UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- - - - - - - - - - - - - - - - -
FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For The Fiscal Year Ended March 31, 2001
OR

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

FOR THE TRANSITION PERIOD FROM __________ TO __________

Commission File Number 333-64513
AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 65-0822351
(State or other jurisdiction of (I.R.S. Employer
incorporation organization) Identification Number)

1815 GRIFFIN ROAD, SUITE #300, DANIA, FL 33004-2252
(Address of principal executive offices and zip code)

Registrant's telephone number, including area code: (954) 926-2000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) AND 12(g) OF THE ACT: NONE

TITLE OF CLASS NAME OF EXCHANGE ON WHICH REGISTERED
N/A N/A

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date.

Common Stock, par value $0.01 per share: 100 shares outstanding at June
29, 2001.

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.

FORM 10-K

TABLE OF CONTENTS

Page

PART I

ITEM 1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ITEM 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ITEM 3 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ITEM 4 Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . 8

PART II

ITEM 5 Market for the Company's Equity and Related Security Holder Matters. . . . . . . . . 9
ITEM 6 Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operation 10
ITEM 7 A Quantitative and Qualitative Disclosure about Market Risk. . . . . . . . . . . . . . 19
ITEM 8 Financial Statements and Supplementary Data. . . . . . . . . . . . . . . . . . . . . 19
ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 19

PART III

ITEM 10 Directors and Executive Officers of the Company. . . . . . . . . . . . . . . . . . . 19
ITEM 11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ITEM 12 Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . 27
ITEM 13 Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . 29

PART IV

ITEM 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K. . . . . . . . . . . 35
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

PART I

Aircraft Service International Group, Inc. (the "Company") was organized in
March 1998 for the purpose of acquiring beneficial ownership and control of all
the outstanding capital stock or other equity interests in Aircraft Services
International, Inc., ASIG Miami, Inc. (previously known as Dispatch Service,
Inc.), ASIG Fueling Miami, Inc. (previously known as Florida Aviation Fueling
Co.), Bahamas Airport Service, Ltd., Freeport Flight Services, Ltd., ASIG Ltd.
(previously known as Aircraft Service, Ltd.), ASIG Germany GmbH (previously
known as ASII Holding, GmbH), and ASII Aircraft Service Canada, Ltd.
(collectively the "ASIG business" or "Predecessor") from Viad Corp ("Viad") and
Viad Service Companies, Ltd. as of April 1, 1998 pursuant to a share purchase
agreement (the "Acquisition"). Prior to the Acquisition by the Company, the ASIG
business was operated under the divisional name of Aircraft Service
International Group. The Company is 100% owned by Ranger Aerospace Corporation.

The Predecessor's fiscal year ended on December 31. The Company's fiscal
year ends March 31. References herein to fiscal 2001, 2000 and 1999 refer to the
Company's fiscal year ended March 31, 2001, 2000 and 1999 and references to the
calendar year 1997 refer to the Predecessor's fiscal year ended December 31,
1997.

Item 1. Business

The Company is one of the largest independent providers of aviation fueling
and aircraft ground services in the United States and believes it is the largest
independent fueler in Europe. The Company has provided service to its customers
for 54 years and has a presence in 50 airports in the United States, Europe and
the Caribbean. In fiscal 2001, the Company provided service to over 2.8 million
commercial flights for over 200 customers, including most of the major domestic
and international airlines such as American Airlines, Inc. ("American"), British
Airways ("BA"), Continental Airlines, Inc. ("Continental"), Delta Air Lines,
Inc. ("Delta"), Northwest Airlines Corporation ("Northwest"), United Airlines,
Inc. ("United") and US Airways, Inc. ("US Airways"), as well as regional air
carriers, airport authorities and oil companies such as Esso U.K. ("Esso") and
Shell U.K. ("Shell"). The Company also operates fuel storage and delivery
systems for airline consortia and airport authorities at 22 airports, including
Los Angeles International Airport's LAXFUEL, which the Company believes is the
largest airport fuel consortium in the world. For the fiscal years ended March
31, 2001, March 31, 2000 and March 31, 1999, the Company generated revenues of
$162.0 million, $141.0 million and $123.4 million, respectively, net income
(loss) of $(7.8) million, $(9.3) million and $(4.8) million (after an
extraordinary charge of $0.2 million relating to the write-off of certain
finance costs), respectively, and EBITDA of $14.7 million, $11.4 million and
$15.5 million, respectively.

The Company's business includes aviation fueling services (62.9% of 2001
revenues), aircraft ground services (33.8%) and other aviation services (3.3%).
Aviation fueling services are comprised primarily of into-plane fueling,
maintenance and operation of fuel storage and delivery systems and the retail
sale of fuel products. Generally, the Company has custody over, but not
ownership of, the fuel it manages and delivers. Aircraft ground services consist
primarily of ground handling, aircraft interior grooming, cargo handling,
passenger and traffic services and fixed base operations ("FBOs"). FBOs
generally include the provision of terminal services, pilot facilities,
maintenance, weather service, flight planning and hangar space to private,
executive and corporate aircraft. The Company provides its services to customers
pursuant to contractual agreements and currently has approximately 850 such
contracts. In addition, the Company has won approximately 55%, 57% and 68% of
the new contracts on which it placed competitive bids in fiscal 2001, fiscal
2000 and fiscal 1999, respectively.

The Company believes it has a significant market share of into-plane
fueling services (based on gallons pumped) at many of its locations, handling an
estimated 50% or more of the outsourced commercial fueling requirements at 27 of
the 36 locations where it provides such services. The Company handled
approximately 9.5 billion gallons of aviation fuel through all of its combined
business units during fiscal 2001.

In April 1999, the Company was named "Best Aviation Fueler in the World"
by an international survey of 41 major airlines, independently conducted by the
"World Jet Fuel Report", an industry publication.

In October 1999, AVITAS, an aviation consulting firm, performed an
independent survey of the Company and its principal competitors, through a blind
assessment among 700 senior executives in the airlines industry. ASIG was
ranked Number 1 in quality in that survey.

In 2000, the Company was named "Best Airport Customer Service Cabin
Services and Underwing Supplier" and "Best Full Service Station" (Ft. Lauderdale
Airport) by Delta Airlines. The Company was also awarded the "Platinum Supplier
Award" from American Airlines.

In 2001, the Company was named by American Airlines for the second year in
a row a "Supplier Excellence 2000(R) Platinum Supplier" and also a "Best in
Class" supplier for the third year in a row. ASIG was named "Fuel Supplier of
the Year" by Delta Airlines for the second consecutive year.

Company History

Prior to April 1, 1998, the Company had no operations. The ASIG business
has a long history of providing service in the independent aviation services
market with its two main predecessor companies, ASIG Miami Inc. ("Miami"), which
was formerly known as Dispatch Services, Inc. and Aircraft Service
International, Inc. ("ASII") operating since 1947 and 1952, respectively. Most
of the companies comprising the ASIG business were acquired by the Greyhound
Corporation (Viad's predecessor) in the late 1960s.

On May 20, 1999, ASIG Ground Services, Inc. (formerly Elsinore Acquisition
Corporation), a wholly-owned subsidiary of the Company, acquired substantially
all the assets of Elsinore, L.P., including Elsinore's 23 operating units in 10
states, the U.S. Virgin Islands and Puerto Rico, which provide a variety of
aircraft fueling, ground handling, aircraft cleaning and other aviation services
to major commercial airlines. On March 1, 2000, ASIG UK purchased 75% of the
stock of Aviation Consultancy Services, a baggage tracing provider. The Company
also received an option to purchase the remaining 25% of the stock which the
Company exercised on June 12, 2000.

The following chart lists the 48 airports in the United States, Europe and
the Caribbean where the Company currently provides services:

OPERATING OPERATING
LOCATION SINCE LOCATION SINCE
- ------------------------ --------- ----------------------- -----

Miami, FL 1947 Denver, CO 1993
Tampa, FL 1957 Philadelphia, PA 1993
Ft. Lauderdale, FL 1958 Atlanta, GA 1994
Los Angeles, CA 1961 London, England-Gatwick 1997
Orlando, FL 1961 Munich, Germany 1997
San Francisco, CA 1961 Austin, TX 1999
West Palm Beach, FL 1962 Washington, DC 1999
Melbourne, FL 1963 Aberdeen, Scotland 1999
Memphis, TN 1963 Manchester, England 1999
Freeport, Bahamas 1969 Birmingham, England 1999
Cincinnati, OH 1969 Luton, England 1999
Nashville, TN 1969 Billings, MT 1999
New Orleans, LA 1971 Bozeman, MT 1999
Sarasota, FL 1973 Kalispell, MT 1999
Pittsburgh, PA 1983 Great Falls, MT 1999
Fairbanks, AK 1985 Helena, MT 1999
Albuquerque, NM 1987 Lincoln, NE 1999
Burbank, CA 1987 Missoula, MT 1999
Portland, OR 1987 Sacramento, CA 1999
Seattle, WA 1987 Tucson, AZ 1999
San Diego, CA 1988 St. Thomas, VI 1999

OPERATING OPERATING
LOCATION SINCE LOCATION SINCE
- ------------------------ --------- ----------------------- -----
London, England-Heathrow 1990 San Juan, PR 1999
Costa Mesa/Santa Ana, CA 1991 Nassau, Bahamas 1999
Cleveland, OH 1992 Detroit, MI 2000

Industry Overview

Independent aviation services include the aviation fueling and aircraft
ground services provided by the Company as well as other aviation services,
including food service, aircraft maintenance and avionics supplies. The demand
for independent aviation services depends on both the amount of airline traffic
and the extent to which airlines outsource the provision of these services.
Based on airport traffic figures, its own market experience and estimates of
revenue received for services rendered per plane, the Company believes that
approximately 90% of the total commercial aviation fueling market and
approximately 30% of the total commercial ground services market are outsourced
by airlines to independent providers such as the Company and that, as a result,
the aggregate independent markets for fueling services and ground services at
the top 100 North American airports are approximately $300 million and $1.9
billion, respectively.

The independent aviation services industry is highly fragmented in both the
United States and Europe and is characterized by many operators that provide
services at a single or small number of locations. Small operators are likely to
face significant competitive pressures as large airlines increasingly deal with
fewer and larger suppliers providing a broader range of services at multiple
locations. This trend should encourage the consolidation of the industry and
enable suppliers to capitalize on economies of scale. For these reasons, the
Company believes that industry consolidation will provide opportunities for
growth in addition to the growth resulting from increases in airline traffic and
outsourcing.

Operations

Aviation Fueling Services

The Company provides fueling services at 18 of the top 50 North American
airports (as ranked by Airports Council International in terms of total aircraft
movements), including Atlanta, Los Angeles, Miami, Denver, Philadelphia,
Pittsburgh and San Francisco. Generally, the Company has custody over, but not
ownership of, the fuel it manages and delivers, and thus has limited direct
exposure to fluctuations in fuel prices. In fiscal 2001, the Company's aviation
fueling services accounted for 62.9% of its revenue.

Into-Plane Fueling Services: Into-plane fueling services provided $77.4
------------------------------
million, $71.7 million and $60.7 million of the Company's revenue in fiscal
2001, 2000 and 1999, respectively. The Company provides into-plane fueling at 36
locations, including major hub airports as well as smaller sites, and in fiscal
2001 delivered fuel to more than 2.5 million flights.

Major hub airports where the Company operates include Atlanta, Cincinnati,
London (Heathrow and Gatwick), Los Angeles, Memphis, Miami, Munich, Orlando,
Philadelphia, Pittsburgh, San Francisco, Salt Lake City, Dallas-Fort Worth and
Seattle. At Atlanta Hartsfield International Airport, the Company operates what
it believes is the single largest into-plane fueling contract in the world. At
Pittsburgh International Airport, the Company provides into-plane fueling for
all US Airways flights daily. In 1990, the Company won the into-plane fueling
contract for British Airways at the London-Heathrow airport through a
competitive bid process and currently supplies fuel to all British Airways
flights daily. In May 1997, a subsidiary of the Company, won the contract to
maintain and operate the Munich airport owned fuel systems as well as one of two
into-plane fuel service licenses. In June 1997, pursuant to an agreement with
Esso, the Company began providing into-plane fueling to British Airways and
other airlines at the London-Gatwick airport.

Fuel System Maintenance and Operations: Fuel system maintenance and
------------------------------------------
operations generated revenue of $14.0 million, $11.4 million and $9.8 million in
fiscal 2001, 2000 and 1999, respectively.

The Company maintains and operates fuel storage and delivery systems for
airline consortia, oil company consortia, individual airlines or local airport
authorities in 23 locations, including Los Angeles, Cincinnati, Denver, Ft.
Lauderdale, Memphis, Miami, Philadelphia, Pittsburgh and Tampa. In addition, the
Company owns and operates six fuel storage and delivery systems in Albuquerque,
Melbourne, New Orleans, Orlando, Sarasota and West Palm Beach.

The Company's largest fuel system is LAXFUEL in Los Angeles, which the
Company believes is the largest airport fuel consortium in the world. Currently
comprised of 58 domestic and international airlines, LAXFUEL is operated on a
24-hour basis, receiving fuel from more than 17 suppliers and processing
approximately 1,000 fuel accounting transactions each day. In fiscal 2001, the
Company managed monthly volume at LAXFUEL of approximately 150 million gallons.
The Company first won this contract in 1986 and recently managed a $85 million
upgrade of the fuel system. Since the original contract award, the Company has
won two additional contracts from LAXFUEL.

Other Aviation Services: In addition to the other services discussed the
-------------------------
Company sells aviation fuel to retail customers.

Aircraft Ground Services

In fiscal 2001, the Company's aircraft ground services accounted for 33.8%
of revenue.

Ground Handling: Ground handling services generated revenue of $38.3
----------------
million, $34.9 million and $18.8 million in fiscal 2001, 2000 and 1999,
respectively. The Company provides ground handling services to over 100 domestic
and international airlines at 27 locations and is capable of servicing any size
aircraft, from commuter planes to wide-body Boeing 747s. The Company's largest
ground handling operation is at Miami International Airport where the Company
and its predecessors have been providing ground handling services since 1947.
The Company has over 600 employees servicing 86 airlines and approximately 2,500
flights per month at Miami International Airport. The Company also operates and
maintains the computerized baggage system for the entire "B" and "F" concourses
and handles the Federal Inspection Service baggage distribution for all
international carriers at the airport.

Aircraft Interior Grooming: Aircraft interior grooming generated revenue
---------------------------
of $1.2 million, $4.0 million and $15.4 million in fiscal 2001, 2000 and 1999,
respectively. The Company provides aircraft interior grooming services at 34
locations and has the capability to expand these services throughout the
Company's entire network. This decrease in fiscal 2001 is due to the loss of
the Company's contract with Delta Airlines at several ASIG Ground Services, Inc,
locations. The decrease in fiscal 2000 is due to the loss of the Company's
contract with British Airways' for grooming at Heathrow. This contract
generated $9.8 million in revenues and $2.2 million in EBITDA in fiscal 1999.

Cargo Handling: The Company provides cargo-handling services primarily in
---------------
conjunction with its ground handling operations. The Company handles both
domestic and international cargo as well as specialized cargo and hazardous
shipments.

Other Ground Services: The Company also provides certain airline customers
---------------------
at its Ft. Lauderdale, Miami, Orlando and Tampa locations with passenger
handling services, and from time to time provides such services to charter
airline customers in Albuquerque and Pittsburgh. The Company often fulfills its
customers' particular needs by providing specialized staff who may be
multilingual or trained for specific tasks.

In addition, the Company provides certain airline customers in Miami and
Orlando with flight operations and load control, including communications,
flight dispatch, weight and balance information, flight planning, weather
service and diplomatic clearances. The Company operates limited FBOs in
Albuquerque, Freeport, Bahamas and Orlando, where it provides terminal services,
pilot facilities, line maintenance, worldwide weather service, flight planning
and hanger space for private, executive and corporate aircraft. The Company also
operates United's VIP lounge at the London-Heathrow airport.

Customers

The Company's customer base is comprised of airlines, airport authorities
and oil companies. The Company currently has customer relationships with most of
the major domestic and international airlines, including American, British
Airways, Continental, Delta, Northwest, United and US Airways, as well as many
regional and smaller carriers. The Company also has customer relationships with
many leading airport authorities and oil companies.

In fiscal 2001, the Company's two largest customers, Delta and Northwest,
accounted for approximately 18.7% and 6.7% of revenue, respectively, and the
Company's top ten customers accounted for approximately 49.1% of revenue.

Sales and Marketing

The Company's sales and marketing staff is comprised of five professionals
who average over 10 years of experience with the Company. All sales personnel
are compensated through salary plus an incentive bonus based on the Company's
overall performance.

The Company markets its services through a combination of customer visits,
membership in trade organizations, participation in International Air
Transportation Association and National Air Transportation Association trade
shows and seminars, and sponsorship of events at annual meetings of consortia
that own major fuel storage and delivery systems. Informational marketing also
takes place on a daily basis through interaction with the Company's customers at
all levels of their respective organizations.

The Company wins the majority of its new business through the competitive
bid process. The Company has won approximately 55%, 57% and 68% of the new
contracts on which it placed competitive bids in fiscal 2001, 2000 and 1999,
respectively. The Company currently has approximately 850 contracts. In fiscal
2001, the Company's largest contract accounted for 5.1% of revenue, and no other
contract accounted for more than 2.5% of revenue. The majority of the Company's
contracts have an industry standard initial term of one year, although the
Company's larger contracts generally run for initial terms of three to five
years.

The Company also pursues periodic efforts to acquire other companies and
establish or expand joint ventures as part of its business development effort.
The acquisition of ASIG Ground Services, Inc. (formerly Elsinore) and the ESSO
joint venture are examples of these activities.

Competition

The aircraft services industry is highly fragmented, consisting of a
limited number of well-capitalized companies, which offer a broad range of
services, a large number of smaller, specialized companies and subsidiaries
established by major airlines to provide certain services. The Company's major
competitors include Airport Group International Inc., World Wide Flight
Services, DynAir, Hudson General Corporation, Mercury Air Group, Inc., Ogden
Aviation Services Inc. and Signature Flight Support Corp. The Company believes
that the principal competitive factors in the aviation services industry are
quality, safety, turnaround time, overall customer service, technical
capabilities of personnel and price.

Environmental

The Company is subject to compliance obligations and liabilities imposed
pursuant to federal, state, local and foreign environmental and workplace health
and safety requirements, including The Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"). In particular, the Company's
aircraft fuel handling operations are subject to liabilities and obligations
relating to the aboveground and underground storage of, and the release and
cleanup of, petroleum products. The Company monitors its environmental
responsibilities. Despite such efforts, the possibility exists that
noncompliance could occur or be identified in the future, the penalties or
corrective action costs associated with such could be material. In addition,

requirements are complex, change frequently, and tend to become more stringent
over time. There can be no assurance that these requirements will not change in
the future in a manner that could materially and adversely affect the Company.

The Company is currently conducting or funding, or expects to conduct or
fund, environmental investigations, monitoring and cleanups at certain of its
previously or currently operated facilities. At certain facilities at which the
Company provides into-plane fueling services or maintains and operates a fuel
storage and delivery system, environmental remedial costs have been borne by the
owners of airport fueling systems rather than the Company. In addition, the
Company has in place other legal arrangements (e.g., contractual indemnities,
insurance policies, allocation agreements and state funding mechanisms for
cleanup of pollution from storage tanks) which it believes significantly
mitigate the foregoing liabilities. However, the Company cannot guarantee that
the state programs will continue to have funds available for the cleanup of tank
sites. In the event that these or other legal arrangements fail, the Company
could bear direct liability for the foregoing or any future matters and such
liability could be material. In addition, there can be no assurance that future
environmental investigations by the Company will not identify other
environmental conditions requiring material expenditures of funds.

