and $27,915,
respectively)................................ 2,657,228 183,162 240,063
---------- -------- --------
Gross profit.............................. 387,857 115,656 99,353
Selling, general, and administrative expenses
(includes related party lease expense of
$65,100, $4,800, and $5,150, respectively)... 267,851 20,692 22,279
---------- -------- --------
Income from operations.................... 120,006 94,964 77,074
Other income (expense):
Interest expense............................ (3,262) (365) (116)
Gain (loss) on sale of assets............... 21,690 (519) --
---------- -------- --------
Income before income taxes................ 138,434 94,080 76,958
Income tax expense (note 5)................... 23,660 16,078 26,617
---------- -------- --------
Net income................................ 114,774 78,002 50,341
Retained earnings, beginning of period........ 425,250 425,250 540,024
---------- -------- --------
Retained earnings, end of period.............. $ 540,024 $503,252 $590,365
========== ======== ========

See accompanying notes to financial statements.

F-173

ALERT AUTO TRANSPORT, INC.

STATEMENT OF CASH FLOWS

ONE-MONTH
YEAR ENDED ENDED JUNE 30
MAY 31, --------------------
1998 1997 1998
---------- --------- ---------
(UNAUDITED)

Cash flows from operating activities:
Net income................................... $ 114,774 $ 78,002 $ 50,341
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation................................ 70,499 5,875 5,891
(Gain) loss on sale of property and
equipment.................................. (21,690) 519 --
Deferred income taxes....................... 12,072 12,073 4,115
Increase in trade accounts receivable....... (41,855) (41,791) (57,990)
Increase in income tax refund receivable.... (1,212) -- --
(Decrease) increase in accounts payable..... (37,836) 24,689 24,554
(Decrease) increase in income taxes payable. (11,686) 4,005 22,499
Increase (decrease) in accrued payroll and
related costs.............................. 4,139 (5,795) (20,102)
--------- --------- ---------
Net cash provided by operating activities. 87,205 77,577 29,308
--------- --------- ---------
Cash flows from investing activities:
Purchases of property and equipment.......... (187,233) -- --
Proceeds from sale of equipment.............. 72,500 -- --
Loans to stockholder......................... (15,500) -- --
--------- --------- ---------
Net cash used in investing activities..... (130,233) -- --
--------- --------- ---------
Cash flows from financing activities:
Proceeds from short-term borrowings.......... -- -- 125,000
Principal payments on long-term debt......... (40,195) (3,254) (3,503)
--------- --------- ---------
Net cash (used in) provided by financing
activities............................... (40,195) (3,254) 121,497
--------- --------- ---------
Net (decrease) increase in cash........... (83,223) 74,323 150,805
Cash at beginning of period................... 117,075 117,075 33,852
--------- --------- ---------
Cash at end of period......................... $ 33,852 $ 191,398 $ 184,657
========= ========= =========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest.................................... $ 3,262 $ 399 $ 116
========= ========= =========
Income taxes................................ $ 24,486 $ -- $ --
========= ========= =========

See accompanying notes to financial statements.

F-174

ALERT AUTO TRANSPORT, INC.

NOTES TO FINANCIAL STATEMENTS

MAY 31, 1998

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Alert Auto Transportation, Inc. (the "Company") was founded on May 20, 1988.
The Company's primary business is transporting vehicles for auto auctions,
transportation brokers, auto dealers, and individuals, primarily in the
Southeast. The Company has facilities in Guntersville, Alabama.

(b) Revenue Recognition

Revenue is derived from customers who require transportation of vehicles.
Transport revenue is recognized upon the delivery of the vehicles to their
final destination. Expenses related to the generation of revenue are
recognized as incurred.

Property and equipment are stated at cost. Depreciation is calculated on the
straight-line method over the estimated useful lives of the assets. The
Company provides for depreciation of property and equipment using estimated
useful lives as follows:

Transportation equipment........................................... 10 years
Machinery and equipment............................................ 5-7 years
Office equipment................................................... 5-7 years

(d) Income Taxes

Income taxes are accounted for under the asset and liability method.
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 and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted 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 of a
change in tax rates is recognized in income in the period that includes the
enactment date.