From time to time, the Company receives notices of potential liability,
pursuant to CERCLA or analogous state laws, for cleanup costs associated with
offsite waste recycling or disposal facilities at which wastes associated with
its operations have allegedly come to be located. Liability under CERCLA is
strict, retroactive, and joint and several, although such liability is often
allocated among multiple responsible parties. In the past several years, such
notices have been received for the Peak Oil site in Tampa, Florida; the South
Eighth Street Landfill site in West Memphis, Arkansas; the Wingate Road site in
Ft. Lauderdale, Florida; and the Petroleum Products Corporation site in Pembroke
Pines, Florida. With respect to all such sites, the Company either has settled
its liability (Peak Oil), expects its liability to be de minimis and fully
indemnified by Viad (South Eighth Street), or has denied liability altogether
(Wingate Road and Petroleum Products). The possibility exists that the Company
will receive additional notices of CERCLA-type liability in the future. In light
of the relatively small volume of waste typically contributed by the Company,
the applicability of the CERCLA "petroleum exemption" to certain of its wastes,
the large numbers of parties typically involved in such sites, and the
availability of contractual indemnifications, although there can be no assurance
in this regard, the Company currently expects that its future liabilities for
cleanup of offsite disposal facilities will not be material.

Subject to certain time and dollar limitations, Viad has agreed to
indemnify the Company with respect to certain pre-Acquisition environmental
liabilities, including all known and unknown onsite and offsite contamination
matters. Based upon its environmental due diligence investigation, the Company
believes that such indemnification, coupled with the legal arrangements set
forth above, provide sufficient protection with respect to environmental
liabilities. In the event that Viad fails to honor this indemnification, the
Company could bear direct liability for such matters and such liability could be
material.

Employees

As of March 31, 2001, the Company employed 3,777 people. Approximately
61.0% of the Company's employees are represented by labor unions. There are
currently approximately 34 collective bargaining contracts (among 7 separate
union entities) in place, almost all of which have terms of three years.
Contract expirations are staggered with approximately one-third coming up for
renewal each year. The Company believes that it has had good relations with the
several unions representing its employees.

Information about geographic revenues, operating profits and identifiable
assets attributable to each of the Company's geographic areas is reported in the
footnotes to the financial statements. See Note 15 in the Notes to Consolidated
Financial Statements.

Item 2. Properties

The Company's principal corporate offices are located adjacent to the Fort
Lauderdale International Airport in Broward County, Florida. The Company's
operating facilities are in:

Albuquerque, NM Melbourne, FL
Aberdeen, Scotland Memphis, TN
Atlanta, GA Miami, FL
Austin, TX Missoula, MT
Belgrade, MT Munich, Germany
Billings, MT Nashville, TN
Birmingham, England Nassau, Bahamas
Burbank, CA New Orleans, LA
Cincinnati, OH Orlando, FL
Cleveland, OH Philadelphia, PA
Costa Mesa/Santa Ana, CA Pittsburgh, PA
Denver, CO Portland, OR
Detroit, MI San Diego, CA
Fairbanks, AK San Francisco, CA
Freeport, Bahamas San Juan, PR
Ft. Lauderdale, FL Sarasota, FL
Gatwick - London, England Seattle, WA
Great Falls, MT San Jose, CA
Heathhrow - London, England St. Thomas, VI
Helena, MT Tampa, FL
Kalispell, MT Tucson, AZ
Lincoln, NE Washington, DC
Los Angeles, CA West Palm Beach, FL
Luton, England
Manchester, England

The Company generally considers the facilities it leases adequate and
suitable for the requirements of each of its operations. Adequate space is
available at the corporate offices to accommodate expansion needs.

Item 3. Legal Proceedings

The Company and certain of its subsidiaries and affiliates are plaintiffs
or defendants in various actions, proceedings and claims, including
environmental claims. Some of the foregoing involve or may involve compensatory
or other damages. Litigation is subject to many uncertainties and although
liability, if any, is not ascertainable, the Company believes that any resulting
liability will not materially affect the Company's financial position or the
results of its operations.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

PART II

Item 5. Market for the Company's Common Equity and Related Security Holder
Matters

The Company is 100% owned by Ranger Aerospace Corporation and accordingly,
there is no established public trading market for the Company's common stock.

See "Item 11 - Executive Compensation - Sale of Equity" for a discussion of
sale of securities in fiscal 2001 by Ranger Aerospace Corporation.

Item 6. Selected Financial Data

The selected financial data set forth below should be read in conjunction
with the financial statements of the Company and its Predecessor and related
notes thereto included elsewhere in this Form 10-K and with "Item 7-Management's
Discussion and Analysis of Financial Condition and Results of Operation"
included herein.

(Dollars in thousands, except per share data)
SUCCESSOR PREDECESSOR
(CONSOLIDATED) (COMBINED)
-------------- ---------
THREE
MONTHS
YEAR ENDED ENDED
MARCH 31, MARCH 31, YEAR ENDED DECEMBER 31,
2001 2000 1999 1998 1997 1996
--------- --------- --------- -------- --------- ---------

STATEMENT OF OPERATIONS DATA:

Revenues $161,983 $141,044 $123,441 $30,156 $119,325 $121,574
Costs and Expenses:
Operating expenses 136,664 116,409 99,035 25,986 97,116 101,903
Selling, general and administrative 10,648 13,266 8,865 1,818 7,581 8,291
Depreciation and amortization 11,620 10,235 8,721 1,119 4,604 4,420
--------- --------- --------- -------- --------- ---------
Total costs and expenses 158,932 139,910 116,621 28,923 109,301 114,614

Operating income 3,051 1,134 6,820 1,233 10,024 6,960
Other income (expense), net 88 24 (253) (57) (71) (45)
Interest income 40 100 207 73 350 343
Interest and other financial expense (10,939) (10,583) (11,281) (170) (669) (606)
--------- --------- --------- -------- --------- ---------
Income (loss) before income taxes (7,760) (9,325) (4,507) 1,079 9,634 6,652
Income taxes 46 -- 50 347 3,602 2,433
--------- --------- --------- -------- --------- ---------
Net income (loss) before extraordinary item (7,806) (9,325) (4,557) 732 6,032 4,219
Extraordinary loss on early extinguishment of debt -- -- (213) -- -- --
--------- --------- --------- -------- --------- ---------
Net income (loss) $ (7,806) $ (9,325) $ (4,770) $ 732 $ 6,032 $ 4,219
========= ========= ========= ======== ========= =========

(Dollars in thousands, except per share data)
SUCCESSOR PREDECESSOR
(CONSOLIDATED) (COMBINED)
-------------- ---------
THREE
MONTHS
YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, DECEMBER 31,
2001 2000 1999 1998 1997 1996
-------- --------- ---------- -------- --------- --------

STATEMENT OF CASH FLOWS DATA:

Net cash (used in) provided by operating activities $ 6,056 $ (778) $ 6,645 $ 4,995 $ 17,139 $ 7,161
Net cash used in investing activities (3,831) (13,859) (102,556) (2,666) (4,300) (9,061)

Net cash provided by (used in) financing activities (2,012) 11,747 99,222 (2,329) (13,030) 2,091

OTHER DATA:
EBITDA(a) $14,671 $ 11,369 $ 15,541 $ 2,352 $ 14,628 $11,380
Capital expenditures 3,839 8,027 13,431 2,666 3,947 9,061

BALANCE SHEET DATA (AT END OF PERIOD):
SUCCESSOR PREDECESSOR
------------------------------- -----------------------------
Cash $ 634 $ 421 $ 3,311 $ 0.1 $ - $ 191
Total assets 125,982 132,332 123,754 - 41,930 38,602
Total debt 88,909 91,114 82,927 - 91 173
Total stockholder's equity 5,666 13,686 19,350 0.1 14,557 15,433

(a) EBITDA is defined herein as net income (loss) before interest, income
taxes, depreciation, amortization and other income (expense). Although EBITDA is
not a measure of performance calculated in accordance with generally accepted
accounting principles, the Company has included information concerning EBITDA in
this annual report because it is commonly used by certain investors and analysts
as a measure of a company's ability to service its debt obligations. The
Company's calculation of EBITDA may not be comparable to similarly titled
measures reported by other companies since all companies do not calculate this
non-GAAP measure in the same manner. The Company's EBITDA calculation is not
intended to represent cash used in operating activities, since it does not
include interest and taxes and changes in operating assets and liabilities, nor
is it intended to represent the net increase or decrease in cash, since it does
not include cash provided by (used in) investing and financing activities.

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

The following discussion of the Company's consolidated historical results
of operations and financial condition should be read in conjunction with the
financial statements and the Notes thereto which appear in Part II, Item 8 of
this 10-K.

Overview

The Company's business includes aviation fueling services (62.9% of fiscal
2001 revenues), aircraft ground services (33.8%) and other aviation services
(3.3%). Aviation fueling services are comprised primarily of into-plane fueling,
maintenance and operation of fuel storage and delivery systems and the retail
sale of fuel products. Generally, the Company has custody over, but not
ownership of, the fuel it manages and delivers. Aircraft ground services consist
primarily of ground handling, aircraft interior grooming, cargo handling,
passenger and traffic services and FBO's.

On April 1, 1998, an investor group capitalized Ranger Aerospace
Corporation (the 100% owner of the Company) with an aggregate investment of
$24.1 million, all of which was contributed as equity to the Company in return
for all of its outstanding common stock. The net proceeds from the equity
investment and the Company's issuance of $75 million of Senior Increasing Rate
Notes were used to consummate the acquisition of the ASIG business from Viad for
$95 million (subject to final adjustments). Concurrent with the acquisition of
the ASIG business (the "Acquisition"), the Company entered into a $10 million
senior credit facility which was subsequently amended in May 1999 and increased
to $15 million to consummate the purchase of Elsinore, L.P. Additional equity
of $3.7 million was contributed to the Company in August 1999.

Revenues

Into-plane fueling service consists of providing airplanes with specified
amounts of fuel from fuel storage facilities located at or near the airport. The
Company generally records revenue from its into-plane fueling contracts based on
a fee per gallon of fuel delivered. Fuel system maintenance and operation
consists of the maintenance and operation of the fuel storage and delivery
systems at an airport. These systems are typically composed of storage tanks,
pumps, pipes and filter/separators. The Company generally records revenue from
its maintenance and operation contracts based on reimbursement of costs, plus an
additional monthly fee. In addition, the Company sells aviation fuel to private
aircraft at retail prices at locations where it has FBOs.

Ground handling services consist of the provision of ground handling crews
and all necessary ground support equipment to process airline flights through
the full range of on-the-ground services. Aircraft interior grooming consists of
the cleaning of aircraft cabins between flights and cargo handling consists of
the loading, warehousing and documentation of cargo. Passenger and traffic
services include passenger ticketing, check-in and boarding, security clearance,
special assistance and skycap services.

FBOs generally include the provision of terminal services, pilot
facilities, maintenance, weather service, flight planning and hangar space to
private, executive and corporate aircraft. For each of these aircraft ground
services, other than FBOs, the Company is generally compensated by a fixed fee
for each aircraft serviced, based on the size of the aircraft. For FBOs, the
Company is generally compensated by a fixed fee for specific services rendered.

The Company provides its services to its customers pursuant to contractual
agreements and currently has approximately 850 such contracts. In fiscal 2001,
the Company's largest contract accounted for 5.1% of revenue, and no other
contract accounted for more than 2.5% of revenue. The majority of the Company's
contracts have an industry standard initial term of one year, although the
Company's larger contracts generally run for initial terms of three to five
years.

Costs and Expenses

The Company's principal operating expenses are labor costs and direct
supervision at its stations along with related benefits and payroll taxes, cost
of fuel sold, workers' compensation, property and liability insurance, rent
expense, repairs and maintenance expenses and miscellaneous other direct
station-related expenses. Certain of these expenses are relatively fixed,
regardless of the extent of operations at a particular station, including the
cost of the facility, station management and related administrative expenses.

Selling, general and administrative expenses include the costs of marketing
the Company's services, general supervision provided to the stations,
acquisition-related expenses and accounting, finance and personnel related
expenses. These costs are generally comprised of labor costs and related
benefits and payroll taxes, legal and other professional fees and miscellaneous
expenses.

Results of Operations

The following table summarizes the Company's results of operations for the
periods indicated (dollars in millions):

Year ended March 31,
2001 2000 1999
------------------- ------------------- --------------

Revenues $ 162.0 100.0% $ 141.0 100.0% $123.4 100.0%
Costs and expenses:
Operating expenses 136.7 84.4% 116.4 82.6% 99.0 80.2%
Selling, general and
administrative 10.6 6.5% 13.2 9.4% 8.9 7.2%
Depreciation and amortization 11.6 7.2% 10.2 7.2% 8.7 7.1%
------------------- ------------------- --------------
Operating Income $ 3.1 1.9% $ 1.2 .8% $ 6.8 5.5%
=================== =================== ==============

Net income (loss) $ (7.8) (4.8)% $ (9.3) (6.6)% $ (4.8) (3.9%)
=================== =================== ==============

EBITDA $ 14.7 9.2% $ 11.4 8.1% $ 15.5 12.6%
=================== =================== ==============

Company's Fiscal Year Ended March 31, 2001 Compared to March 31, 2000

Revenues increased $21.0 million or 14.9%, from $141.0 million to $162.0
million in fiscal 2001. The increase was attributable to, among other things,
new business and increased activity on existing contracts. The largest impact on
the increase in revenue was caused by new contracts at our Miami and Detroit
locations which accounted for $5.6 million of the revenue increase from fiscal
2000 to fiscal 2001.

Operating expenses increased $20.3 million or 17.4%, from $116.4 million to
$136.7 million in fiscal 2001 as compared to fiscal 2000. The increase was
attributable to, among other things, new business and increased activity on
existing contracts. In addition, during fiscal 2001 the company experienced
rising labor and insurance costs mainly related to a tight labor pool, impact of
new operating leases (which the Company first began in January 2000) and a
tougher insurance market.

Selling, general and administrative expenses decreased $2.6 million or
19.7%, from $13.2 million to $10.6 million in fiscal 2001 as compared to fiscal
2000. The decrease is primarily attributable to, among other things, one time
write-offs of failed acquisition costs and Viad collection costs taken in fiscal
2000 which totaled $3.5 million.

Depreciation and amortization expense increased $1.4 million or 13.7%. This
increase is primarily attributable to the depreciation on new equipment
purchases.

As a result of the above factors, operating income increased $1.9 million
or 158%, from $1.2 million in fiscal 2000 to $3.1 million in fiscal 2001. The
increase was primarily attributable to, among other things, new business and
increased activity on existing contracts along with one time write-offs from
fiscal 2000 offset partially by increased operating costs most notably labor and
insurance.

Interest and other financial expenses increased $0.3 million or 3.2%, from
$10.6 million in fiscal 2000 to $10.9 million in fiscal 2001.

Income taxes increased $.05 million for fiscal 2001.

Net loss decreased $1.5 million or 16.1%, from $(9.3) million in fiscal 2000 to
$(7.8) million in fiscal 2001. The decrease was primarily attributable to the
factors described above.

For the year ended March 31, 2001, EBITDA increased by $3.3 million or
28.9%, from $11.4 million in fiscal 2000 to $14.7 million in fiscal 2001. The
increase was primarily attributable to the factors described above.

Company's Fiscal Year Ended March 31, 2000 Compared to March 31, 1999

Revenues increased $17.6 million or 14.3%, from $123.4 million to $141.0
million in fiscal 2000. The increase was attributable to, among other things,
new business, increased activity on existing contracts and acquisitions of
Elsinore L.P. and GAH offsetting the loss of the British Airways Grooming
contract. The acquisitions of Elsinore L.P. and GAH generated revenues of $12.8
million in fiscal 2000. The British Airways grooming contract generated $9.8
million of revenue in fiscal 1999. Hurricane Floyd caused severe damage to the
Freeport operation, which resulted in a revenue loss of $0.3 million. Thus, for
the year ended March 31, 2000, core business (business excluding the British
Airways grooming contract, the acquisition of Elsinore, L.P. and GAH and the
loss due to Hurricane Floyd), revenue increased $14.9 million or 13.1%.

Operating expenses increased $17.4 million or 17.1%, from $99.0 million to
$116.4 million. The increase was attributable to, among other things, increase
in operating expenses related to the acquisitions of Elsinore LP and GAH of
$11.3 million, and a decrease in operating expenses due to the loss of the
British Airways grooming contract of $7.6 million. For the year ended March 31,
2000, operating expenses included a $0.2 million loss on retirement of fixed
assets and $0.3 million of costs associated with start-up costs. Thus, for the
year ended March 31, 2000, core business (business excluding the British Airways
grooming contract, the acquisition of Elsinore, L.P. and GAH, loss on retirement
of fixed assets and start-up costs and including the impact of Hurricane Floyd),
operating expenses increased $13.8 million or 15.8%. Core business operating
expenses as a percentage of core revenues increased 1.4% from 80.5% to 81.9%.
The increase in core operating expenses as a percentage of core revenue was
mainly due to increases in operating expenses at three stations. Two of the
stations had significant reductions in flights from South America as a result of
the weakened South America economy. Operating expenses as a percentage of
revenue at the third station increased due to inefficiencies associated with the
set up and implementation of fixed fueling carts.

Selling, general and administrative expenses increased $4.3 million or
48.3% from $8.9 million to $13.2 million. The increase is primarily
attributable, among other things, to a write-off of $2.8 million of acquisition
expenses related to the pursuit of failed acquisitions and a write-off of $0.7
million mainly related to costs incurred in the pursuit of the collection of the
receivable due from Viad. Of the remaining increase of $0.9 million, $0.7
million is attributable to a restructuring in the finance department, which is
not expected to reoccur.

Depreciation and amortization increased $1.5 million or 17.2%. The
acquisitions accounted for $0.3 million of the increase. The remaining increase
of $1.2 million is primarily attributable to the depreciation on new equipment
purchases.

As a result of the above factors, operating income decreased $5.6 million
or 82.4% from $6.8 million to $1.2 million. This decrease was primarily
attributable to the write-offs taken in 2000 related to the failed acquisition
costs of $2.8 million, Viad collection costs of $0.7 million, an increase in
depreciation and amortization of $1.5 million, and the loss of the British
Airways grooming contract which generated $2.2 million of operating income in
1999.

Interest and other financial expense decreased $0.7 million or 6.2% from
$11.3 million to $10.6 million. This decrease is mainly attributable to
financing costs incurred in 1999 related to the issuance of the $75 million
Senior Increasing Rate Notes which were written off in 1999 upon the issuance of
the $80 million Senior Notes due 2005.

Income Taxes remained constant at $0.1 million for both fiscal years.

Accordingly, net loss increased $4.5 million or 93.8% from $(4.8) million
to $(9.3) million.

For the year ended March 31, 2000, EBITDA decreased by $4.1 million or
26.5% from $15.5 million to $11.4 million. EBITDA for the year ended March 31,
2000 included several one-time expenses (write off of failed acquisition
expenses ($2.8 million), the Viad collection costs ($0.7 million), the
additional costs associated with the restructuring of the finance department
($0.7 million), the adverse effect of Hurricane Floyd ($0.2 million), start up
costs ($0.3 million) and the loss on retirement of fixed assets ($0.2 million).
EBITDA for March 31, 2000 associated with the acquisitions of Elsinore and GAH
was $1.5 million. Thus, core EBITDA increased $1.5 million or 11.3% from $13.3
million to $14.8 million. (EBITDA for March 31, 1999 associated with the lost
British Airways Grooming contract was $2.2 million.) Furthermore, the adjusted
EBITDA for the year ended March 31, 2000 of $16.3 million (core EBITDA of $14.8
million plus $1.5 million of Elsinore and GAH EBITDA) compares with $13.3
million of adjusted EBITDA (excluding the lost British Airways Grooming
contract) for the year ended March 31, 1999.

Liquidity and Capital Resources

Net cash provided by (used in) operating activities was $6.1 million for
fiscal 2001, as compared to $(0.8) million for fiscal 2000. Net cash provided by
operating activities increased primarily due to a decrease in the net loss of
$1.6 million from a loss of ($9.3) million in 2000 to a loss of ($7.7) million
in 2001. Net cash provided by (used in) operating activities was $(0.8) million
for fiscal 2000, as compared to $6.6 million for fiscal 1999. Net cash used in
operating activities increased primarily due to an increase in the net loss of
$4.5 million from a loss of ($4.8) million in 1999 to a loss of ($9.3) million
in 2000. Cash used for working capital requirements increased $1.9 million from
$(2.3) in 2000 to $(0.4) million in 1999.

Net cash used in investing activities was $3.8 million for fiscal 2001, as
compared to $13.9 million for fiscal 2000. The decrease was primarily
attributable to the decrease in capital spending by leasing new equipment. Net
cash used in investing activities was $13.9 million for fiscal 2000 as compared
to $102.6 million for fiscal 1999. The decrease was primarily attributable to
the decrease in acquisition expenses of $83.1 million and a decrease in capital
spending of $5.4 million.

Net cash provided by (used in) financing activities was $(2.0) million for
fiscal 2001, as compared to $11.7 million for fiscal 2000. This decrease is due
to an increase in borrowings of $2.6 million, a repayment on a note of $0.5
million and a decrease in equity infusion of $3.7 million. Net cash provided by
financing activities was $11.7 million for fiscal 2000 and $99.2 million for
fiscal 1999. This decrease is primarily due to a decrease in the issuance of
common stock of $20.4 million and a decrease in borrowings of $67.1 million
after finance costs and an infusion of $3.7 million in 2000.

As of March 31, 2001, the Company had long-term indebtedness of $80.0
million in the form of its Series B 11% Senior Notes due 2005 and $4.0 million
of under its Senior Credit Facility.

The Company's primary sources of liquidity are from cash flow provided by
operations, borrowings under its Senior Credit Facility and cash infusion from
the Parent. In July 2000, the Company amended its Senior Credit Facility to
increase the amount available under the Facility to $15,000,000. Based upon the
successful implementation of management's business and operating strategy, the
Company believes that these funds will provide it with sufficient liquidity and
capital resources to meet current and future financial obligations, including
the payment of principal and interest on the 11% Senior Notes, as well as to
provide funds for the Company's working capital, capital investments and other
needs for the next twelve months. However, recently the workers compensation
insurance market and the bond surety market have tightened up significantly
requiring much stronger collateralization to secure the workers compensation
insurance policy and the various performance bonds which are required under
several of the Company's operating agreements at some of the airports that the
Company serves. If these markets do not relax their collateral requirements by
April 1, 2002 when the Company's workers compensation policy and several of the
performance bonds are scheduled to be renewed, the Company may have to
restructure its Senior Credit Facility or seek additional capital to cover the
increased collateral requirements. The Company's future operating performance
and ability to service or refinance the 11% Senior Notes and to repay, extend or
refinance its Senior Credit Facility will be subject to future economic
conditions and to financial, business and other factors, many of which are
beyond the Company's control. There can be no assurance that such sources of

funds will be adequate and that the Company will not require additional capital
from borrowings or securities offerings to satisfy such requirements. In
addition, there can be no assurance that the Company will have sufficient
available capital resources to realize its acquisition strategy. Such future
acquisitions, depending on their size and the form of consideration, may require
the Company to seek additional debt or equity financing.

Recent Developments

DEFINITIVE AGREEMENT FOR MERGER

On November 15, 2000, Ranger, the Company, and Signature Flight Support
Corporation ("Buyer"), a wholly-owned subsidiary of BBA Group, plc ("BBA")
announced that they entered into a definitive agreement (the "Merger Agreement")
under which Signature will acquire Ranger stock for a total consideration of
approximately $152 million, in addition to the assumption of the Senior Notes
and the repayment of the Company's debt (the "Merger"). Closing of the Merger
is subject to the satisfaction or waiver of the following conditions:

- - any waiting period applicable to the consummation of the Merger under the
Hart Scott Rodino Act shall have expired or been terminated and the Company
and Buyer shall have received the required consent and approval of the
German Merger Control Authority;

- - no Governmental Entity or federal or state court of competent jurisdiction
shall have enacted, issued or enforced any statute, regulation, decree,
injunction or other order which has become final and nonappealable and
which prohibits the consummation of the Merger;

- - the Company shall have obtained any necessary consent or approval required
by the Gatwick Airport Authority;

- - all outstanding warrants and options issued by the Company shall, by the
terms of any agreement or plan pursuant to which they were issued, entitle
the holders thereof to receive only the consideration set forth in the
Merger Agreement; and

- - the Company's shareholders shall have approved the Merger.

The Merger is also subject to the following additional conditions:

- - The representations and warranties of the Company contained in the Merger
Agreement (disregarding any qualifications as to materiality or Company
Material Adverse Effect or similar qualifications contained therein) shall
be true and correct in all respects as of the date the Merger Agreement was
executed and as of the closing of the Merger as though made on and as of
the date of the closing of the Merger, except for those failures of such
representations and warranties to be true and correct which individually or
in the aggregate would not be reasonably likely to have a Company Material
Adverse Effect. For this purpose, Company Material Adverse Effect is
defined as, "any change or effect that is or would be materially adverse to
the assets, business, prospects, results of operations or financial
condition of the Company and the Company subsidiaries, taken as a whole
(other than changes or effects that are the result of economic factors
affecting the economy or financial markets as a whole or generally
affecting the aviation services markets or that arise out of or result from
actions contemplated by the parties in connection with this Agreement or
the announcement or performance of this Agreement or the transactions
contemplated by this Agreement)."

- - The Company and the Shareholders shall have performed and complied with all
of their respective covenants hereunder in all material respects through
the closing.

- - The Company shall have delivered to the Buyer and Merger Subsidiary a
certificate signed by an executive officer of the Company to the effect
that each of the conditions noted above are satisfied in all respects.

- - The representations and warranties of the Buyer contained in the Merger
agreement shall be true and correct in all material respects.

- - The Buyer shall have performed and complied with all of its covenants
hereunder in all material respects through the closing.

- - The Buyer shall have delivered to the Company a certificate signed by an
executive officer of the Buyer to the effect that each of the conditions
noted above are satisfied in all material respects.

The consummation of the Merger will trigger Change of Control provisions
under ASIG's $80,000,000 Senior Notes, thus requiring the Buyer to tender for
the bonds at a purchase price equal to 101% of the principal amount.

On January 4, 2001, the Buyer commenced a tender offer for all of the
outstanding 11% Senior Notes due 2005 of the Company. In connection with the
tender offer, the Buyer sought consents to certain proposed amendments to the
Indenture under which Senior Notes were issued. The purpose of the proposed
amendments is to eliminate certain restrictive covenants contained in the
Indenture, thereby affording the Company additional financial and operational
flexibility. The purchase price under the tender offer was $1,181.89 per $1,000
principal amount of Senior Notes tendered (of which $20 constitutes a consent
payment), plus accrued but unpaid interest to (but excluding) the date of
payment of such purchase price.

The tender offer is conditioned upon, among other things, the receipt of
the requisite consents to adopt the proposed amendments and the completion of
the Merger. The offer was made only by an Offer to Purchase and Consent
Solicitation Statement dated January 4, 2001 and the Related Letter of
Transmittal and Consent.

On February 14, 2001, counsel for the Buyer informed the Company that the
Buyer believed the first additional closing condition listed above has not been
satisfied. The Company informed the Buyer that it believed all closing
conditions other than the expiration or termination of the waiting period under
the Hart Scott Rodino Act have been satisfied.

On May 22, 2001, the Company and the Buyer agreed to amend and restate the
original Merger Agreement between them, dated as of November 14, 2000 to resolve
a dispute over whether the variance between Ranger's actual and budgeted results
of operations and certain other changes constituted a material adverse change
under the terms of the original Merger Agreement. The aggregate consideration to
be paid by the Buyer to the holders of Ranger common stock had been reduced to
$136.5 million under the amended and restated Merger Agreement.

In connection with the Merger, on Friday, May 25, 2001, the Buyer amended
its tender offer and consent solicitation for 100% of the 11% Senior Notes due
2005 of ASIG (the "Securities"). Pursuant to this revised tender offer and
consent solicitation, the Buyer offered to purchase all of the outstanding
Securities at a price equal to 100% of the principal amount of the Securities
plus all accrued but unpaid interest thereon. As of the expiration of the tender
offer less than 100% of the Senior Notes had been validly tendered.

On June 22, 2001, the Company and the Buyer agreed to amend the amended and
restated Merger Agreement to further reduce the aggregate consideration paid by
the Buyer in the Merger. This reduction in consideration was agreed to by the
Company and Buyer because less than 100% of the Senior Notes had been tendered
to the Buyer under its May 25, 2001 offer to purchase the Senior Notes at a
price equal to 100% of the principal amount thereof, plus all accrued but unpaid
interest thereon. Under this amendment to the amended and restated Merger
Agreement, the Buyer agreed to revise its tender offer to purchase 100% of the
Senior Notes at a price equal to 104% of the principal amount thereof, plus all
accrued but unpaid interest thereon.

In connection with the Merger on June 22, 2001, the Buyer amended its
tender offer and consent solicitation for 100% of the Securities. Pursuant to
the revised tender offer and consent solicitation, Signature will offer to
purchase all of the outstanding Securities at a price equal to 104% of the
principal amount of the Securities plus all accrued but unpaid interest thereon.
The amended offer will expire at 10:00 a.m., New York City time, on July 10,
2001, unless extended.

There is no assurance that the Merger will occur.

Environmental Matters

The Company is subject to compliance obligations and liabilities imposed
pursuant to federal, state, local and foreign environmental and workplace health
and safety requirements, including CERCLA. In particular, the Company's aviation
fueling services are subject to liabilities and obligations relating to the
above ground and underground storage of, and the release and cleanup of,
petroleum products. Although the Company believes it is in material compliance
with environmental, health and safety requirements, the possibility exists that
noncompliance could occur or be identified in the future, and the penalties or
costs of corrective action associated therewith could have a material adverse
effect on the Company's business, operating results and financial condition. In
addition, requirements are complex, change frequently and have tended to become
more stringent over time, and there can be no assurance that these requirements
will not change in the future in a manner that could materially and adversely
affect the Company.

The Company is currently conducting or funding, or expects to conduct or
fund, environmental investigations, monitoring and cleanups at certain of its
previously or currently operated facilities. Also, from time to time, the
Company receives notices of potential liability for cleanup costs associated
with offsite waste recycling or disposal facilities at which wastes associated
with its operations allegedly have come to be located. In addition, airport
authorities are coming under increasing pressure to clean up previous
contamination at their facilities and are seeking financial contribution from
airport tenants and companies which operate at their airports. Although the
Company has taken steps to mitigate or remove the foregoing liabilities, the
Company could bear direct liability for the foregoing matters and such liability
could have a material adverse effect on the Company's business, operating
results and financial condition.

Euro Conversion Issue

On January 1, 1999, certain member countries of the European Union
established fixed conversion rates between their existing currencies and the
European Union's common currency ("Euro") and adopted the Euro as their common
legal currency. The transition period for the introduction of the Euro will be
between January 1, 1999 and January 1, 2002. The Company is currently
evaluating the effects of the Euro conversion as it relates to the conversion of
information technology systems, recalculating currency risk, strategies
concerning continuity of contracts and the impact on its operations and
financial condition, particularly as the Euro conversion relates to the
Company's European operations.

Based on its work to date, the Company believes the Euro conversion will
not have a material adverse impact on the Company's consolidated financial
statements.

Recent Accounting Pronouncements

In fiscal 1999, the Company adopted Statement of Financial Accounting
Standards No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits-an amendment of FASB Statements No. 87, 88, and 106"
(SFAS No. 132). SFAS No. 132 revises employers' disclosures about pension and
other postretirement benefit plans. It does not change the measurement or
recognition of those plans; therefore, the adoption of SFAS No. 132 affected the
Company's disclosure information only.

establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. It requires that an entity recognized all derivatives as
either assets or liabilities in the statement of financial position and measures
those instruments at fair value. The Company plans to adopt SFAS No. 133 in the
year 2000 and is currently assessing the impact this statement will have on its
consolidated financial statements.

In fiscal year 2000, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 137, "Accounting for Derivative
Instruments and Hedging Activities -- Deferral of the Effective Date of FASB
Statement No. 133" (SFAS No. 137), which delayed the effective date of SFAS No.
133. The effective date for SFAS 133, after issuance of SFAS No. 137, is for
all fiscal quarters of all fiscal years beginning after June 15, 2000.

The Company plans to adopt SFAS No. 133 in fiscal year 2001. The adoption
of SFAS No. 133 is not expected to impact the Company significantly.

Impact of Inflation

Although the Company cannot accurately determine the precise effect of
inflation on its operations, it does not believe that inflation has had a
material effect on its revenue or results of operations for the periods
presented herein. However, substantial increases in the Company's costs,
particularly labor or employee benefits costs would be likely to adversely
affect the Company's revenues and operating results. In addition, because
inflation would likely materially and adversely affect the airline industry as a
whole, and the Company's business depends to a large extent on the economic
health of the airline industry, an increase in inflation would likely have a
material adverse effect on the Company's revenue and operating results.

Forward-Looking Statements

Certain statements contained with this report may be deemed
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements in this report other than statements of historical
fact are forward-looking statements that are subject to known and unknown risks,
uncertainties and other factors, which could cause actual results and
performance of the Company to differ materially from such statements. The words
"believe," "expect," "anticipate," "intend," "will," "plans", and similar
expressions identify forward-looking statements. In addition, forward-looking
statements contained herein relate to, among other things, (i) anticipated
financial performance, (ii) ability to comply with the Company's general working
capital requirements, and (iii) ability to generate sufficient cash flow from
operations to fund all costs of operations. While the Company believes the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance such expectations will prove to have been correct. There are a
variety of factors which would cause future outcomes to differ materially from
those described in this report, including, but not limited to, (i) general
economic conditions, (ii) material reduction in revenues, (iii) inability to
collect in a timely manner a material amount of receivables, (iv) increased
competitive pressures, (v) inability to obtain required permits and approvals to
conduct operations, (vi) changes in federal, state and local laws and
regulations, especially aircraft regulations, or interpretation of such, (vii)
potential increases in equipment, maintenance, operating or labor costs, (viii)
management retention and development, (ix) the requirement to use internally
generated funds for purposes not presently anticipated, (x) the computer systems
of the Company's key suppliers, customers, creditors and financial service
organizations, (xi) any sudden or substantial change in senior management, which
could adversely affect major customer relationships, (xii) the adverse affect on
the Company's customers resulting from the increase in the price or the decrease
in the availability of aviation fuel, (xiii) risks associated with doing
business in foreign countries and with foreign customers and (xiv) the loss of
one or more of the Company's significant customers. The Company undertakes no
obligations to update publicly any forward-looking statement, whether as a
result of new information, future events or otherwise.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in interest rates and currency
exchange rates, which may adversely affect our results of operations and
financial condition. We seek to minimize the risks from these interest rate and
currency exchange rate fluctuations through our regular operating and financing
activities. Management believes that such risks are not material to the results
of operations and the financial condition of the Company.

Item 8. Financial Statements and Supplementary Data

The financial statements required pursuant to this item are included in
Part IV, Item 14 of this Form 10-K and are presented beginning on Page F-1.

Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure

None

PART III

Item 10. Directors and Executive Officers of the Company

The following table sets forth certain information (ages as of March 31,
2001) with respect to the persons who are members of the Board of Directors (the
"Board"), executive officers or key employees of the Company. John Hancock
Mutual Life Insurance Company ("Hancock") and affiliates of Canadian Imperial
Bank of Commerce ("CIBC") together have the ability to appoint a majority of the
members of the Board of both Ranger and the Company pursuant to the
Securityholders Agreement. See "Item 13- Certain Relationships and Related
Transactions--Securityholders Agreement."

NAME AGE POSITION AND OFFICES
- --------------------- --- -------------------------------------------------------

Stephen D. Townes 48 President, Chief Executive Officer and Director
George B. Schwartz 47 Chairman of the Board, Director and Assistant Secretary
George W. Watts 48 Executive Vice President and Secretary
John W. Gassett 54 Senior Vice President-ASIG North America
Jeffrey P. Hartman 38 Senior Vice President and Chief Financial Officer
Paul Jefferson 45 Senior Vice President and Managing Director-ASIG Europe
William McLendon 42 Vice President-Eastern Operations
Ronald F. Pattie 53 Vice President-Technical Services
James P. Ferrara 47 Vice President-Quality and Engineering & CIO
Wesley Vedo 62 Vice President-National Programs
Kurt A. Granger 43 Vice President-Customer Service
Robert D. Sellas, Jr. 37 Vice President-Marketing
Silvio Tano 46 Vice President-Ground Services
Terry Rinehart 55 Vice President-Human Resources & Industrial Relations
Jay R. Levine 44 Director
Edward Levy 36 Director
S. Mark Ray 48 Director

Stephen D. Townes founded Ranger and the Company and became President,
Chief Executive Officer and Director upon the consummation of the Acquisition.
Prior to joining Ranger and the Company, Mr. Townes had been the Vice Chairman
and a Director of Sabreliner Corporation's commercial aircraft services division
since November 1995. From July 1994 to November 1995, Mr. Townes was President
and Partner of Intertrade Ltd., and prior to joining Intertrade, Mr. Townes was
the Executive Vice President & Technical Operations Officer of Stevens Aviation.

Prior to joining Stevens Aviation in March 1990, Mr. Townes held management
positions with the Dee Howard Company and LTV Aerospace & Defense (now Vought
Aircraft). Mr. Townes received an engineering degree from West Point, an MBA
from Long Island University and completed the PMD Program at Harvard Business
School.

George B. Schwartz co-founded Ranger and the Company and became Chairman of
the Board upon the consummation of the Acquisition. Mr. Schwartz is currently
the President of Tioga Capital Corporation, a position he has held since 1991.
From 1987 to 1990, Mr. Schwartz was a Partner of The Airline Group, L.P., an
investment fund, the general partner of which was an affiliate of Bass Brothers
Enterprises. Prior to joining Airline, Mr. Schwartz was employed as a Senior
Vice President of Drexel Burnham Lambert, Inc. Mr. Schwartz also serves as a
director of Thompson Hospitality Corporation and as Chairman of the Board of
Engineered Fibres, Inc. Mr. Schwartz received his MBA from the Amos Tuck School
at Dartmouth College and a bachelors degree from Vanderbilt University.

Dr. George W. Watts joined Ranger and the Company as Executive Vice
President and Secretary upon the consummation of the Acquisition. Prior to
joining Ranger and the Company, Dr. Watts had been the President of Executive
Vision, a management consulting firm specializing in executive and
organizational development from 1985 to 1994 and 1997 to 1998. From 1994 to
1996, Dr. Watts was the Executive Vice President of PM Realty Group. Dr. Watts
has authored several books regarding corporate change management and executive
development and has consulted with numerous venture capital companies and major
corporations in the areas of executive assessment, management training, business
process re-engineering, corporate restructuring, marketing program development,
post-merger integration and accelerated growth management. Dr. Watts received
bachelors, master's and Ph.D. degrees in psychology and education from The
College of William and Mary.

John W. Gassett joined the Company in 1967 and until 1980, served as
Station Manager of the West Palm Beach, Miami and Fort Lauderdale facilities. In
1980, Mr. Gassett was appointed a Director of Sales, in 1988 was named Vice
President--Marketing and Sales and, effective July 1998, was promoted to his
current position. Mr. Gassett attended the University of North Florida and
Pensacola Junior College.