(e) Use of Estimates

(f) Interim Financial Statements

(2) PROPERTY AND EQUIPMENT

Property and equipment at May 31, 1998 consists of the following:

Transportation equipment........................................... $801,299
Machinery and equipment............................................ 16,587
Office equipment................................................... 17,741
--------
Total.......................................................... 835,627
Less accumulated depreciation...................................... 316,091
--------
Property and equipment, net........................................ $519,536
========

F-175

ALERT AUTO TRANSPORT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(3) INDEBTEDNESS

Long-term debt at May 31, 1998 and 1997 consists of the following:

Note payable to AmSouth Bank, payable in monthly installments of
$3,618, including interest at 8.0 percent, maturing October 1998,
secured by equipment............................................. $ 17,798
Less installments due within one year............................. (17,798)
--------
Long-term debt, excluding current installments.................... $ --
========

(4) LEASES AND RELATED PARTY TRANSACTIONS

The Company leases trucks from its sole stockholder which are utilized in
operations of the business. Lease payments are 25 percent of the revenue
generated by the leased trucks. The total payments made to the stockholder in
1998 related to the lease agreements was $488,421.

The Company leases the building used for its operations from its
stockholder. The lease is classified as an operating lease and the Company is
responsible for all operating costs related to the property. Rent paid to the
stockholder in 1998 was $65,100.

(5) INCOME TAXES

Income tax expense for the year ended May 31, 1998, consists of:

Current:
Federal........................................................... $ 9,099
State............................................................. 2,489
-------
11,588
-------
Deferred:
Federal........................................................... 7,978
State............................................................. 4,094
-------
12,072
-------
Total income tax expense........................................ $23,660
=======

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate for the year ended May 31, 1998:

Computed expected tax expense...................................... $ 47,068
State income tax, net of Federal tax benefit....................... 3,928
Effect of graduated tax rates...................................... (28,135)
Other.............................................................. 799
--------
Total income tax expense....................................... $ 23,660
========

The tax effect of temporary differences that give rise to deferred tax
assets and deferred tax liabilities as of May 31, 1998 are presented below:

Deferred tax asset:
Accounts receivable, principally due to allowance for doubtful
accounts....................................................... $ 1,479
Deferred tax liability:
Property and equipment, principally due to differences in
depreciation................................................... (78,854)
--------
Net deferred tax liability.................................... $(77,375)
========

F-176

ALERT AUTO TRANSPORT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies, as
well as carryback opportunities, in making this assessment. Based upon the
level of historical taxable income, projections for future taxable income and
carryback opportunities over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not the Company will
realize the benefits of these deductible differences. The amount of the
deferred tax asset considered realizable, however, could be reduced in the
near term if estimates of future taxable income are reduced.

(6) CONCENTRATION OF BUSINESS RISKS

One customer, TNT Incorporated, accounted for approximately 22 percent of
Alert's sales in 1998. The loss of this customer could significantly affect
Alert's performance.

(7) SUBSEQUENT EVENTS

The Company's sole stockholder entered into a definitive agreement to sell
the Company to United Road Services, Inc. as of July 1, 1998.

F-177

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

You should rely only on the information contained in this document or that we
have referred you to. We have not authorized anyone to provide you with
information that is different. This prospectus is not an offer to sell Common
Stock and it is not soliciting an offer to buy Common Stock in any state where
the offer or sale is not permitted.

1,213,944 SHARES

UNITED ROAD
SERVICES, INC.

COMMON STOCK

JANUARY , 1999

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

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale of the Common Stock being registered
hereby.

ITEM AMOUNT
---- --------

SEC registration fee............................................ $ 2,643
Legal fees and expenses......................................... 75,000*
Accounting fees and expenses.................................... 150,000*
Miscellaneous expenses.......................................... 2,357
--------
Total......................................................... $230,000
========

--------
* Estimated

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS,

The Registrant has included in its Certificate of Incorporation and Bylaws
provisions to (i) eliminate the personal liability of its directors for
monetary damages resulting from breaches of their fiduciary duty to the extent
permitted by the General Corporation Law of the State of Delaware (the "DGCL")
and (ii) indemnify its directors and officers to the fullest extent permitted
by the DGCL, including circumstances in which indemnification is otherwise
discretionary.

Section 145 of the DGCL permits a corporation, under specified
circumstances, to indemnify its directors, officers, employees or agents
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlements actually and reasonably incurred by each in connection
with any action, suit or proceeding brought by third parties by reason of the
fact that they were or are directors, officers, employees or agents of the
corporation, if such directors, officers, employees or agents acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reason to believe their conduct was unlawful. In a
derivative action, i.e., one by or in the right of the corporation,
indemnification may be made only for expenses (including attorneys' fees)
actually and reasonably incurred by directors, officers, employees or agents
in connection with the defense or settlement of an action or suit, and only
with respect to a matter as to which they shall have acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and
only to the extent that the court in which the action or suit was brought
shall determine upon application that the defendant directors, officers,
employees or agents are fairly and reasonably entitled to indemnity for such
expenses despite such adjudication of liability.