Paul Jefferson joined the Company in 1996 as Vice President--Europe and,
effective July 1998, was promoted to his current position. Mr. Jefferson is
responsible for all aspects of the Company's business in the United Kingdom and
continental Europe. Mr. Jefferson is also a director of Skytanking GmbH, the
Company's joint venture in Germany. From 1992 to 1996, Mr. Jefferson held the
position of Retail Services Manager in France with Eurotunnel and prior to that
Mr. Jefferson was employed with Esso U.K. for 14 years. Mr. Jefferson received a
BS degree (with Honours) in Business Studies from Queens University--Belfast.

Jeffrey P. Hartman joined the Company as its Senior Vice President and
Chief Financial Officer on August 3, 1999. Mr. Hartman came to the Company from
Signature Flight Support Corporation where he served as the Vice President of
Finance. Prior to 1993, Mr. Hartman was an Audit Manager with KPMG, LLP. Mr.
Hartman is a Certified Public Accountant who received both a Masters Degree in
Accounting and a Masters of Business Administration from Northeastern University
in Boston, Massachusetts.

William McLendon joined the Company in July 1998 as Vice President--Eastern
Operations. Mr. McLendon is responsible for all aspects of the Company's
business in the eastern U.S. Prior to joining the Company, Mr. McLendon was a
General Manager with Stevens Aviation from 1994 to 1996, and from 1991 to 1994,
was employed by ATS Aerospace, Inc., most recently as Vice President,
Operations. From 1981 to 1991 Mr. McLendon served in the United States Air
Force. Mr. McLendon received an engineering degree from the United States Air
Force Academy and bachelors and master's degrees from Oxford University where he
was a Rhodes Scholar.

Ronald F. Pattie joined the Company in 1969 as a field operations officer,
has since served as Director of Maintenance, was appointed as Director of
Technical Services and Quality Assurance in 1983 and, effective July 1998, was
promoted to his current position. Mr. Pattie received a bachelor's degree in
Business Administration and Accounting from the University of South Florida.

Peter J. Ferrara joined the Company in 1999 as the Company's Vice President
Quality and Engineering and Chief Information Officer. Mr. Ferrara's primary
responsibilities are quality control programs, ISO-9000 certification efforts,
internal operations auditing, the Company's MIS departments and systems, and
technical interface with engineering and quality management at airlines and
airport authorities. Prior to joining the Company, Mr. Ferrara was a senior
manager and engineering veteran of Lockheed Martin and GE-Aerospace, with
extensive experience in quality systems and aerospace technologies. Mr. Ferrara
is also a licensed professional engineer and commercial airplane pilot. Mr.
Ferrara graduated from the U.S. Military Academy at West Point, New York in 1975
with honors.

Wesley R. Vedo joined the Company, in 1959 as a Ramp Agent and was promoted
to his current position in June of 1998. Mr. Vedo assists the Senior Vice
President-North America with operations and the design and implementation of new
system and initiatives. Prior to serving as Vice President-National Programs,
Mr. Vedo served as Regional Vice President of Sales and Service from November of
1991 to June of 1998.

Kurtis A. Granger joined the Company in 1976 and was promoted to his
current position in July of 1998. Mr. Granger is primarily responsible for
managing customer relationship with major airlines. Prior to Mr. Granger's
promotion to his current position, he served as the Company's Director of Sales
and Customer Service from October 1994 to July of 1998 and as Manager of Sales
and Service from August 1991 to October 1994.

Robert D. Sellas, Jr. joined the Company in 1986 and was promoted to his
current position in 1998. Mr. Sellas is responsible for business development,
branding, promotions, and marketing initiatives. Prior to Mr. Sellas' promotion
to Vice President-Marketing, he served as the Company's Director of Marketing
and Sales from 1994 to 1998 and as a Station Manager from 1990 to 1994.

Silvio Tano joined the Company in 1974 and was promoted to Vice President,
Ground Services for ASIG in June 1999. Mr. Tano is primarily responsible for
integration of ASIG's recent acquisition, Elsinore LP, plus other pending growth
pursuits in ground services.

Terry Rinehart joined the Company in 1972 and was promoted to Vice
President Human Resources and Industrial Relations in June 2000. Mr. Rinehart is
primarily responsible for Human Resources and Labor relations.

Jay R. Levine became a Director of Ranger and the Company upon the
consummation of the Acquisition. Since 1997, Mr. Levine has served as a Managing
Director of CIBC. From 1996 to 1997, Mr. Levine was President of PPMJ, Inc., a
private consulting firm that advised its clients on private equity investments.
From 1990 to 1996, Mr. Levine was a senior executive in the Morningside and
Springfield Group, a private investment company. Mr. Levine is a director of
Consolidated Advisors Limited, L.L.C., Heating Oil Partners, L.P. and Evercom,
Inc. Mr. Levine received a bachelors degree from Syracuse University, a JD
degree from Tulane University and an LLM in taxation from New York University.

Edward Levy became a Director of Ranger and the Company upon the
consummation of the Acquisition. Mr. Levy has been a Managing Director of an
affiliate of CIBC since 1995. Between 1991 and 1995, Mr. Levy held various
positions at The Argosy Group, L.P., culminating in the position of Managing
Director. Mr. Levy has also held positions in the Mergers and Acquisitions Group
of Drexel Burnham Lambert Incorporated and the Corporate Finance Department of
Kidder, Peabody & Co., Incorporated. Mr. Levy is also a director of Heating Oil
Partners, L.P., Norcross Safety Products, L.L.C., DSMax International, Inc. and
High Voltage Engineering Corporation. Mr. Levy is a graduate of Connecticut
College.

S. Mark Ray became a Director of Ranger and the Company upon the
consummation of the Acquisition. Mr. Ray is Managing Director at John Hancock
Mutual Life Insurance Company, where he manages a $2.0 billion transportation
portfolio for the Bond and Corporate Finance Group. Before joining John Hancock
Mutual Life Insurance Company in 1978, Mr. Ray was a United States Air Force
pilot candidate, as well as a civilian aviator. Leaving active duty in 1977, but

continuing service with the Air Force Reserves, he worked on the marketing and
operations staff of the Kansas City Southern Railway Company for a year in
Dallas. As an inactive ready-reservist, Mr. Ray achieved the rank of Captain and
in 1987, after completing his service commitment, he received his Honorable
Discharge. Mr. Ray received a bachelor's degree from Texas Tech University in
1975.

Item 11. Executive Compensation

The following table sets forth information regarding the compensation paid
or accrued by the Company to the Chief Executive Officer and each of the five
other most highly compensated executive officers of the Company in fiscal 2001,
2000 and 1999 (collectively, the "Named Executive Officers") for services
rendered to the Company in all capacities during fiscal years 2001, 2000 and
1999.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------------- ----------------------------------
AWARDS PAYOUTS
------------------------ --------
SECURITIES
OTHER RESTRICTED UNDERLYING
NAME AND ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
PRINCIPAL SALARY BONUS COMPENSATION AWARDS SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) ($) ($) ($)
- ------------------------------- ---- -------- ------- ------------- ----------- ----------- -------- -------------

2001 295,288 -- -- 29,800 (2)
Stephen D. Townes (1) 2000 283,373 10,000 5,515 30,749 (3)
Chief Executive Officer 1999 275,000 -- -- 12,375 (4)

Dr. George W. Watts (5) 2001 250,200 - -- 27,374 (6)
Executive Vice President 2000 232,461 8,000 2,546 26,257 (7)
And Secretary 1999 212,000 -- -- 11,670 (8)

Jeffrey P. Hartman (9) 2001 179,813 -- -- 46,618 (10)
Senior Vice President and 2000 105,208 5,500 636 18,412 (11)
Chief Financial Officer

John W. Gassett 2001 194,547 -- -- 23,672 (12)
Senior Vice President ASIG 2000 169,167 8,000 -- 4,065 (13)
North America 1999 140,000 9,500 415 6,462 (14)

Paul Jefferson
Senior Vice President and 2001 141,225 7,769 -- 33,490 (15)
Managing Director ASIG 2000 143,929 7,000 -- 28,604 (16)
Europe 1999 137,648 7,300 385 20,373 (17)

Jim Ferrara (18) 2001 206,050 -- -- 5,234 (19)
Vice President of Quality and 2000 152,799 6,000 -- 7,747 (20)
Engineering and CIO 1999 20,307 -- 356 --

<FN>
(1) Mr. Townes became Chief Executive Officer of the Company effective March
31, 1998.

(2) Reflects $6,911 for Company 401(k) matching contributions, $4,800 for
disability premiums, $1,140 for group term life insurance and $17,036 of
Board-approved unused vacation pay.

(3) Reflects $10,000 Company 401(k) matching contributions, $1,140 for group
term life insurance, and $19,609 of Board-approved unused vacation pay.

(4) Reflects $10,000 Company 401(k) matching contributions and $2,375 for group
term life insurance.

(5) Dr. Watts became an Executive Vice President of the Company effective April
2, 1998.

(6) Reflects $7,147 for Company 401(k) matching contributions, $4,653 for
disability premiums, $1,140 for group term life insurance, and $14,435 of
Board-approved unused vacation pay.

(7) Reflects $10,000 Company 401(k) matching contributions, $1,140 for group
term life insurance, and $15,117 of Board-approved unused vacation pay.

(8) Reflects $10,000 Company 401(k) matching contributions and $1,670 for group
term life insurance.

(9) Mr. Hartman became Chief Financial Officer of the Company effective August
3, 1999.

(10) Reflects $5,447 for Company 401(k) matching contributions, $899 for group
term life, $11,786 of Board approved unused vacation pay, and $28,487 for
relocation reimbursement.

(11) Reflects $6,000 signing bonus, $629 for group term life insurance, and
$11,783 in relocation reimbursement.

(12) Reflects $7,448 for Company 401(k) matching contributions, $1,098 for group
term life, and $15,125 for auto allowance.

(13) Reflects $1,969 Company 401(k) matching contributions, $1,257 for group
term life insurance and $840 for auto allowance.

(14) Reflects $4,500 Company 401 (k) matching contributions and $1,962 for group
term life insurance.

(15) Reflects $14,122 of Company Pension (UK) contributions and $19,368 for
automotive reimbursement.

(16) Reflects $14,366 of Company Pension (U.K.) contributions and $6,608 for the
use of a Company automobile.

(17) Reflects $13,765 of Company Pension (U.K.) contributions and $6,608 for the
use of a Company automobile.

(18) Mr. Ferrara became Vice President of Quality and Engineering and CIO
effective January 15, 1999.

(19) Reflects $4,673 for Company 401(k) matching contributions and $560 for
group term life insurance.

(20) Reflects $7,622 for Company 401(k) matching contributions and $126 for
group term life insurance.

Options Grants and Exercises

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

OPTION/SAR GRANTS IN LAST FISCAL YEAR

POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM
------------------------------------ ----------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES EXERCISE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#) (1) YEAR ($/SH) DATE 5% ($) (2) 10% ($) (2)
- ---- ------------- ---------- --------- ---------- ---------- ----------

N/A

<FN>

(1) In order to prevent dilution or enlargement of rights under the options, in
the event of a reorganization, recapitalization, stock split, stock
dividend, or combination or other change in the Class B Common Stock of
Ranger, the type and number of shares available upon exercise and the
exercise price may be adjusted accordingly.

(2) Amounts reflect assumed rates of appreciation from the fair market value on
the date of grants as set forth in the SEC's executive compensation
disclosure rules. Actual gains, if any, on stock option exercises depend on
future appreciation of the Class B Common Stock of Ranger Aerospace
Corporation. No assurance can be made that the amounts reflected in these
columns will be achieved.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES VALUE OPTIONS/SARS AT OPTIONS/SARS AT FISCAL
ACQUIRED ON REALIZED FISCAL; YEAR END (#) YEAR END ($)
NAME EXERCISE(1) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----------------------------- ------------ --------- -------------------------- ---------------------------

Stephen D. Townes
Chief Executive Officer - - 2,596/2,919 $ 0/$0

George W. Watts
Executive Vice President and
Secretary - - 848/1,698 $ 0/$0

Jeffrey P. Hartman
Executive Vice President and
Chief Financial Officer - - 212/424 $ 0/$0

John W. Gassett
Senior Vice President-ASIG
North America - - 194/325 $ 0/$0

Paul Jefferson
Senior Vice President and
Managing Director-ASIG
Europe - - 180/301 $ 0/$0

Jim Ferrara
Vice President of Quality and
Engineering and CIO
________________________ - - 166/261 $ 0/$0

<FN>
(1) As of the end of the fiscal year, none of the options held by the Named Executive Officers had been
exercised.

Compensation of Directors

Generally, the Directors of the Company will not be paid for their services
on the Board. Directors are reimbursed for out-of-pocket expenses incurred in
connection with attending Board meetings. The Company has entered into an
agreement with Tioga Capital Corporation ("Tioga") pursuant to which Tioga will
receive a fee during the period which Mr. Schwartz serves as Chairman of the
Board. Mr. Schwartz is the President of Tioga. See "Item 13. Certain
Relationships and Related Transactions -- Chairman Agreement."

Compensation Committee Interlocks and Insider Participation

The Company currently does not have a compensation committee. The
compensation of the executive officers of the Company is determined by the
Board.

Employment Agreements

Messrs. Townes and Watts have each entered into an employment agreement
with the Company, which was amended effective as of March 7, 2000 and again
effective as of August 31, 2000, and Mr. Hartman entered into an employment
agreement with the Company on August 31, 2000 (each, an "Employment Agreement").
The Employment Agreements provide for the employment, unless terminated earlier
as provided in the respective Employment Agreement, of (i) Mr. Townes as the
President and Chief Executive Officer until March 31, 2003, and (ii) Mr. Watts
as Executive Vice President until March 31, 2003, and (iii) Mr. Hartman as
Senior Vice President and Chief Financial Officer until August 1, 2002. The
Employment Agreement of Mr. Townes provides for an annual base salary of

$275,000, the Employment Agreement of Mr. Watts provides for an annual base
salary of $212,000, and the Employment Agreement of Mr. Hartman provides for an
annual base salary of $150,000. In addition, each Employment Agreement provides:
(i) for the base salary to increase based on the Consumer Price Index; (ii) an
annual bonus to be determined by the Board of Directors of the Company; and
(iii) health benefits, life and disability insurance, participation in the
Company's retirement plan(s) and customary fringe benefits and vacation periods.

Each Employment Agreement may be terminated by the Company at any time with
or without Cause. Each Employment Agreement defines "Cause" to mean any of the
following acts: (i) theft or embezzlement, or attempted theft or embezzlement,
of money or property of the Company or any of its subsidiaries, perpetration or
attempted perpetration of fraud, or participation in a fraud or attempted fraud,
on the Company or any of its subsidiaries or unauthorized appropriation of, or
attempt to misappropriate, any substantial tangible or intangible assets or
property of the Company or any of its subsidiaries, (ii) conviction of any
criminal felony involving the Company or any of its subsidiaries, or (iii)
willful failure to substantially follow any reasonable instructions of the Board
and/or other policies of the Company, which failure is not corrected within 15
business days after receipt of notice from the Board describing such failure.

Messrs. Townes, Watts and Hartman may also choose to terminate employment
with the Company by reason of a Constructive Termination. "Constructive
Termination" means (i) a reduction of base salary, (ii) the assigning of any
duties inconsistent with duties first described in the respective Employment
Agreement, or (iii) a substantial breach by the Company of any term of (w) their
Employment Agreement (x) agreements pertaining to their acquisition stock of the
Company, (y) their Non-Qualified Stock Option Agreement, (z) the Securityholders
Agreement or any amendment or successor to any of the foregoing agreements,
which breach has a material adverse effect on the executive and which is not
cured within 15 days of receipt of notice to the Company of such breach. With
respect to Messrs. Townes and Watts, "Constructive Termination" also includes
the event that the executive is required by the Company to permanently relocate
his primary residence and decides to move his family to such new residence.

If the employment of either Mr. Townes or Mr. Watts is terminated for any
reason other than (i) a termination by the Company for Cause or (ii) a
termination by Mr. Townes that is not a Constructive Termination, Mr. Townes
will receive severance compensation equal to 24 months base salary and current
health benefit coverage paid in monthly installments. If the employment of Mr.
Hartman is terminated for any reason other than (i) a termination by the Company
for Cause or (ii) a termination by Mr. Hartman that is not a Constructive
Termination, Mr. Hartman will receive 12 months salary and current health
benefit coverage paid in monthly installments. The Employment Agreements of Mr.
Townes and Mr. Watts provide that if the Company requires either of them to
relocate their permanent residence, the Company will pay any relocation
expenses, will grant an increase in annual salary ($75,000 for Mr. Townes and
$56,250 for Mr. Watts), and will grant additional options to them for common
stock representing 3/8% of the then outstanding common stock of the Company with
an exercise price of $100 per share.

Mr. Townes' and Mr. Watts' Employment Agreements provide that if either of
them elects to terminate his employment for any reason within twelve months of a
Change-in-Control and he is not entitled to severance compensation as described
in the preceding paragraph, he will receive severance compensation equal to 12
months base salary and current health benefit coverage paid in monthly
installments. Mr. Hartman's Employment Agreement provides that if he elects to
terminate his employment for any reason within twelve months of a
Change-in-Control and he is not entitled to severance compensation as described
in the preceding paragraph, he will receive severance compensation equal to 9
months base salary and current health benefit coverage paid in monthly
installments. In all three cases, this severance compensation is subject to
mitigation in the event the executive obtains employment during the period in
which such compensation would be paid. "Change in Control" means the occurrence
of any one or more of the following events: (i) any person other than certain
permitted holders becomes the beneficial owner of 50% or more of the total
voting or economic power of the Company's or Ranger's common stock, (ii) any
person other than certain permitted holders becomes the beneficial owner of more
than 33-1/3% of the voting power of common stock of the Company or Ranger and
the permitted holders beneficially own a lesser percentage and do not have the
right to designate a majority of the board of directors of the Company or

Ranger, as applicable, (iii) a merger or consolidation of the Company or Ranger
in which the Company or Ranger is not the survivor and the holders of the
Company's or Ranger's common stock prior to such merger or consolidation do not
own a majority of the common stock of the survivor, (iv) a sale of substantially
all of the assets or the Company or Ranger, or (v) during any two year period
the members of the board of directors of the Company or Ranger at the beginning
of such period or their chosen successors are no longer a majority of such board
at the end of such period.

Mr. Townes' and Mr. Watts' Employment Agreements provide that in the event
of certain private placements of Ranger securities, the employee may purchase
securities in such private placements to prevent dilution which purchases may be
financed with loans from Ranger of up to approximately $369,000 with respect to
Mr. Townes and $99,000 with respect to Mr. Watts.

The Employment Agreements of Messrs. Townes, Watts and Hartman contain
non-competition, non-solicitation and no-hire provisions that prohibit them
from competing with the Company during the period of their employment and for
set periods thereafter and from interfering with the customer relationships and
hiring the employees of the Company for set periods after the termination of
their employment. These provisions apply to Messrs. Townes and Watts for a
period of 18 months after the termination of their employment. These provisions
apply to Mr. Hartman for so long after his employment terminates and he is
receiving severance pay from the Company (which can be for as long as 12
months).

1999 Stock Option Plan

The Board of Directors of Ranger has approved the Ranger Aerospace
Corporation 1999 Stock Option Plan ("1999 Option Plan"), which authorizes the
granting of stock options to acquire shares of Ranger's Class B Common Stock to
current or future executive officers and key employees of Ranger or its
subsidiaries. The 1999 Option Plan authorizes the granting of stock options up
to an aggregate of 1,000,000 shares of Ranger's Class B Common Stock, subject to
adjustment upon the occurrence of certain events to prevent any dilution or
expansion of the rights of participants that might otherwise result from the
occurrence of such events.

Options to purchase an aggregate of 1,564, 636 and 13,601 shares of
Ranger's Class B Common Stock were granted (461, 380 and 85, respectively have
been cancelled) during fiscal 2001, 2000 and 1999. An aggregated 3,213 of these
granted options are vestable to Messrs. Townes, Watts and Hartman if certain
market value and liquidity requirements are satisfied in connection with a sale
of Ranger or the Company. Other than these 3,213 options, one-third of the
shares subject to such options are subject to time vesting beginning on March
31, 1999 and ending on March 31, 2003. Two-thirds of the shares subject to such
options are subject to performance vesting beginning on March 31, 1999 and
ending on March 31, 2003. With respect to Mr. Townes' options, if he is
terminated by the Company without cause or if he quits for good reason, then
fifty percent (50%) of his unvested time and performance vesting options will
vest if the Company has met certain performance qualifications. Otherwise,
unvested options will terminate in the event that the optionee ceases to be
employed with the Company, and vested but unexercised options will terminate
immediately if the optionee is terminated for cause. With respect to all
optionees except for Messrs. Townes, Watts and Hartman, the vested but
unexercised options expire after 60 days if the optionee ceases to be employed
by the Company by reason of death, disability or retirement or after 30 days if
the employee is terminated other than for cause. With respect to Messrs.
Townes, Watts and Hartman, if such person is terminated for cause, Ranger and
certain of its significant stockholders have the right to repurchase any shares
issued under such person's option agreement for a per share price equal to the
per share exercise price of the option. With respect to other employees whose
employment by the Company ceases, Ranger and certain of its significant
stockholders have the right to repurchase any shares issued or issuable under
the employee's option agreement. Unvested options will immediately vest upon a
sale of Ranger meeting certain value thresholds. All of the options granted
have an exercise price of $100 per share, which the Company believes
approximates the fair market value of the Class B Common Stock on the date of
grant. With respect to each of Messrs. Townes, Watts and Hartman, "cause" and
"good reason" for purposes of his option agreement have similar definitions to
"Cause" and "Good Reason" in his Employment Agreement except that "good reason"
under his option agreement includes an election by the employee to terminate his
employment in connection with a "Change-in-Control" as defined in his Employment
Agreement.

All unvested options granted under the plan will automatically vest on
January 28, 2007.

Effective March 7, 2000, Ranger issued a warrant to purchase up to 1,474
shares of its Class B Common Stock to Tioga Capital Corporation ("Tioga"), an
affiliate of Mr. Schwartz. The warrant has an exercise price of $100 per share,
which the Company believes approximates the fair market value of the Class B
Common Stock on the date of grant. The warrant is vestable to Tioga if certain
market value and liquidity requirements are satisfied in connection with a sale
of Ranger or the Company. If Mr. Schwartz is terminated by Ranger for cause,
the warrant, to the extent not previously exercised, shall expire whether vested
and exercisable or not. If Mr. Schwartz is terminated for cause, Ranger and
certain of its significant stockholders have the right to repurchase any shares
issued under Tioga's warrant for a per share price equal to the per share
exercise price of the warrant.

Sale of Equity

In fiscal 2001, Ranger sold an aggregate of 2,028 shares of its Class B
Common Stock at a price of $100 per share and 306 shares of its Preferred Stock
at a price of $1,000 per share to Messrs. Townes, Watts, Hartman and Kraig
Danielson and to the Danielle Schwartz Trust, an affiliate of Mr. Schwartz. All
such shares were purchased with notes payable to Ranger secured by a pledge of
the stock purchased. Also in fiscal 2001, Ranger entered into amendments to
stock purchase agreements dated March 7, 2000 with Messrs. Townes and Watts
covering purchases of an aggregate of 1,520 shares of Ranger's Class B Common
Stock and 228 shares of Ranger's Preferred Stock providing that payment for the
stock purchased would be paid with a note payable to Ranger secured by the
pledge of the stock purchased instead of being paid in cash.

In fiscal 2000, Ranger sold 4,944 shares of its Class A Common Stock at a
price of $100 per share, 11,376 shares of its Class B Common Stock at a price
of $100 per share and 2,448 shares of its Preferred Stock at a price of $1,000
per share to Ranger's original investors and Messrs. Townes and Watts.

In fiscal 1999, Ranger sold 844 shares of its Class B Common Stock at a
price of $100 per share and 123 shares of its Preferred Stock at a price of
$1,000 per share to a number of its key employees. Each purchaser of these
shares entered into an executive stock agreement with Ranger which, among other
things, restricts the transfer of such securities, grants Ranger and certain
significant stockholders the right to repurchase such shares upon the employee's
termination and requires the employee to consent to a sale of Ranger approved by
its Board and the holders of a majority of its common stock.

401(k) Profit Sharing Plan

The Company has a 401(k) plan for the benefit of substantially all of its
non-union employees, which is qualified for tax exempt status by the Internal
Revenue Service. Employees can make contributions to the plan up to the maximum
amount allowed by federal tax code regulations.

Item 12. Security Ownership of Certain Beneficial Owners and Management

All of the equity of the Company is owned by Ranger. The following table
sets forth certain information regarding the beneficial ownership of the equity
securities of Ranger by: (i) each of the Directors of Ranger and the Named
Executive Officers; (ii) all Directors and executive officers as a group; and
(iii) each owner of more than 5% of any class of equity securities of Ranger
("5% Owners"). Ranger currently has 42,433 shares of Class A Common, 89,578
shares of Class B Common (including 6,404 shares subject to currently
exercisable options) and 17,341.9 shares of Preferred Stock issued and
outstanding. Unless otherwise noted, the address for each Director and executive
officer is c/o Ranger Aerospace Corporation, 7600 Pelham Centre, Greenville,
South Carolina 29615-3170.

CLASS A COMMON CLASS B COMMON PREFERRED
---------------- ----------------- -----------------
STOCK

Name and Address of Beneficial Owner Number Percent Number Percent Number Percent

Directors and Named Executive Officers:
George B. Schwartz (a) 5,964.8 14.06% 1,022 1.15% 154 0.89%
Stephen D. Townes (b) 2,663.0 6.28% 3,831 (c) 4.30% 185 1.07%
George W. Watts -- 0.00% 1,684 (d) 1.89% 126 0.73%
Jeffrey P. Hartman -- 0.00% 412 (e) 0.46% 30 0.17%
John W. Gassett -- 0.00% 294 (f) 0.33% 15 0.09%
Paul Jefferson -- 0.00% 280 (g) 0.31% 15 0.09%
Jim Ferrara -- 0.00% 266 (h) 0.30% 15 0.09%
Edward Levy (i) 22,048.4 51.96% 13,430 15.07% 5,321.8 30.76%
S. Mark Ray (j -- 0.00% 65,456 73.47% 9,818.4 56.75%
Jay R. Levine (i) 22,048.4 51.96% 13,430 15.07% 5,321.8 30.76%
All Directors and Executive Officers as a
Group (19 persons) 42,433.0 72.29% 87,813 98.56% 15,750.7 91.04%

5% OWNERS:
John Hancock Mutual Life Insurance
Company (k) -- 0.00% 65,456 73.47% 9,818.4 56.75%
Canadian Imperial Bank of Commerce (l) 22,048.4 51.96% 13,430 15.07% 5,321.8 30.76%
Randolph Street Partners II (m) 5,678.0 13.38% -- 0.00% 865.2 5.05%
Gregg L. Engles (n) 4,497.6 10.60% -- 0.00% 674.6 3.93%
Danielle Schwartz Trust , UAD 10/1/93 (o) 5,964.8 14.06% 1,022 1.15% 154.0 0.89%

___________________________________________
<FN>
(a) Includes 5,694.8 shares of Class A Common, 1,022 shares of Class B Common
and 154 shares of Preferred Stock owned by the Danielle Schwartz Trust, UAD
10/1/93. Mr. Schwartz does not have beneficial ownership in, or control
over, the Danielle Schwartz Trust.
(b) Includes 2,663 shares of Class A Common currently being transferred from
Mr. Townes to the Townes Family Trust. Mr. Townes does not have beneficial
ownership in, or control over, the Townes Family Trust.
(c) Includes 2,596 shares that may be acquired through stock options
exercisable within 60 days of March 31, 2001.
(d) Includes 848 shares that may be acquired through stock options exercisable
within 60 days of March 31, 2001.
(e) Includes 212 shares that may be acquired through stock options exercisable
within 60 days of March 31, 2001.
(f) Includes 194 shares that may be acquired through stock options exercisable
within 60 days of March 31, 2001.
(g) Includes 180 shares that may be acquired through stock options exercisable
within 60 days of March 31, 2001.
(h) Includes 166 shares that may be acquired through stock options exercisable
within 60 days of March 31, 2001.
(i) Includes 22,048 shares of Class A Common, 13,430 shares of Class B Common
and 5,322 shares of Preferred Stock beneficially owned by CIBC. Such person
disclaims beneficial ownership of all such shares. Such person's address is
c/o CIBC, 425 Lexington Avenue, New York, New York 10017.

(j) Includes 65,456 shares of Class B Common and 9,818 shares of Preferred
Stock beneficially owned by John Hancock Mutual Life Insurance Company.
Such person disclaims beneficial ownership of all such shares. Such
person's address is c/o John Hancock Mutual Life Insurance Company, John
Hancock Place, Box 111, Boston, Massachusetts 02117.
(k) Such person's address is John Hancock Place, Box 111, Boston, Massachusetts
02117.
(l) Such person's address is 161 Bay Street, 8th Floor, BCE Place; PP Box 500
MSJ 258, Toronto, Canada. Each of Messrs. Jay Bloom, Andrew Heyer and Dean
Kehler (each of who are employees of an affiliate of CIBC) may be viewed as
sharing beneficial ownership of such shares.
(m) Such person's address is 200 East Randolph Drive, Suite 5400, Chicago,
Illinois 60601.
(n) Such person's address is 3811 Turtle Creek Road, Dallas, Texas 75219
(o) Such person's address is c/o Ranger Aerospace Corporation, 7600 Pelham
Centre, Greenville, South Carolina 29615-3170.

Item 13. Certain Relationships and Related Transactions

Securityholders Agreement

Ranger, John Hancock Mutual Life Insurance Company ("Hancock") and its
affiliates, affiliates of CIBC, the Danielle Schwartz Trust, Mr. Townes, Dr.
Watts, Randolph Street Partners II and Gregg L. Engles have entered into a
Securityholders Agreement dated April 1, 1998 and amended effective March 7,
2000 (the "Securityholders Agreement"). The Securityholders Agreement requires
that each of the parties thereto vote all of his or its Ranger voting securities
and take all other necessary or desirable actions to cause the size of the Board
of Ranger to be established at six members and to cause the election to the
Board of Ranger of two representatives designated by Hancock and its affiliates
(the "Hancock Designees"), two representatives designated by such affiliates of
CIBC (the "CIBC Designees") and two executive officers jointly designated by
such affiliates of CIBC and Hancock and its affiliates (the "Executive
Directors"). Mr. Schwartz and Mr. Townes will each serve as an Executive
Director, so long as such person is an officer of the Company and Ranger until
their earlier resignation or removal. Any representative on the Board of Ranger
may be removed from the Board of Ranger only at the request of the party that
designated such representative. The Board of the Company is established by the
Board of Ranger, provided that Mr. Schwartz will serve as a Director of the
Company. The right of Hancock and its affiliates and such affiliates of CIBC to
designate representatives to the Board of Ranger will terminate at such time as
such party owns less than 50% of the common stock, Preferred Stock and/or PIK
Notes held by such party as of the Acquisition closing date. The right of Mr.
Townes to be elected as a member of the Board of Ranger will terminate at such
time as he owns less than 50% of the shares of common stock purchased under the
Executive Stock Agreement (as defined herein), or earlier in the event he ceases
to be an officer of the Company and Ranger. The right of Mr. Schwartz to be
elected as a member of the Board of Ranger will terminate at such time as the
Danielle Schwartz Trust owns less than 50% of the shares of common stock it
purchased under the Investor Stock Agreement (as defined herein), or earlier in
the event Mr. Schwartz ceases to be Chairman of the Company and Ranger pursuant
to the Chairman Agreement (as defined herein). The provisions of the
Securityholders Agreement relating to the composition of the Board of Ranger
will terminate on the earlier to occur of (i) the tenth anniversary of the
Acquisition unless extended by holders of 75% of the voting securities subject
to the Securityholders Agreement or (ii) upon a Qualified Public Offering (as
defined herein).

In addition to the foregoing, the Securityholders Agreement (i) requires
the holders of securities of Ranger to obtain the prior written consent of
Ranger in some circumstances prior to transferring any securities of Ranger;
(ii) grants in connection with the sale of securities of Ranger certain
preemptive rights with respect to such sale, first to other holders of
securities of Ranger, then to Ranger; (iii) grants the holders of securities of
Ranger certain participation rights in connection with certain transfers made by
other holders of securities of Ranger; and (iv) requires all holders of Ranger
securities who are parties to the Securityholders Agreement to consent to and
participate in a sale of the business of Ranger to an independent third party
(whether by way of a sale of stock, sale of assets, merger, recapitalization or
otherwise) if such sale is approved by such affiliates of CIBC and Hancock and
its affiliates (provided that such affiliates of CIBC and Hancock and its
affiliates each hold not less than 50% of the Ranger securities held by such
party as of the Acquisition closing date) and the Board of Ranger. The
agreements set forth in (i) to (iii) above terminate with respect to each
security of Ranger upon the earlier of the date on which such security has been
transferred in a public sale or the consummation of a public offering of $35

million or more of Ranger's equity securities in which the per share price of
the common stock of Ranger is no less than four times its price as of the date
of the Acquisition (a "Qualified Public Offering"). The agreement set forth in
(iv) above terminates with respect to each interest in Ranger upon the
consummation of a Qualified Public Offering.

The Securityholders Agreement also provides that the Preferred Stock and
PIK Notes (as defined herein) issued under the Securities Purchase Agreement
will rank pari passu in the event of any liquidation, dissolution or winding-up
of Ranger, and that holders of PIK Notes will use their reasonable efforts to
provide the holders of Preferred Stock representation on any creditors'
committee established for the benefit of the holders of PIK Notes. A similar
provision is contained in the Share Purchase Agreement (as defined herein).

In addition, without the consent of both the CIBC Designees and the Hancock
Designees, Ranger may not: (i) issue or authorize the issuance of any equity
securities or any securities convertible into equity securities in excess of
2,500 shares of Ranger common stock; (ii) consolidate or merge with, or sell all
of substantially all of its assets to, any other person; (iii) permit any of its
subsidiaries to issue any equity securities to any person other than Ranger or
one of Ranger's direct or indirect wholly-owned subsidiaries; (iv) acquire any
interest in any business for an aggregate consideration in excess of $1.0
million; or (v) amend any provision of Ranger's certificate of incorporation.

Rights Agreement

Ranger, Hancock and its affiliates, affiliates of CIBC, Randolph Street
Partners II, Gregg L. Engles and the Danielle Schwartz Trust have entered into a
Rights Agreement (the "Rights Agreement"). Under the Rights Agreement, the
holders of shares of Ranger common stock originally issued to Hancock and to
affiliates of CIBC have the right at any time, subject to certain conditions, to
require Ranger to register any or all of their common stock in Ranger under the
Securities Act on Form S-1 or Form S-2 (a "Long-Form Registration") on two
occasions and on Form S-3 (a "Short-Form Registration") on unlimited occasions,
and all holders of registrable securities of Ranger have the right to request
that such securities be included in any such Long-Form or Short-Form
Registration, subject to pro rata reductions if required by the managing
underwriter. In addition, all holders of registrable securities of Ranger are
entitled to request the inclusion of such securities in any registration
statement at Ranger's expense whenever Ranger proposes to register any of its
securities under the Securities Act (a "Piggyback Registration"). Ranger shall
pay all registration expenses in connection with each Long-Form, Short-Form and
Piggyback Registration. Holders of registrable securities of Ranger are
prohibited from effecting a public sale of such securities seven days prior to
and 90 days after the effective date of any Long-Form, Short-Form or
underwritten Piggyback Registration. Ranger is prohibited from effecting a
public sale of its equity securities on its own behalf during the seven days
prior to and 120 days after the effective date of any Long-Form, Short-Form or
underwritten Piggyback Registration. In connection with such registrations,
Ranger has agreed to indemnify all holders of registrable securities against
certain liabilities, including liabilities under the Securities Act.

Executive Stock Agreements

Messrs. Townes, Watts and Hartman have each entered into Executive Stock
Agreements with Ranger (each an "Executive Stock Agreement"). Pursuant to the
first Executive Stock Agreement for Mr. Townes (which was amended effective as
of March 7, 2000), Mr. Townes purchased 2,663 shares of Class A Common at a
price of $100 per share and such stock was paid for with a promissory note. This
promissory note is secured by a pledge of all of shares of Class A Common Stock
purchased by Mr. Townes under the Executive Stock Agreement and is recourse to
Mr. Townes for 25% of the original principal amount of and accrued interest
under the promissory note. All of the stock purchased by Mr. Townes was
originally subject to vesting but is now fully vested as of March 7, 2000. Mr.
Townes entered into a Second Executive Stock Agreement dated March 7, 2000, as
amended by an amendment dated August 31, 2000, pursuant to which he purchased
800 shares of the Company's Class B Common Stock for $100 per share and 120
shares of Preferred Stock for $1,000 per share and such stock was paid for with
a promissory note. This promissory note is secured by a pledge of all of shares
of Class B Common Stock and Preferred Stock purchased by Mr. Townes under the
Second Executive Stock Agreement and is recourse to Mr. Townes for 25% of the

original principal amount of and accrued interest under the promissory note. Mr.
Townes entered into a Third Executive Stock Agreement dated August 31, 2000,
pursuant to which he purchased 435 shares of the Company's Class B Common Stock
for $100 per share and 65 shares of Preferred Stock for $1,000 per share and
such stock was paid for with a promissory note. This promissory note is secured
by a pledge of all of shares of Class B Common Stock and Preferred Stock
purchased by Mr. Townes under the Third Executive Stock Agreement and is
recourse to Mr. Townes for 25% of the original principal amount of and 100% of
the accrued interest under the promissory note.

Pursuant to the first Executive Stock Agreement for Dr. Watts dated March
7, 2000 and amended by an amendment dated August 31, 2000, Dr. Watts purchased
720 shares of the Company's Class B Common Stock and 108 shares of Preferred
Stock for $1,000 per share and such stock was paid for with a promissory note.
This promissory note is secured by a pledge of all of the shares of Class B
Common Stock and Preferred Stock purchased by Dr. Watts under his first
Executive Stock Agreement and is recourse to Dr. Watts for twenty-five percent
(25%) of the original principal amount of and accrued interest under the
promissory note. Dr. Watts entered into a Second Executive Stock Agreement
dated August 31, 2000, pursuant to which he purchased 116 shares of the
Company's Class B Common Stock for $100 per share and 18 shares of Preferred
Stock for $1,000 per share and such stock was paid for with a promissory note.
This promissory note is secured by a pledge of all of shares of Class B Common
Stock and Preferred Stock purchased by Dr. Watts under the Second Executive
Stock Agreement and is recourse to Dr. Watts for 25% of the original principal
amount of and 100% of the accrued interest under the promissory note.

Pursuant to Mr. Hartman's Executive Stock Agreement, dated August 31, 2000,
Mr. Hartman purchased 200 shares of the Company's Class B Common Stock and 30
shares of Preferred Stock for $1,000 per share and such stock was paid for with
a promissory note. This promissory note is secured by a pledge of all of the
shares of Class B Common and Preferred purchased by Mr. Hartman under his
Executive Stock Agreement and is recourse to Mr. Hartman for 25% of the original
principal amount of and 100% of the accrued interest under the promissory note
pursuant to his Executive Stock Agreement.