The Registrant has entered into indemnification agreements with its
directors and certain key officers pursuant to which the Registrant is
generally obligated to indemnify its directors and such officers to the full
extent permitted by the DGCL as described above.

The Registrant has purchased insurance for its directors and officers
indemnifying them against certain civil liabilities, including liabilities
under the federal securities laws, which might be incurred by them in such
capacity.

II-1

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The information in this Item 15 gives effect to a 100-for-1 split of the
Common Stock effected on December 29, 1997 and a 3.72-for-1 split of the
Common Stock effected on February 23, 1998.

Since its incorporation in July 1997, the Registrant has issued and sold the
following unregistered securities the purchasers of which were all accredited
investors:

(1) In August 1997, in connection with its formation, the Company issued
930,000 shares of Common Stock to each of Mark McKinney and Ross Berner for
aggregate cash consideration of $50,000.

(2) In November 1997, pursuant to a Stock Purchase and Restriction
Agreement between the Company and Edward T. Sheehan, the Company issued
744,000 shares of Common Stock to Mr. Sheehan for cash consideration of
$20,000.

(3) In January 1998, the Company issued an aggregate of 218,736 shares of
Common Stock to private investors for cash consideration of $735,000. Such
shares were issued pursuant to Subscription Agreements between the Company
and each of the investors.

(4) On May 6, 1998, the Company issued an aggregate of 2,375,741 shares
of Common Stock in connection with its acquisitions of Northland Auto
Transporters, Inc., Northland Fleet Leasing, Inc., Falcon Towing and Auto
Delivery, Inc., Smith Christensen Enterprises, Inc., Caron Auto Works,
Inc., Caron Auto Brokers, Inc., Absolute Towing and Transporting, Inc., ASC
Transportation Services, and Silver State Tow & Recovery, Inc.

(5) On June 12, 1998, the Company issued an aggregate of 212,023 shares
of Common Stock in connection with its acquisition of 5L Corporation and
ADP Transport, Inc.

(6) On June 16, 1998, the Company issued a warrant to purchase 117,789
shares of Common Stock at $13.00 per share to Bank of America National
Trust and Savings Association, in connection with the credit facility. The
warrant expires on June 16, 2003.

(7) On June 22, 1998, the Company issued an aggregate of 93,902 shares of
Common Stock in connection with its acquisition of D&M Auto Towing, Inc.

(8) On June 29, 1998, the Company issued an aggregate of 35,956 shares of
Common Stock in connection with its acquisition of Rouse's Body Shop, Inc.

(9) On June 30, 1998, the Company issued an aggregate of 22,023 shares of
Common Stock in connection with its acquisition of Northshore Towing, Inc.,
Northshore Recycling Inc. and Evanston Reliable Maintenance, Inc.

(10) On July 1, 1998, the Company issued an aggregate of 29,778 shares of
Common Stock in connection with its acquisition of Bill and Wags, Inc.

(11) On July 1, 1998, the Company issued an aggregate of 125,000 shares
of Common Stock in connection with its acquisition of Schroeder Auto
Carriers, Inc.

(12) On July 2, 1998, the Company issued an aggregate of 144,785 shares
of Common Stock in connection with its acquisitions of PBM, Inc. and Alert
Auto Transport.

(13) On July 2, 1998, the Company issued an aggregate of 24,757 shares of
Common Stock in connection with its acquisition of West Nashville Wrecker
Service, Inc.

(14) On July 14, 1998, the Company issued an aggregate of 36,657 shares
of Common Stock in connection with its acquisition of AAAmazing, Inc.

(15) On July 20, 1998, the Company issued an aggregate of 99,602 shares
of Common Stock in connection with its acquisition of Healey Automotive,
Inc.

II-2

(16) On July 21, 1998, the Company issued an aggregate of 17,735 shares
of Common Stock in connection with its acquisition of Sid's Wrecker
Service, Inc.

(17) On July 22, 1998, the Company issued an aggregate of 113,208 shares
of Common Stock in connection with its acquisition of Patrick K. Willis and
Company, Inc.