In the event of a termination of Mr. Townes' employment for any reason, a
portion of the stock in Ranger held by Mr. Townes or his successors and assigns
shall be subject to repurchase by Ranger. In the event of the termination of Mr.
Townes' employment for a reason other than: (i) death or disability; (ii) a
termination by the Company for "Cause"; or (iii) a termination by Mr. Townes
that is not a "Constructive Termination," Mr. Townes may require Ranger to
repurchase a portion of the interests Mr. Townes holds therein. In addition,
none of Messrs. Townes, Watts or Hartman may transfer the stock purchased under
his Executive Stock Agreement(s) except in certain limited circumstances as
provided in his Executive Stock Agreement(s), or in the case of Messrs. Townes
and Watts, pursuant to the Securityholders Agreement. See "--Securityholders
Agreement."

Investors Stock Agreement

The Danielle Schwartz Trust has entered into an Investor Stock Agreement
dated April 2, 1998, amended by an amendment dated March 7, 2000 (the "First
Investor Stock Agreement") with Ranger pursuant to which it purchased 5,964.8
shares of Class A Common at a price of $100 per share and such stock was paid
for with a promissory note. This promissory note is secured by a pledge of all
of the shares of Class A Common Stock purchased under the First Investor Stock
Agreement and is recourse to the Danielle Schwartz Trust for 25% of the original
principal amount of and accrued interest under the promissory note. Under the
First Investor Stock Agreement, in the event that Mr. Schwartz is terminated for
"Cause" as Chairman (as such terms are defined in the Chairman Agreement),
Ranger shall have the option to repurchase all of the interests in Ranger held
by the Danielle Schwartz Trust. In addition, the Danielle Schwartz Trust may not
transfer the interests it holds in Ranger without the consent of the Board of
Ranger or pursuant to the Securityholders Agreement. See "--Securityholders
Agreement." The First Investor Stock Agreement provides that in the event of
certain private placements of Ranger securities, the Danielle Schwartz Trust may
purchase securities in such private placements to prevent dilution which
purchases may be financed with loans from Ranger of up to approximately
$826,000.

The Danielle Schwartz Trust entered into a Second Investor Stock Agreement
with Ranger, dated August 31, 2000 (the "Second Investor Stock Agreement")
pursuant to which it purchased 1,022 shares of Class B Common Stock for $100 per
share and 154 shares of Preferred Stock for $1,000 per share and such stock was
paid for with a promissory note. This promissory note is secured by a pledge of
all of the shares of Class B Common Stock and Preferred Stock purchased under
the Second Investor Stock Agreement and is recourse to the Danielle Schwartz
Trust for 25% of the original principal amount of and 100% of the accrued
interest under the promissory note. The Danielle Schwartz Trust may not
transfer the stock purchased under the Second Investor Stock Agreement except in
certain limited circumstances as provided in the Second Investor Stock Agreement
or the Securityholders Agreement. See "-Securityholders Agreement."

Chairman Agreement

Tioga, Ranger, the Company and Mr. Schwartz have entered into a Chairman
Agreement (the "Chairman Agreement") pursuant to which Mr. Schwartz will serve
as the Chairman of Ranger and the Company until April 2, 2001 (such period will
be automatically extended for additional terms of one year unless the Board of
Ranger takes action to terminate such extension), unless terminated earlier as
provided in the Chairman Agreement. Such period has been automatically extended
to April 2, 2002. The Chairman Agreement provides that Tioga will receive a
$150,000 annual base fee (subject to annual increases based on the consumer
price index) and that Mr. Schwartz will receive health benefits and life and
disability insurance. In addition, Tioga will receive a bonus of $1,350,000 if
the Company satisfies certain market value and liquidity requirements in
connection with a sale of the business of Ranger or the Company or a public
offering of equity securities of Ranger. The Company believes that the terms of
the Chairman Agreement are at least as favorable to the Company as those which
could be obtained from an unrelated party.

Non-competition provisions of the Chairman Agreement prevent Mr. Schwartz
from engaging in any business in competition with the Company for a period of 18
months after any termination or for 12 months after termination as director
without Cause in countries where the Company conducts business as of the date of
such termination.

Mr. Schwartz may be terminated as the Chairman at any time with or without
Cause. The Chairman Agreement defines "Cause" to mean any of the following acts:
(i) the commission of a felony or a crime involving moral turpitude (as
determined by the Board of the Company in its good faith judgment) or any
indictment for a felony or crime involving moral turpitude; (ii) the commission
of any other act or omission involving dishonesty, disloyalty or fraud with
respect to Ranger or any of its subsidiaries or any of their customers or
suppliers; (iii) conduct tending to bring Ranger or any of its subsidiaries into
substantial public disgrace or disrepute; (iv) failure to perform duties as
reasonably directed by the Board of Ranger which failure is not cured within 15
days after written notice thereof; (v) gross negligence or willful misconduct
with respect to Ranger or any of its subsidiaries; or (vi) any other material
breach of the Chairman Agreement which is not cured within 15 days after written
notice thereof. If Mr. Schwartz is terminated as the Chairman for any reason
other than for Cause, Tioga will receive the base fee for one year thereafter.

Fee Letter

In connection with the Acquisition, the Company paid Tioga the sum of
$850,000 pursuant to a certain fee letter in consideration for services rendered
by Tioga to the Company and Ranger. Mr. Schwartz is the president of Tioga. In
consideration for such payment, the Company and Ranger on one hand, and Tioga
and Mr. Schwartz on the other, along with certain other parties, agreed to
release each other from any claims, liabilities or obligations not arising from
gross negligence or willful misconduct with respect to the consummation of the
Acquisition.

Share Purchase Agreement

Pursuant to a Share Purchase Agreement (the "Share Purchase Agreement"),
Viad and Viad Service Companies, Limited, a United Kingdom limited liability
company (together with Viad, the "Sellers") agreed to sell all of the issued and
outstanding shares of capital stock or other equity interests of the entities

which comprised the ASIG business to Ranger. On April 1, 1998, the Company
completed the Acquisition for a purchase price of approximately $95 million in
cash; plus fees and expenses of approximately $4.1 million. The original
purchase price was subject to a purchase price adjustment in favor of the
Company for any shortfall in the net asset value, net working capital or
required cash (as such terms are defined in the purchase agreement) of the ASIG
business from the levels represented at the closing of the Acquisition. The
purchase price was also subject to adjustment in favor of Viad in an amount
equal to the amount of cash in the ASIG business at the closing of the
Acquisition in excess of the required cash. As a result of the purchase price
adjustments, the Company is due a purchase price settlement of $2.125 million
from Viad, which is shown in the Company's March 31, 2000 consolidated balance
sheet as a receivable. The Company and Viad disputed the amount of the purchase
price settlement. Both Viad and the Company submitted claims to an independent
arbitrator.

In early August 2000, the Company learned that it had prevailed in a
neutral auditor/arbitration process with respect to its claim for a purchase
price adjustment from Viad. As a result of this favorable ruling, the Company
received payment of $2,014,000 from Viad on August 28, 2000. The Company also
had additional indemnification claims against Viad. On August 28, 2000, the
Company settled and received $400,000 in payment for the additional
indemnification claims.

Prior to the closing of the Acquisition, the Share Purchase Agreement was
amended by the Sellers and Ranger (the "Amendment"). In addition to certain
other matters addressed in the Amendment, Ranger assigned all of its rights and
obligations under the Share Purchase Agreement to the Company, with the
exception of its rights to acquire Aircraft Service, Ltd., a United Kingdom
limited liability company, which it assigned to ASIG Europe Ltd., a United
Kingdom limited liability company.

Noncompetition Agreement

The Sellers, Greyhound Dobbs Incorporated, a Delaware corporation
("Dobbs"), Ranger and the Company entered a non-competition agreement (the
"Non-competition Agreement"). Under the Non-competition Agreement, each of the
Sellers and Dobbs covenanted and agreed that it would not, in any geographical
location anywhere in the world, engage directly or indirectly, in any activity
which is competitive with the Company's business as of the date of the
Acquisition. In addition, each of Ranger and the Company covenanted and agreed
that it would not, in any geographical location anywhere in the world, engage
directly or indirectly, in the business of preparing and providing food and
beverage services for airline passengers, airline crews, support personnel and
airport personnel. The non-competition restrictions above terminate upon the
earlier of: (i) the date three years following the date of the Acquisition and
(ii) for restrictions that apply to Dobbs, Ranger and the Company, upon (a) the
Sellers' sale of any of the capital shares of Dobbs resulting in a divestiture
of control, (b) the sale of Ranger, (c) the sale by Ranger of any of the capital
shares of the entities comprising the ASIG business resulting in a divestiture
of control, or (d) the sale by Ranger or Dobbs of capital shares or
substantially all of the assets of any subsidiary, in which event such
restrictions shall terminate only with respect to the subsidiary being sold.

Securities Purchase Agreement

Pursuant to the Securities Purchase Agreement, Ranger authorized the
issuance and sale of the following securities: (i) $8,460,000 in aggregate
principal amount of 10.5% payment-in-kind notes (the "PIK Notes"); (ii) 6,000
shares of Preferred Stock; (iii) 29,862 shares of Class A Common; and (iv)
66,718 shares of Class B Common. Subject to the terms of the Securities Purchase
Agreement, Ranger agreed to sell, and Hancock, affiliates of CIBC, Randolph
Street Partners II and Gregg L. Engles (collectively, the "Purchasers") agreed
to purchase, the Securities.

The Securities Purchase Agreement contained customary provisions for such
agreements, including representations and warranties and affirmative covenants.
The Securities Purchase Agreement also granted the Purchasers the right to
purchase their pro rata share of any future issuances of Ranger common equity or
convertible securities other than in connection with certain public offerings.
The Securities Purchase Agreement also provided that the PIK Notes would have a

scheduled repayment date of March 31, 2010, and that Ranger may optionally repay
the PIK Notes before this date provided that Ranger also redeems the Preferred
Stock.

Relationship With Viad

In fiscal 1997, the Company transferred approximately $12.8 million of
accounts receivable to Viad and was charged a financing charge by Viad of
approximately $0.6 million in 1997 for the transferred receivables. In addition,
prior to the Acquisition, Viad allocated certain income and expenses to the
Company.

On April 1, 1998, the Company completed the Acquisition for a purchase
price of approximately $95 million in cash plus fees and direct acquisition
costs of approximately $4.1 million. The original purchase price was subject to
a purchase price adjustment in favor of the Company for any shortfall in the net
asset value, net working capital or required cash (as such terms are defined in
the purchase agreement) of the ASIG business from the levels represented at the
closing of the Acquisition. The purchase price was also subject to adjustment
in favor of Viad in an amount equal to the amount of cash in the ASIG business
at the closing of the Acquisition in excess of the required cash. As a result
of the purchase price adjustments, the Company was due a purchase price
settlement of $2.125 million from Viad, which is shown in the accompanying
fiscal 2000 consolidated balance sheet as a receivable. The Company and Viad
disputed the amount of the purchase price settlement. Both Viad and the Company
submitted claims to an independent arbitrator.

Relationship with Kirkland and Ellis

One of the Company's investors is Randolph Street Partners, which is
affiliated with the Law Firm of Kirkland and Ellis, which provide legal services
for the Company. Legal expenses incurred in connection with services performed
by Kirkland and Ellis included in selling, general and administrative in the
accompanying statements of operations, were approximately $482,000 for the year
ended March 31, 1999, $779,000 for the year ended March 31, 2000 and $224,000
for the year ended March 31, 2001. Legal expenses of approximately $720,000 for
the year ended March 31, 1999 were incurred in connection with the VIAD
acquisition.

Relationship with CIBC Oppenheimer Corporation

One of Ranger's investors, CIBC, performed certain services for the Company
in the fiscal year ended March 31, 1999. CIBC provided the Company with
short-term financing between April 1, 1998 and August 18, 1998. Interest
payments made to CIBC for the short-term loan was approximately $2.4 million.
Furthermore, transaction fees incurred in connection with the short-term
financing and subsequent exchange of the Old Notes for the Senior Notes were
approximately $2,401,000. In addition, transaction fees incurred in connection
with the VIAD acquisition paid to CIBC were approximately $2,250,000 for the
year ended March 31, 1999.

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) (1) Index to Financial Statements

See Page F-1

(a) (2) Index to Financial Statement Schedules

Schedule II - Valuation and Qualifying Accounts

See Page S-1

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions, are inapplicable or the
information called for thereby is otherwise included in the financial
statements and therefore have been omitted.

(a) (3) Index to Exhibits

The following exhibits are filed as part of, or incorporated by reference
into, this report:

Exhibit No. Exhibit Description

2.1 Asset Purchase Agreement dated May 20, 1999, by and among
Elsinore Acquisition Corporation and Elsinore, L.P., and with
respect to Article VIII and Section 9.8 only, Ranger Aerospace
Corporation, Aircraft Service International Group, Inc.,
Air/Lyon, Inc., Air/Lyon Associates, LP, Elsinore Aerospace
Services, LP and Elsinore Services Corporation, and with respect
to Section 9.8 only, General William Lyon: Incorporated by
reference to Exhibit 2.1 to the Company's Current Report on 8-K
dated May 20, 1999*
2.2 Amended and Restated Agreement and Plan of Merger, dated as of
May 22, 2001, effective as of November 14, 2000, by and among
Ranger, SFSC Acquisition Corporation, Signature Flight Support
Corporation, CIBC WG Argosy Merchant Fund I, L.P. and Certain
Shareholders Named Therein*
3.1 Certificate of Incorporation of the Company(1)
3.2 Bylaws of the Company(1)

4.1 Securities Purchase Agreement dated as of August 13, 1998, by and
among the Company, the Guarantors and CIBC Oppenheimer Corp.(1)
4.2 Indenture dated as of August 18, 1998, among the Company and
State Street Bank and Trust Company, as Trustee with respect to
the 11% Senior Notes due 2005 (including the form of Series B 11%
Senior Notes and Guarantees)(1)
4.3 Registration Rights Agreement dated as of August 18, 1998, among
the Company, the Guarantors and CIBC Oppenheimer Corp. and State
Street Bank and Trust with respect to the 11% Senior Notes due
2005(1)
10.1 Share Purchase Agreement dated as of March 14, 1998, between Viad
Corp. and Viad Service Companies Limited and Ranger, as amended
on March 31, 1998(1)*

10.2 Securities Purchase Agreement dated as of April 1, 1998, by and
among Ranger, John Hancock Mutual Life Insurance Company, CIBC
Wood Gundy Ventures, Randolph Street Partners and Gregg L.
Engles(1)
10.3 Securityholders Agreement, dated April 1, 1998 by and among
Ranger, John Hancock Mutual Life Insurance Company, CIBC Wood
Gundy Ventures, Randolph Street Partners II and Gregg L. Engles
(1)
10.3.1 Amendment to the Ranger Aerospace Corporation Security Holders
Agreement dated April 1, 1998, between John Hancock Mutual Life
Insurance Company, CIBC Wood Gundy Ventures, Inc., Gene Z.
Salkind, M.D., trustee of the Danielle Schwartz Trust UAD 10/1/93
and Investors on the Schedule of Security holders and George W.
Watts dated March 7, 2000: Incorporated by reference to Exhibit
10.12 to the Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 2000.
10.4 Registration Rights Agreement, dated April 1, 1998 by and among
Ranger, CIBC Wood Gundy Ventures, Randolph Street Partners II and
Gregg L. Engles (1)

10.5 Amended and Restated Executive Stock Agreement, dated March 7,
2000 between Ranger and Stephen D. Townes: Incorporated by
reference to Exhibit 10.5 to the Company's Annual Report on Form
10-K for the fiscal year ended March 31, 2000.
10.5.1 Amendment to Promissory Note & Executive Stock Pledge
Agreement, dated March 7, 2000 between Ranger and Stephen D.
Townes: Incorporated by reference to Exhibit 10.14 to the
Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 2000.
10.5.1 Amended and Restated Second Executive Stock Agreement between
Ranger Aerospace Corporation and Stephen D. Townes dated August
31, 2000 (with promissory note and stock pledge agreement):
Incorporated by reference to Exhibit 10.13 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2000.
10.5.2 Third Executive Stock Agreement, dated August 31, 2000 between
Ranger and Stephen D. Townes (with promissory note and stock
pledge agreement): Incorporated by reference to Exhibit 10.23 to
the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2000.
10.6 Amended and Restated Employment Agreement, dated March 7, 2000,
between the Company and Stephen D. Townes: Incorporated by
reference to Exhibit 10.7 to the Company's Annual Report on Form
10-K for the fiscal year ended March 31, 2000.
10.6.1 Amendment No. 1 dated August 31, 2000 to Amended and Restated
Employment Agreement, dated March 7, 2000, between the Company
and Stephen D. Townes: Incorporated by reference to Exhibit
10.6.1 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 2000.
10.7 Non-qualified Stock Option Agreement between Ranger and Stephen
D. Townes dated March 7, 2000: Incorporated by reference to
Exhibit 10.15 to the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 2000.
10.7.1 Amendment No. 1 dated August 31, 2000 to Non-qualified Stock
Option Agreement between Ranger and Stephen D. Townes dated March
7, 2000: Incorporated by reference to Exhibit 10.15 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2000.
10.8 Liquidity Agreement/Right to Put Certain Shares of Executive
Stock dated March 7, 2000 between Ranger and Stephen D. Townes:
Incorporated by reference to Exhibit 10.18 to the Company's
Annual Report on Form 10-K for the fiscal year ended March 31,
2000.
10.8.1 Updated Liquidity Agreement/Right to Put Certain Shares of
Executive Stock dated August 31, 2000 between Ranger and Stephen
D. Townes: Incorporated by reference to Exhibit 10.18 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2000.

10.8.2 Liquidity Agreement/Right to Put Certain Shares of Executive
Stock dated August 31, 2000 between Ranger and Stephen D. Townes:
Incorporated by reference to Exhibit 10.26 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2000.

10.9 Amended & Restated Executive Stock Agreement dated August 31,
2000 between Ranger and George W. Watts (including promissory
note and stock pledge agreement): Incorporated by reference to
Exhibit 10.17 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 2000.
10.9.1 Second Executive Stock Agreement dated August 31, 2000 between
Ranger and George W. Watts (including promissory note and stock
pledge agreement): Incorporated by reference to Exhibit 10.24 to
the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2000.
10.10 Amended and Restated Employment Agreement, dated March 7, 2000,
between the Company and George W. Watts: Incorporated by
reference to Exhibit
10.9 to the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2000.
10.10.1 Amendment No. 1 dated August 31, 2000 to Amended and Restated
Employment Agreement, dated March 7, 2000, between the Company
and George W. Watts: Incorporated by reference to Exhibit 10.9.1
to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2000.
10.11 Non-qualified Stock Option Agreement between Ranger and George
W. Watts dated March 7, 2000: Incorporated by reference to
Exhibit 10.16 to the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 2000.
10.11.1 Amendment No. 1 dated August 31, 2000 to Non-qualified Stock
Option Agreement between Ranger and George W. Watts dated March
7, 2000: Incorporated by reference to Exhibit 10.16 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2000.
10.12 Liquidity Agreement/Right to Put Certain Shares of Executive
Stock dated March 7, 2000 between Ranger and George W. Watts:
Incorporated by reference to Exhibit 10.19 to the Company's
Annual Report on Form 10-K for the fiscal year ended March 31,
2000.
10.12.1 Updated Liquidity Agreement/Right to Put Certain Shares of
Executive Stock dated August 31, 2000 between Ranger and George
W. Watts: Incorporated by reference to Exhibit 10.19 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2000.
10.12.2 Liquidity Agreement/Right to Put Certain Shares of Executive
Stock dated August 31, 2000 between Ranger and George W. Watts:
Incorporated by reference to Exhibit 10.27 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2000.