(18) On July 31, 1998, the Company issued an aggregate of 9,724 shares of
Common Stock in connection with its acquisition of Kirk's Sineath Motor
Company, Inc.

(19) On August 3, 1998, the Company issued an aggregate of 29,148 shares
of Common Stock in connection with its acquisition of Better All Auto
Transport, Inc.

(20) On August 6, 1998, the Company issued an aggregate of 91,116 shares
of Common Stock in connection with its acquisition of El Paso Towing, Inc.

(21) On August 7, 1998, the Company issued an aggregate of 377,624 shares
of Common Stock in connection with its acquisition of Keystone Towing, Inc.

(22) On August 14, 1998, the Company issued an aggregate of 23,480 shares
of Common Stock in connection with its acquisition of A&B Towing, Inc.

(23) On August 21, 1998, the Company issued an aggregate of 173,498
shares of Common Stock in connection with its acquisition of Environmental
Auto Removal, Inc.

(24) On August 26, 1998, the Company issued an aggregate of 9,424 shares
of Common Stock in connection with its acquisition of Arri Brothers, Inc.

(25) On September 8, 1998, the Company issued an aggregate of 39,467
shares of Common Stock in connection with its acquisition of 1113
Enterprises, Inc. d/b/a Central Service Center and T.J. West, Inc.

(26) On October 14, 1998, the Company issued an aggregate of 41,346
shares of Common Stock in connection with its acquisition of Freeman's
Transporting, Inc.

(27) On December 7, 1998, the Company issued $43,5000,000 aggregate
principal amount of its 8% Convertible Subordinated Notes due 2008 to
Charter URS LLC, pursuant to the Purchase Agreement, dated as of November
19, 1998, between the Company and Charter URS LLC.

The sales of the above securities were deemed to be exempt from registration
under the Securities Act in reliance on Section 4(2) of the Securities Act or
Regulation D promulgated thereunder as transactions by an issuer not involving
a public offering. The recipients of securities in each such transaction
represented their intention to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof and
appropriate legends were attached to the share certificates issued in such
transactions.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(A) EXHIBITS

NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------

2.1 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Northland Auto Transporters, Inc. and the
Stockholder named therein (incorporated by reference to the same-
numbered Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 333-46925)).
2.2 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Northland Fleet Leasing, Inc. and the
Stockholder named therein (incorporated by reference to the same-
numbered Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 333-46925)).
2.3 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Falcon Towing and Auto Delivery, Inc. and the
Stockholder named therein (incorporated by reference to the same-
numbered Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 333-46925)).

II-3

NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------

2.4 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Smith-Christensen Enterprises, Inc. and City
Towing, Inc. and the Stockholders named therein (incorporated by
reference to the same-numbered Exhibit to the Company's Registration
Statement on Form S-1 (Registration No. 333-46925)).
2.5 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Caron Auto Works, Inc. and the Stockholders
named therein (incorporated by reference to the same-numbered Exhibit
to the Company's Registration Statement on Form S-1 (Registration No.
333-46925)).
2.6 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Caron Auto Brokers, Inc. and the Stockholder
named therein (incorporated by reference to the same-numbered Exhibit
to the Company's Registration Statement on Form S-1 (Registration No.
333-46925)).
2.7 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Absolute Towing and Transporting, Inc. and the
Stockholder named therein (incorporated by reference to the same-
numbered Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 333-46925)).
2.8 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Keystone Towing, Inc. and the Stockholder named
therein (incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
2.9 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, ASC Transportation Services, Auto Service Center
and the Stockholders named therein (incorporated by reference to the
same-numbered Exhibit to the Company's Registration Statement on Form
S-1 (Registration No. 333-46925)).
2.10 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Silver State Tow & Recovery, Inc. and the
Stockholders named therein (incorporated by reference to the same-
numbered Exhibit to the Company's Registration Statement on Form S-1
(Registration
No. 333-46925)).
2.11 Form of Amendment Number One to Agreement and Plan of Reorganization
dated as of February 23, 1998, by and among the Company, Keystone
Towing, Inc. and the Stockholder named therein (incorporated by
reference to the same-numbered Exhibit to Amendment No. 3 to the
Company's Form S-1 Registration Statement (Registration No. 333-
46925)).

2.12 Stock Purchase Agreement, dated as of August 21, 1998, by and among the
Company, E & R Towing and Garage, Inc., Gerald J. Corcoran, Edward V.
Corcoran, Edward V. Corcoran, Jr. and David Corcoran (incorporated by
reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
filed September 1, 1998).
2.13 Stock Purchase Agreement, dated as of August 21, 1998, by and among the
Company, Environmental Auto Removal, Inc., Gerald J. Corcoran and
Edward V. Corcoran (incorporated by reference to Exhibit 2.2 to the
Company's Current Report on Form 8-K filed September 1, 1998).
2.14 Merger Agreement, dated November 5, 1998, by and among the Company, URS
Transport, Inc., Pilot Transport, Inc. and the Shareholders named
therein (incorporated by reference to Exhibit 2.1 to the Company's
Current Report on Form 8-K, dated December 9, 1998).
2.15 First Amendment to Merger Agreement, dated December 2, 1998, by and
among the Company, URS Transport, Inc., Pilot Transport, Inc. and the
Shareholders named therein (incorporated by reference to Exhibit 2.2 to
the Company's Current Report on Form 8-K, dated December 9, 1998).
3.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).

II-4

NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------

3.2 Amended and Restated Bylaws of the Company (incorporated by reference
to the same-numbered Exhibit to the Company's Registration Statement on
Form S-1 (Registration No. 333-46925)).
4.1 Specimen Common Stock Certificate (incorporated by reference to the
same-numbered Exhibit to Amendment No. 3 to the Company's Form S-1
Registration Statement (Registration No. 333-46925)).
4.2 Form of 8% Convertible Subordinated Debenture due 2008 (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form 8-K,
dated November 19, 1998).
5.1 Opinion of McDermott, Will & Emery, as to the validity of the issuance
of the securities registered hereby (previously filed).
10.1 United Road Services, Inc. 1998 Stock Option Plan (incorporated by
reference to the same-numbered Exhibit to the Company's Registration
Statement on Form S-1 (Registration No. 333-46925)).
10.2 Stock Purchase and Restriction Agreement between the Company and Edward
Sheehan (incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
10.3 Executive Employment Agreement between the Company and Edward T.
Sheehan (incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
10.4 Resignation letter from Mark McKinney in favor of the Company
(incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
56603)).
10.5 Resignation letter from Ross Berner in favor of the Company
(incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
56603)).
10.6 Executive Employment Agreement between the Company and Allan D. Pass
(incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
10.7 Executive Employment Agreement between the Company and Donald J. Marr
(incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
10.8 Employment Agreement between the Company and Edward Morawski
(incorporated by reference to the same-numbered Exhibit to Amendment
No. 1 to the Company's Form S-1 Registration Statement (Registration
No. 333-46925)).
10.9 Consulting Agreement between the Company and Todd Q. Smart
(incorporated by reference to the same-numbered Exhibit to Amendment
No. 1 to the Company's Form S-1 Registration Statement (Registration
No. 333-46925)).
10.10 Credit Agreement dated as of May 8, 1998 among United Road Services,
Inc., various financial institutions and Bank of America National Trust
and Savings Association, as Agent (incorporated by reference to the
same-numbered Exhibit to the Company's Registration Statement on Form
S-1 (Registration No. 333-56603)).
10.11 Amended and Restated Executive Employment Agreement, dated as of May 1,
1998, between the Company and Donald J. Marr (incorporated by reference
to the same-numbered Exhibit to the Company's Registration Statement on
Form S-1 (Registration No. 333-56603)).
10.12 [Reserved]
10.13 Form of Registration Rights Agreement between the Company and
Stockholders named therein (incorporated by reference to the same-
number Exhibit to Amendment No. 1 to the Company's Form S-1
Registration Statement (Registration No. 333-46925)).
10.14 Form of Indemnification Agreement between the Company and each of the
Company's executive officers and directors (incorporated by reference
to the same-numbered Exhibit to Amendment No. 2 to the Company's Form
S-1 Registration Statement Registration No. 333-46925)).