10.13 Investor Stock Agreement, dated April 2, 1998 between Ranger and
The Danielle Schwartz Trust: Incorporated by reference to Exhibit
10.6 to the Company's Registration Statement on Form S-4
(Registration No. 333-64513)
10.13.1 Amendment No.1 dated March 7, 2000 to Investor Stock Agreement
between Ranger and The Danielle Schwartz Trust
10.13.2 Second Investor Stock Agreement, dated August 31, 2000 between
Ranger and The Danielle Schwartz Trust (including promissory note
and stock pledge agreement): Incorporated by reference to Exhibit
10.25 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 2000.
10.14 Chairman Agreement, dated April 2, 1998, between Ranger, the
Company, Tioga Capital Corporation and George B. Schwartz:
Incorporated by reference to Exhibit 10.10 to the Company's
Registration Statement on Form S-4 (Registration No. 333-64513)
10.14.1 Amendment No. 1, dated August 31, 2000 to Chairman Agreement,
dated April 2, 1998, between Ranger, the Company, Tioga Capital
Corporation and George B. Schwartz: Incorporated by reference to
Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 2000.
10.15 Warrant Agreement dated March 7, 2000 between Ranger and Tioga
Capital Corporation: Incorporated by reference to Exhibit 10.28
to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2000.

10.16 Executive Stock Agreement, dated August 31, 2000 between Ranger
and Jeffrey P. Hartman (including promissory note and stock
pledge agreement) : Incorporated by reference to Exhibit 10.21 to
the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2000.
10.17 Employment Agreement, dated August 31, 2000 between Ranger and
Jeffrey P. Hartman: Incorporated by reference to Exhibit 10.20 to
the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2000.

10.18 Non-qualified Stock Option Agreement between Ranger and Jeffrey
P. Hartman dated March 7, 2000: Incorporated by reference to
Exhibit 10.22 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 2000.

10.19 Ranger Aerospace Corporation 1999 Stock Option Plan

10.20 Senior Credit Facility dated April 2, 1998, between the Company
and Key Corporate Capital, Inc., including the amendment thereto
dated May 20, 1999: Incorporated by reference to Exhibit 10.11 to
the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2000.

10.20.1 Second Amendment to Senior Credit Facility dated July 2000.

10.20.2 Third Amendment to Senior Credit Facility dated May 2001.

21.1 Subsidiaries of the Company

_____________

* The Company agrees to furnish supplementally to the Commission a copy of
any omitted schedule or exhibit to such agreement upon request by the
Commission.
(1) Incorporated by reference to the same numbered exhibit to the Company's
Registration Statement on Form S-4 (Registration No. 333-64513).

(b) Reports on Form 8-K

None

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.

By: /s/ Stephen D. Townes
-------------------------------------
Stephen D. Townes
President and Chief Executive Officer

* * *

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed on June 29, 2000 by the following persons on behalf of the
Registrant and in the capacities indicated.

SIGNATURE TITLE
--------- -----
/s/ Stephen D. Townes President and Chief Executive Officer and
- ---------------------- Director (Principal Executive Officer)
Stephen D. Townes

/s/ Jeffrey P. Hartman Senior Vice President and Chief Financial
- ---------------------- Officer (Principal Accounting and Financial Officer)
Jeffrey P. Hartman

/s/ George B. Schwartz Chairman of the Board, Director and Assistant
- ---------------------- Secretary
George B. Schwartz

/s/Jay R. Levine Director
- ----------------------
Jay R. Levine

/s/ Edward Levy Director
- ----------------------
Edward Levy

/s/ S. Mark Ray Director
- ----------------------
S. Mark Ray

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
INDEX TO FINANCIAL STATEMENTS

Report of Independent Certified Public Accountants F-2

Consolidated Balance Sheets F-3

Consolidated Statements of Operations F-4

Consolidated Statements of Changes in Stockholder's Equity F-5

Consolidated Statements of Cash Flows F-6

Notes to Consolidated Financial Statements F-7

F-1

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Stockholder
Aircraft Service International Group, Inc.

We have audited the accompanying consolidated balance sheets of Aircraft
Service International Group, Inc. and subsidiaries as of March 31, 2001 and
2000, and the related consolidated statements of operations, changes in
stockholder's equity and cash flows for each of the three years in the period
ended March 31, 2001. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Aircraft Service International Group, Inc. and subsidiaries at March 31, 2001
and 2000, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended March 31, 2001, in conformity
with accounting principles generally accepted in the United States.

/s/ ERNST & YOUNG LLP

Miami, Florida
June 22, 2001

F-2

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

MARCH 31, MARCH 31,
2001 2000
----------- -----------

ASSETS
Current assets:
Cash and cash equivalents $ 634 $ 421
Accounts receivable, net of allowance of $548 and $645 at March 31, 2001
and 2000, respectively 28,029 24,028
Prepaid expenses 1,183 1,694
Spare parts and supplies 2,761 2,428
----------- -----------
Total current assets 32,607 28,571

Property, plant and equipment, net of accumulated depreciation of $22,157 and
$13,526 at March 31, 2001 and 2000, respectively 43,008 48,162
Goodwill, net of accumulated amortization of $8,003 and $5,262 at
March 31, 2001 and 2000, respectively 46,871 49,571
Deferred financing costs, net of accumulated amortization of $1,420 and $889
at March 31, 2001 and 2000, respectively 2,204 2,736
Receivable from Viad - 2,125
Investments in and advances to joint venture 495 359
Other assets 797 808
----------- -----------
Total assets $ 125,982 $ 132,332
=========== ===========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 3,897 $ 6,387
Accrued expenses 23,527 17,500
Customer deposits 3,983 3,645
Current portion of Term Loan and other 731 1,039
----------- -----------
Total current liabilities 32,138 28,571

Senior Credit Facility 4,740 5,930
Term Loan 3,438 4,145
Senior Notes 80,000 80,000

Commitments and contingencies

Stockholder's equity:
Common stock, $0.01 par value; 1,000 shares authorized; 100 shares issued
and outstanding -- --
Paid-in capital 27,993 27,800
Accumulated deficit (21,901) (14,095)
Accumulated other comprehensive loss (426) ( 19)
----------- -----------
Total stockholder's equity 5,666 13,686
----------- -----------
Total liabilities and stockholders' equity $ 125,982 $ 132,332
=========== ===========

See accompanying notes

F-3

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Year Ended
-------------------------------
March 31, March 31, March 31,
2001 2000 1999
--------- --------- ---------

Revenues $161,983 $141,044 $123,441
Costs and expenses:
Operating expenses 136,664 116,409 99,035
Selling, general and
administrative 10,648 13,266 8,865
Amortization of intangibles 2,753 2,727 2,545
Depreciation 8,867 7,508 6,176
--------- --------- ---------
Total costs and expenses 158,932 139,910 116,621
--------- --------- ---------
Operating income 3,051 1,134 6,820
Other income (expense), net 88 24 (253)
Interest income 40 100 207
Interest and other financial
expense (10,939) (10,583) (11,281)
--------- --------- ---------
Loss before income taxes and
extraordinary item (7,760) (9,325) (4,507)
(Benefit) provision for income
taxes 46 -- 50
--------- --------- ---------
Loss before extraordinary item (7,806) (9,325) (4,557)
Extraordinary loss on early
extinguishment of debt -- -- (213)
--------- --------- ---------
Net loss $ (7,806) $ (9,325) $ (4,770)
========= ========= =========

See accompanying notes

F-4

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
(U.S. DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY

ACCUMULATED
COMMON OTHER TOTAL
STOCK COMMON PAID-IN ACCUMULATED COMPREHENSIVE STOCKHOLDER'S
OUTSTANDING STOCK CAPITAL DEFICIT LOSS EQUITY
- ----------------------------- ----------- ------- -------- ------------- --------------- ---------------

BALANCE AT MARCH 31, 1998 100 $ -- $ -- $ -- $ -- $ --
Capital contribution -- -- 24,100 -- -- 24,100
Comprehensive loss:
Net loss -- -- -- (4,770) -- (4,770)
Foreign currency translation
adjustment -- -- -- -- 20 20
---------------
Total comprehensive loss (4,750)
BALANCE AT MARCH 31, 1999 100 -- 24,100 (4,770) 20 19,350
- ----------------------------- ----------- ------- -------- ------------- --------------- ---------------
Capital contribution -- -- 3,700 -- -- 3,700
Comprehensive loss:
Net loss -- -- -- (9,325) -- (9,325)
Foreign currency translation
adjustment -- -- -- -- (39) (39)
---------------
Total comprehensive loss (9,364)
BALANCE AT MARCH 31, 2000 100 -- 27,800 (14,095) (19) 13,686
- ----------------------------- ----------- ------- -------- ------------- --------------- ---------------
Capital contribution -- -- 193 -- -- 193
Comprehensive loss:
Net loss -- -- -- (7,806) -- (7,806)
Foreign currency translation
adjustment -- -- -- -- (407) (407)
---------------
Total comprehensive loss (8,213)
- ----------------------------- ----------- ------- -------- ------------- --------------- ---------------
BALANCE AT MARCH 31, 2001 100 $ -- $ 27,993 (21,901) (426) $ 5,666
============================= =========== ======= ======== ============= =============== ===============

See accompanying notes

F-5

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. DOLLARS IN THOUSANDS)

Year ended,
-------------------------------
March 31, March 31, March 31,
2001 2000 1999
-------- --------- ----------

OPERATING ACTIVITIES
Net loss $(7,806) $ (9,325) $ (4,770)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Amortization of intangible assets 2,753 2,727 2,545
Depreciation 8,867 7,508 6,176
Amortization of deferred financing costs 532 552 2,888
Deferred income taxes -- -- 41
Provision for bad debts -- -- 36
Equity in (income) loss of joint venture (197) (135) 157
Loss on sale of fixed assets 126 196 --
Changes in operating assets and liabilities,
net of effects of acquisitions:
Accounts receivable (2,283) (5,811) (1,069)
Prepaid expenses 511 (1,024) (523)
Spare parts and supplies (333) (333) (337)
Other assets 11 (512) 278
Accounts payable (2,490) 1,152 462
Accrued expenses 6,027 4,070 (294)
Customer deposits 338 157 1,055
-------- --------- ----------

Net cash provided by (used in) operating activities 6,056 (778) 6,645

INVESTING ACTIVITIES
Purchases of property, plant and equipment (3,839) (8,027) (13,431)
Purchase of ASIG business, less cash acquired
of $6,513 -- -- (88,487)
Purchase of ACS -- (160) --
Purchase of Elsinore business, less cash acquired of $8 -- (5,672) --
Purchase of GAH business -- -- (438)
Advances to joint venture 8 -- (200)
-------- --------- ----------
Net cash used in investing activities (3,831) (13,859) (102,556)

FINANCING ACTIVITIES
Capital contribution 193 3,700 24,100

Borrowings (repayments), net under Senior Credit Facility (1,690) 8,130 80,630
Payments of deferred financing costs -- (83) (5,508)
Principal payments on notes payable (515) -- --
-------- --------- ----------
Net cash (used in) provided by financing activities (2,012) 11,747 99,222
-------- --------- ----------
Net increase (decrease) in cash and cash equivalents 213 (2,890) 3,311
Cash and cash equivalents at beginning of year 421 3,311 --
-------- --------- ----------
Cash and cash equivalents at end of year $ 634 $ 421 $ 3,311
======== ========= ==========

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Interest paid $10,135 $ 9,888 $ 4,392
======== ========= ==========
Taxes paid $ 90 $ 515 $ 401
======== ========= ==========

Receipt of fixed assets in satisfaction of a receivable $ -- $ -- $ 1,414
======== ========= ==========

SEE ACCOMPANYING NOTES.

F-6

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS

BASIS OF PRESENTATION

Aircraft Service International Group, Inc. (the "Company" or "Successor") was
organized in March 1998 for the purpose of acquiring beneficial ownership and
control of all the outstanding capital stock or other equity interests in
Aircraft Service International, Inc., ASIG Miami, Inc. (previously known as
Dispatch Services, Inc.), ASIG Fueling Miami, Inc. (previously known as Florida
Aviation Fueling Co.), Bahamas Airport Service, Ltd., Freeport Flight Services,
Ltd., ASIG, Ltd. (previously known as Aircraft Service, Ltd.), ASIG Germany GmbH
(previously known as ASII Holding GmbH), and ASII Aircraft Service Canada Ltd.
(collectively the "ASIG business" or "Predecessor") from Viad Corp ("Viad") and
Viad Service Companies, Limited as of April 1, 1998 pursuant to a share purchase
agreement (the "Acquisition"). Prior to the Acquisition by the Company, the
ASIG business was operated by Viad under the divisional name of Aircraft
Services International Group. The ASIG business had a December 31 year-end under
Viad's ownership. The Company's fiscal year end is March 31.

The Company's accompanying balance sheets as of March 31, 2001 and 2000 and the
related statements of operations, changes in stockholder's equity and cash flows
for the years ended March 31, 2001, 2000 and 1999 are presented on a
consolidated basis. The Company is 100% owned by Ranger Aerospace Corporation
("Ranger"). Prior to April 1, 1998, the Company had no operations.

On April 1, 1998, the Company completed the Acquisition for a purchase
price of approximately $95 million in cash plus fees and direct acquisition
costs of approximately $4.1 million. The original purchase price was subject to
a purchase price adjustment in favor of the Company for any shortfall in the net
asset value, net working capital or required cash (as such terms are defined in
the purchase agreement) of the ASIG business from the levels represented at the
closing of the Acquisition. The purchase price was also subject to adjustment in
favor of Viad in an amount equal to the amount of cash in the ASIG business at
the closing of the Acquisition in excess of the required cash. As a result of
the purchase price adjustments, the Company is due a purchase price settlement
of $2.125 million from Viad, which is shown in the accompanying consolidated
balance sheet as a receivable. Currently, the Company and Viad have disputed
the amount of the purchase price settlement. Both Viad and the Company have
submitted claims to an independent arbitrator.

In early August 2000, the Company learned that it had prevailed in a neutral
auditor/arbitration process with respect to its claim for a purchase price
adjustment from Viad. As a result of this favorable ruling, the Company received
payment of $2,014 from Viad on August 28, 2000. The Company also had additional
indemnification claims against Viad. On August 28, 2000, the Company settled and
received $400 in payment for the additional indemnification claims.

F-7

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS (CONTINUED)

The Acquisition was accounted for as a purchase and, accordingly, the purchase
price was allocated to the assets acquired and liabilities assumed based on
appraisals and other estimates of their underlying fair values. The excess of
the purchase price over the fair value of net assets acquired of approximately
$50.8 million is classified as goodwill and is being amortized over 20 years.

The following is a summary of the purchase price allocation:

Net working capital, including cash of $6,513 $ 4,783
Property, plant and equipment 38,149
Other assets 3,268
Goodwill 50,775
--------
$96,975
========

The purchase price was funded as follows:

Sale of 100 shares of common stock, $0.01 par value, to
Ranger Aerospace Corporation $24,100
Borrowings under Senior Increasing Rate Notes (see Note 8) 75,000
Purchase price adjustment - receivable from Viad at March 31, 1999 (2,125)
--------
$96,975
========

The following unaudited pro forma data presents a summary of consolidated
results of operation of the Company for the year ended March 31, 1998 as if the
Acquisition had occurred on April 1, 1997:

Revenues $119,700
Net loss (4,010)

The unaudited pro forma results have been prepared for comparison purposes only
and include certain adjustments, such as additional depreciation and
amortization expense due to the revaluation of assets acquired and the goodwill
related to the Acquisition, additional interest expense associated with the debt
related to the acquisition, and certain reductions in expense associated with
the restructuring of certain Company functions after the Acquisition. The
unaudited pro forma results do not purport to be indicative of the results of
operation which actually would have resulted had the Acquisition occurred on
April 1, 1997, or of future results of operation of the Company.

On May 20, 1999, Elsinore Acquisition Corporation ("EAC"), a newly-created,
wholly-owned subsidiary of the Company, acquired substantially all of the assets
of Elsinore, L.P., ("Elsinore"), which includes 23 operating units in 10 states,
the U.S. Virgin Islands and Puerto Rico. Elsinore provides a variety of ground
handling, fueling, aircraft cleaning and other aviation services to major
commercial airlines. EAC will primarily continue the same business as
previously conducted by Elsinore. The Company and its sole shareholder, Ranger
Aerospace, are guarantors of EAC's obligations under the agreement governing the
asset purchase.

The total consideration paid by EAC was approximately $5.9 million (subject to
post-closing adjustments), which consists of $5 million in cash and a promissory
note of approximately $0.9 million. The promissory note has a maturity of one
year from the date of purchase, and is subject to post-closing adjustments. The
Company borrowed the cash portion of the purchase price from Key Corporate
Capital, Inc. ("Key") pursuant

F-8

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS (CONTINUED)

to the terms of an amendment to the Company's existing senior credit facility,
which the Company recorded on the books of EAC.

The Elsinore acquisition was accounted for as a purchase and accordingly, the
purchase price was allocated to the assets acquired and liabilities assumed
based on appraisals and other estimates of their underlying fair values. The
excess of the purchase price over the fair value of net assets acquired of
approximately $3.7 million is classified as goodwill and is being amortized over
20 years.

The following is a summary of the purchase price allocation:

Net working capital, including cash of $9 $1,110
Property, plant and equipment 799
Other assets 130
Goodwill 3,453
------
$5,492
======
The purchase price was funded as follows:

Senior credit facility (see Note 7) $5,000
Promissory note (see Note 7) 492
------
$5,492
======

The following unaudited pro forma data presents a summary of consolidated
results of operation of the Company for the twelve months ended March 31, 2000
and 1999 as if the Elsinore acquisition had occurred on April 1, 1998:

Year Ended
March 31,

2000 1999
--------- ---------

Revenue $142,796 $137,319
Net loss (9,408) (6,025)

The unaudited pro forma results have been prepared for comparison purposes only
and include certain adjustments, such as additional amortization expense due to
the goodwill related to the Elsinore acquisition and additional interest expense
associated with the debt related to the Elsinore acquisition. The unaudited pro
forma results do not purport to be indicative of the results of operation which
actually would have resulted had the Elsinore acquisition occurred on April 1,
1998, or of future results of operation of the Company.

In March 2000, a working capital adjustment of approximately $407,000 to reduce
the note payable was made pursuant to an agreement with General William Lyon,
which reduced goodwill. No further adjustments are anticipated.

NATURE OF BUSINESS

The Company and its subsidiaries provide aviation fueling services, aircraft
ground services and other aviation services at various airports in the United
States, Europe and the Caribbean.

F-9

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND COMBINATION

The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly owned or controlled. All significant
intercompany balances and transactions have been eliminated.

SPARE PARTS AND SUPPLIES

Spare parts and supplies are valued at the lower of cost or market. Cost is
computed using the first-in, first-out cost method.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation is recorded using
the straight-line method over the estimated useful lives of the assets, which
range from 4 to 20 years for operating equipment, 20 to 30 years for buildings,
and 3 to 10 years for office furniture and equipment. Leasehold improvements are
amortized over the life of the lease or the related asset, whichever is shorter.
Maintenance and repairs are charged to expense when incurred. Significant
expenditures, which extend the useful lives of assets, are capitalized.

FOREIGN CURRENCY TRANSLATION

For the Company's operations where the functional currency is other than the
U.S. Dollar, balance sheet amounts are translated using the exchange rate in
effect at the balance sheet date. Income statement amounts are translated at the
average exchange rates during the year or period. Translation adjustments
resulting from the changes in exchange rates from year to year are recorded as
accumulated other comprehensive loss.

INVESTMENTS IN AND ADVANCES TO JOINT VENTURE

The Company accounts for its investment in a 50% owned joint venture under the
equity method of accounting. The joint venture, Skytanking GmbH, located in
Munich, Germany, provides aviation fueling and aircraft ground services at
Munich International Airport.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company accounts for the impairment of long-lived assets under Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121).
SFAS No. 121 requires impairment losses to be recorded on long-lived assets when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount. The
Company believes no impairment indicators existed at March 31, 2001.