II-5

NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------

10.15 Lease between the Company and Edward Morawski (incorporated by
reference to the same-numbered Exhibit to Amendment No. 1 to the
Company's Form S-1 Registration Statement (Registration
No. 333-46925)).
10.16 Consulting Agreement, dated as of May 7, 1998, by and between the
Company and Mark J. Henninger (previously filed).
10.17 Employment Agreement, dated as of June 1, 1998, between the Company and
Robert Joseph Adams, Jr. (incorporated by reference to Exhibit 10.7 to
the Company's Quarterly Report on Form 10-Q for the period ended June
30, 1998).
10.18 First Amendment to Credit Agreement, dated as of June 26, 1998, by and
among the Company, various financial institutions and Bank of America
National Trust and Savings Association, as Agent (incorporated by
reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-
Q for the period ended June 30, 1998).
10.19 Second Amendment to Credit Agreement, dated as of July 15, 1998, by and
among the Company, various financial institutions and Bank of America
National Trust and Savings Association, as Agent (incorporated by
reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-
Q for the period ended June 30, 1998).
10.20 Third Amendment to Credit Agreement, dated as of September 30, 1998, by
and among the Company, various financial institutions and Bank of
America National Trust and Savings Association, as Agent (previously
filed).
10.21 Stock Purchase Warrant, dated as of June 16, 1998, issued by the
Company to Bank of America National Trust and Savings Association
(previously filed).
10.22 Amended and Restated Credit Agreement, dated as of November 2, 1998, by
and among the Company, various financial institutions, BankBoston,
N.A., as Documentation Agent and Bank of America National Trust and
Savings Association, as Agent (filed herewith).
10.23 First Amendment to Amended and Restated Credit Agreement, dated as of
December 4, 1998, by and among the Company, various financial
institutions, BankBoston, N.A., as Documentation Agent and Bank of
America National Trust and Savings Association, as Agent (filed
herewith).
10.24 Purchase Agreement, dated as of November 19, 1998, by and between
Charter URS LLC and the Company (incorporated by reference to Exhibit
99.1 to the Company's Current Report on Form 8-K, dated November 19,
1998).
10.25 Registration Rights Agreement, dated as of November 19, 1998, by and
between Charter URS LLC and the Company (incorporated by reference to
Exhibit 99.2 to the Company's Current Report on Form 8-K, dated
November 19, 1998).
10.26 Investors Agreement, dated as of November 19, 1998, by and between
Charter URS LLC and the Company (incorporated by reference to Exhibit
99.3 to the Company's Current Report on Form 8-K, dated November 19,
1998).
10.27 Merger Agreement dated as of November 12, 1998, by and among the
Company, URS Transport, Inc., MPG Transco, Ltd., Michael A. Wysocki,
Patrick M. Riley and Gary R. Sienkiewicz (filed herewith).
21.1 Subsidiaries of the Registrant (filed herewith).
24.1 Consent of McDermott, Will & Emery (included in Exhibit 5.1).
24.2 Consent of KPMG LLP (filed herewith).

- --------

(B) FINANCIAL STATEMENT SCHEDULES

All schedules are omitted because they are inapplicable or the requested
information is shown in the financial statements of the registrant or related
notes thereto.

II-6

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Albany, State of
New York, on the 5th day of January, 1999.

United Road Services, Inc.

By: /s/ Edward T. Sheehan
----------------------------------
EDWARD T. SHEEHAN
CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER
AND SECRETARY

KNOW ALL PERSONS BY THESE PRESENTS, that each of Messrs. Halpern and Berner,
whose signature appears below, constitutes and appoints Edward T. Sheehan and
Allan D. Pass and each of them, as his true and lawful attorneys-in-fact and
agents, with full power of substitution for him in any and all capacities, to
sign any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 1 has been signed on January 5, 1999 by the following
persons in the capacities indicated.

SIGNATURE TITLE

/s/ Edward T. Sheehan Chairman of the Board
- ------------------------ Chief Executive Officer,
EDWARD T. SHEEHAN and Secretary (Principal Executive Officer)
and Director

/s/ Donald J. Marr Senior Vice President and Chief Financial
- ------------------------ Officer (Principal Financial and Accounting
DONALD J. MARR Officer)

/s/ Grace M. Hawkins* Director
- ------------------------
GRACE M. HAWKINS

/s/ Donald F. Director
Moorehead, Jr.*
- ------------------------
DONALD F. MOOREHEAD,
JR.

/s/ Edward W. Morawski* Director
- ------------------------
EDWARD W. MORAWSKI

/s/ Todd Q. Smart* Director
- ------------------------
TODD Q. SMART

/s/ Richard A.
Molyneux*
- ------------------------
RICHARD A. MOLYNEUX Director

/s/ Mark J. Henninger*
- ------------------------
MARK J. HENNINGER Director

Director
- ------------------------
MERRIL M. HALPERN

/s/ Robert L. Berner, Director
III
- ------------------------
ROBERT L. BERNER, III

/s/ Edward T. Sheenan

*By:_______________
EDWARD T. SHEENAN
ATTORNEY-IN-FACT

II-8