IMPAIRMENT OF GOODWILL

The carrying value of cost in excess of net assets acquired is reviewed for
impairment whenever events or changes in circumstances indicate that it may not
be recoverable. If such an event occurred, the Company would prepare
projections of future results of operations for the remaining amortization
period. If such projections indicated that the cost in excess of net assets
acquired would not be recoverable, the Company's carrying value of such asset
would be reduced by the estimated excess of such value over projected income.

F-10

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION

The Company recognizes revenue when services are performed and collectibility is
reasonably assured.

INCOME TAXES

The Company and the Predecessor account for income taxes under FASB Statement
No. 109, "Accounting for Income Taxes" (SFAS No. 109). Deferred income tax
assets and liabilities are determined based upon differences between financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates and laws that are expected to be in effect when the
differences are expected to reverse.

COMPREHENSIVE INCOME

Comprehensive income (loss) includes net income (loss) and other comprehensive
income, which includes, but is not, limited to, unrealized gains for marketable
securities and future contracts, foreign currency translation adjustments and
minimum pension liability adjustments. The accompanying financial statements for
the Company reflect other comprehensive loss consisting of net loss and foreign
currency translation adjustments.

NEW ACCOUNTING PRONOUNCEMENTS

In fiscal year 1999, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS No. 133), This statement establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities.
It requires that an entity recognized all derivatives as either assets or
liabilities in the balance sheet and measure those instruments at fair value.

In fiscal year 2000, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 137, "Accounting for Derivative
Instruments and Hedging Activities -- Deferral of the Effective Date of FASB
Statement No. 133" (SFAS No. 137), which delayed the effective date of SFAS No.
133. The effective date for SFAS 133, after issuance of SFAS No. 137, is for
all fiscal quarters of all fiscal years beginning after June 15, 2000.

The Company adopted SFAS No. 133 in fiscal year 2001. The adoption of SFAS No.
133 did not have a material impact on the Company's financial statements.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial Statements". The
SEC staff subsequently amended SAB 101 to provide registrants with additional
time to implement SAB 101. The Company adopted SAB 101 in by the fourth quarter
of fiscal 2001. The adoption of SAB 101 did not have a material effect on its
consolidated financial position, results of operations or cash flows.

CONCENTRATION OF CREDIT RISK

The Company provides services to domestic and foreign airlines and continually
monitors its exposure for credit losses. The Company limits its exposure by
requiring prepayments or deposits from certain customers.

F-11

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

BUSINESS SEGMENTS

Pursuant to SFAS No. 131, "Disclosure About Segments of a Business Enterprise
and Related Information," the Company is required to report segment information.
As the Company only operates in one business segment, no additional reporting is
required, except for the geographic financial information provided in Note 15.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of cash, accounts receivable, accounts payable and accrued
expenses in the accompanying consolidated financial statements approximate their
fair value because of their short-term maturities. At March 31, 2001 and 2000,
the fair value of the long-term debt, based on quoted market prices, was
approximately $90.1 million and $69.4 million, respectively.

3. RELATED-PARTY TRANSACTIONS

The Company's parent, Ranger, has no independent operations. Expenses incurred
by Ranger related to the Aircraft Service International Group business have been
pushed down to the Company. These expenses totaled $1,539, $1,089 and $1,715 in
fiscal 2001, 2000 and 1999, respectively.

The Company's Chairman is the President of a company which received $162 for a
retainer in fiscal 2001, a $150 annual fee in fiscal 2000 and 1999 and an $850
payment from the Company for acquisition related services in connection with the
Acquisition. In addition, the same company will receive a bonus of $1,350 if
the Company satisfies certain market value and liquidity requirements in
connection with a sale of the business of Ranger or the Company or a public
offering of equity securities of Ranger.

One of the Company's investors is Randolph Street Partners, which is affiliated
with the law firm of Kirkland and Ellis, which provide legal services for the
Company. Legal expenses incurred in connection with services performed by
Kirkland and Ellis, included in selling, general and administrative in the
accompanying statements of operations, were approximately $224 for the year
ended March 31, 2001, $779 for the year ended March 31, 2000 and $482 for the
year ended March 31, 1999. Legal expenses of approximately $720 for the year
ended March 31, 1999 were incurred in connection with the VIAD acquisition.

One of Ranger's investors, CIBC, performed certain services for the Company
in the fiscal year ended March 31, 1999. CIBC provided the Company with
short-term financing between April 1, 1998 and August 18, 1998. Interest
payments made to CIBC for the short-term loan was approximately $2.4 million.
Furthermore, transaction fees incurred in connection with the short-term
financing and subsequent exchange of the Old Notes for the Senior Notes (see
Note 8) were approximately $2,401. In addition, transaction fees incurred in
connection with the VIAD acquisition paid to CIBC were approximately $2,250 for
the year ended March 31, 1999.

F-12

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at March 31:

2001 2000
--------- ---------

Operating equipment $ 53,311 $ 50,953
Buildings and leasehold improvements 7,523 7,282
Office furniture and equipment 3,287 3,123
Construction in progress 1,044 330
--------- ---------
65,165 61,688
Accumulated depreciation and amortization (22,157) (13,526)
--------- ---------
$ 43,008 $ 48,162
========= =========

5. ACCRUED EXPENSES

Accrued expenses consisted of the following at March 31:
2001 2000
--------- ---------

Salaries and wages $ 4,503 $ 4,044
Damage claims 1,862 1,170
Pension liability 327 206
Accrued interest 1,214 1,249
Consortium funds 16,398 7,635
Consortium - restricted cash (5,682) (3,014)
Other 4,905 6,210
--------- ---------
$ 23,527 $ 17,500
========= =========

6. INCOME TAXES

The (loss) income before income taxes consisted of the following:

Year ended
March 31,

2001 2000 1999
-------- -------- --------

United States $(8,191) $(8,292) $(4,823)
Non-U.S. 281 (940) 316
-------- -------- --------
$(7,910) $(9,232) $(4,507)
======== ======== ========

F-13

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

6. INCOME TAXES (CONTINUED)

The provision (benefit) for income taxes is summarized as follows:

Year ended
March 31,
-------------------
2001 2000 1999
----- ----- -----

Current:
U.S. Federal $ -- $ -- $ --
State 25 -- --
Non-U.S. 21 -- 9
----- ----- -----
46 -- 9
Deferred:
U.S. Federal -- -- --
State -- -- --
Non-U.S. -- -- 41
----- ----- -----
-- -- 41
----- ----- -----
$ 46 $ -- $ 50
===== ===== =====

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

March 31, 2001 March 31, 2000
---------------- ----------------

Deferred tax assets:
Allowance for doubtful accounts $ 23 $ 41
Accrued vacation and bonuses 335 142
Accrued as related to economic performance 61 228
Damage claims and other insurance liabilities -- 16
Amortization of deferred finance costs -- 107
Other 26 3
Net operating loss carry-forwards 10,838 6,727
---------------- ----------------
Deferred tax assets 11,283 7,264

Less: valuation allowance (8,111) (5,021)
---------------- ----------------
Total deferred tax assets, net 3,172 2,243

Deferred tax liabilities:
Tax depreciation in excess of book depreciation (2,682) (1,826)
Tax goodwill amortization in excess of book goodwill
amortization (241) (414)
State taxes (46) --
Damage claims insurance (189) --
Other (14) (3)
---------------- ----------------
Total deferred tax liabilities (3,172) (2,243)
---------------- ----------------
Total net deferred taxes $ -- $ --
================ ================

F-14

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

6. INCOME TAXES (CONTINUED)

SFAS No. 109 requires a valuation allowance to reduce the deferred tax assets
reported if, based on the weight of the evidence, it is more likely than not
that some portion or all of the deferred tax assets will not be realized. After
consideration of all evidence, both positive and negative, management has
determined that a valuation allowance of $8,111 and $5,021 at March 31, 2001 and
2000, respectively is necessary to reduce the deferred tax assets to the amount
that will more likely than not be realized. At March 31, 2001, the Company has
available U.S. net operating loss carry-forwards of $28,049, which expire
beginning in 2019.

A reconciliation of (benefit) provision for income taxes to the U.S. statutory
rate of 34% is as follows:

Year ended
March 31,
2001 2000 1999
------------ -------- --------

Income taxes (benefit) at U.S.
statutory rate $ (2,785) $(3,139) $(1,607)
State income taxes (255) (344) (113)
Permanent items 150 139 34
Change in valuation allowance 3,090 3,235 1,786
Effect of non-U.S. operations (154) 109 (50)
------------ -------- --------
$ 46 $ -- $ 50
============ ======== ========

7. NOTES PAYABLE

SENIOR CREDIT FACILITY
- ------------------------

On April 2, 1998, the Company entered into a revolving credit facility with
Key Corporate Capital (the "Senior Credit Facility"). The Senior Credit Facility
allows for borrowings in the aggregate of up to the lesser of $10 million or a
borrowing base, equal to 85% of eligible accounts receivable, as defined. The
revolving loans under the Senior Credit Facility mature on August 31, 2002 or
sooner as provided in the Senior Credit Facility. In July 2000, the Company
amended its Senior Credit Facility to increase the amount available under the
facility to $15 million.

Indebtedness of the Company under the Senior Credit Facility is guaranteed
by each of the Company's domestic subsidiaries and is generally be secured by:
(i) all of the Company's cash equivalents, accounts receivable, contract rights,
general intangibles, instruments and chattel paper relating thereto; (ii) all of
the Company's inventory; (iii) amounts (if any) held in a commercial deposit
account with the lending bank, (iv) certain cash and cash equivalents related to
the foregoing, and (v) all proceeds from (i) to (iv) inclusive.

The Company's borrowings under the Senior Credit Facility bear interest at
a floating rate and may be maintained as Prime Rate Loans or LIBOR loans.
Borrowings made pursuant to the Prime Rate Loans bear interest rates equal to
the prime rate plus the Applicable Margin (as defined in the Senior Credit
Facility) and borrowings made pursuant to the LIBOR Loans bear interest rates
equal to the LIBOR rate plus the Applicable Margin. The Applicable Margin for
Prime Rate Loans will range from 0% to 0.50% based on the Company's Leverage
Ratio (as defined in the Senior Credit Facility). The Applicable Margin for
LIBOR Loans will range from 1.25% to 2.25% based on the Company's Leverage
Ratio.

The Senior Credit Facility requires the Company to meet certain financial
tests, including, a minimum yearly earning before interest, taxes, depreciation
and amortization "EBITDA", as defined test and maximum leverage

F-15

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

7. NOTES PAYABLE (CONTINUED)

ratios. The Senior Credit Facility also contains certain covenants, which among
other things, will limit the incurrence of additional indebtedness, the making
of loans or investments, the declaration of dividends, transactions with
affiliates, asset sales, acquisitions, mergers and consolidations, the
incurrence of liens and encumbrances and other matters customarily restricted in
such agreements. There was $4,740 outstanding under the Senior Credit Facility
as of March 31, 2001. The amounts outstanding under the Senior Credit Facility
bear interest at 8.0%. As of March 31, 2001, there was $10,020 of available
credit under the Senior Credit Facility.

TERM LOAN
- ----------

On May 20, 1999, the Senior Credit Facility was amended to add a $5 million
Term Loan (the "Term Loan"). The proceeds of the Term Loan were used as part of
the purchase price for the assets of Elsinore, L.P. (See Note 1). The Term Loan
is payable in quarterly installments in arrears at varying amounts over its
five-year life. The Company's borrowings under the Term Loan will bear interest
in a manner identical to the Senior Credit Facility except that the Applicable
Margin for Prime Rate Loans will range from 0% to 1.25% based on the Company's
Leverage Ratio and the Applicable Margin for LIBOR Loans will range from 2% to
3% based on the Company's Leverage Ratio. Furthermore, the requirement to meet a
minimum interest coverage test is no longer applicable as of April 1, 1999.
Rather, the Company must meet a minimum EBITDA test. The Term Loan is secured by
all of the Company's (i) equipment, (ii) amounts, (if any) held in a commercial
deposit account with the lending bank, (iii) certain cash and cash equivalents
related to the forgoing and (iv) all proceeds from (i) to (iii) inclusive. As
of March 31, 2001, $4,125 was outstanding under the Term Loan.

Maturities on the Term Loan and other during the next five years are:

2001 731
2002 750
2003 1,012
2004 1,325
2005 350
------
Total $4,168
======

Included in Term Loan and Other are other notes payable totaling $43 in fiscal
2001 and $559 in fiscal 2000, which includes the amount due under the note
payable issued in connection with the Elsinore acquisition

As of March 31, 2001 and 2000, the Company had $240 and $265 letters of credit
outstanding, respectively.

8. SENIOR NOTES

On April 2, 1998, the Company issued $75 million of notes (the "Senior
Increasing Rate Notes"). The proceeds from the Senior Increasing Rate Notes were
used to consummate the Acquisition. On August 18, 1998, the Company issued $80
million of notes (the "Old Notes"). The proceeds from the Old Notes were used to
repay the Senior Increasing Rate Notes. On February 12, 1999, the Company
exchanged the Old Notes for substantially identical Series B 11% Senior Notes
(the "Notes"). The Notes mature in August 2005, and bear interest at 11%,
payable semiannually on each February 15 and August 15, commencing February 15,
1999.

The Notes are redeemable at the option of the Company, at any time on or
after August 15, 2003, at a premium of 105.5% in 2003 and at 100% of the
principal amount in 2004 and thereafter. In addition, the Company may redeem at
its option up to 33 1/3% of the original principal amount of the Notes at any
time on or prior to August 15, 2001, at a redemption price equal to 111% of the
principal amount being redeemed, with the net proceeds of one or more public
offerings, provided that at least $53.3 million aggregate principal amount of
the Notes remain outstanding after any such redemption and that any such
redemption occurs within 90 days following

F-16

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

8. SENIOR NOTES (CONTINUED)

the closing of such public offering. Upon the occurrence of a Change in Control
(as defined in the Indenture covering the Notes), each holder of the Notes is
entitled to require the Company to repurchase such Notes at a premium of 101%.
The Notes are fully and unconditionally guaranteed, on an unsecured basis, by
the Company's domestic subsidiaries (see Notes 12 and 17).

The Notes contain certain covenants, which among other things limit the ability
of the Company to incur additional indebtedness, issue common and preferred
stock of its subsidiaries, pay dividends, transfer and sell assets and enter
into transactions with affiliates.

In fiscal 1999, the Company wrote-off $213 of unamortized deferred financing
costs previously incurred in connection with the Senior Increasing Rate Notes
that were repaid with the net proceeds of the issuance of the Old Notes. This
write-off was accounted for as an extraordinary loss on the early extinguishment
of debt.

9. STOCK OPTIONS

During 1999, Ranger adopted the 1999 Stock Option Plan (the "Plan") which
provides for the granting of stock options to purchase shares of Ranger's common
stock to executives and other key employees of the Company. At March 31, 1999,
Ranger reserved 1,000,000 shares of its common stock for issuance under the
Plan. The vesting period and the terms of the stock options granted are
established by a committee appointed by Ranger's Board of Directors (the
"Committee"). The stock options expire no later than ten years from the date of
grant. Ranger has granted options to Company employees to purchase 15,995 shares
of Ranger's Class B common stock. Of the 15,995 options granted, 4,052 vest
ratably over time and 8,104 vest upon the attainment of certain performance
goals as determined by the Committee. The remaining 3,839 vest upon the Company
satisfying certain market value and liquidity requirements in connection with a
sale of Ranger or the Company. All unvested options granted under the plan will
automatically vest on January 28, 2007. The exercise price of these stock
options varies between $100 and $341 per share, which was determined by the
Committee to be the fair value of Ranger's common stock at the date of grant. As
a result, no compensation cost has been recognized under the provisions of APB
Opinion No. 25. All of the options issued by Ranger were issued to employees of
the Company and accordingly such options are reflected below.

Changes to the Plan for the years ending March 31, 2001, 2000 and 1999 are as
follows:

Weighted Weighted
Number of Average Options Average
Options Exercise Price Exercisable Exercise Price
Ranger Shares Per Share Ranger Shares Per Share
-------------- --------------- ------------- ---------------

Outstanding at March 31, 1998 -- --
Granted 13,795 $ 100
Exercised --
Cancelled (85) $ 100
--------------
Outstanding at March 31, 1999 13,710 $ 100 1,130 $ 100

Granted 636 $ 100
Exercised
Cancelled (574) $ 100
--------------
Outstanding at March 31, 2000 13,772 $ 100 5,342 $ 100

Granted 1,564 $ 254
Exercised
Cancelled (461) $ 236
--------------
Outstanding at March 31, 2001 14,875 $ 112 6,404 $ 112
==============

F-17

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

9. STOCK OPTIONS (CONTINUED)

The following table summarizes information about the stock options outstanding
at March 31, 2001:

Options Outstanding Options Exercisable
- ------------------------------------------------- -----------------------------
Weighted
Weighted Average Average
Number Remaining Number Exercise
Exercise Price Outstanding at Contractual Life Exercisable Price Per Share
- --------------- -------------- ---------------- ----------- ----------------

100 14,135 7 6,078 $ 100
341 740 7 326 $ 341
-------------- ---------------- ----------- ----------------
14,875 7 6,404 $ 112

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

Year ended
March 31, 2001 March 31, 2000 March 31, 1999
---------------- ---------------- ----------------

Net loss $ (7,702) $ (9,451) $ (4,952)
================ ================ ================

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

March 31, 2001 March 31, 2000 March 31, 1999
-------------- ---------------- --------------

Expected life 7 years 8 years 9 years
Interest rate 6.00% 7.00% 6.00%
Volatility -- -- --
Dividend yield -- -- --

The Black-Scholes options valuation model was developed for use in estimating
the fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
Ranger's stock options have characteristics significantly different from traded
options, and because changes in the subjective input assumptions can materially
affect the fair value estimate, the existing models, in management's opinion, do
not necessarily provide a reliable single measure of the fair value of Ranger's
stock options.

F-18

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

10. COMMITMENTS

The Company leases operating facilities and office space pursuant to various
operating leases. The aggregate minimal rental payments under all operating
leases with initial terms of one year or more at March 31, 2001 are as follows:

2002 $ 4,497
2003 4,183
2004 3,961
2005 3,848
2006 3,444
Thereafter 9,015
-------
$28,948
=======

Total rent expense for all operating leases amounted to $5,302, $3,981 and
$2,947 for the years ended March 31, 2001, 2000 and 1999, respectively.

11. EMPLOYEE BENEFIT PLANS

The Company sponsors a non-contributory defined benefit pension plan, which
covers certain union employees at its Miami station. The plan provides benefits
based on the employees' years of service and qualifying final average
compensation. The Company's funding policy is to contribute amounts sufficient
to meet the minimum funding requirements of the Employee Retirement Income
Security Act of 1974, as amended, or such additional amounts as determined
appropriate to assure that assets of the plan would be adequate to provide
benefits.

The assumptions used in the calculation of the actuarial present value of the
projected benefit obligation and expected long-term return on plan assets for
the Company's defined benefit pension plan consisted of the following:

March 31, 2001 March 31, 2000
-------------------------------

Weighted average discount rate 7.75% 8.00%
Rate of increase in compensation levels 5.00% 5.00%
Expected long-term return on assets 9.50% 9.50%

F-19

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

11. EMPLOYEE BENEFIT PLANS (CONTINUED)

The following table sets forth a reconciliation of benefit obligations,
plan assets and funded status for the Company's defined benefit pension
plan as of and for the years ended March 31, 2001 and 2000.

March 31, 2001 March 31, 2000
---------------- ----------------

CHANGES IN BENEFIT OBLIGATION:
Benefit obligation at the beginning of the period $ 1,365 $ 1,337
Service cost 145 114
Interest cost 109 90
Actuarial gain (loss) 7 (176)
---------------- ----------------
Benefit obligation at end of period $ 1,626 $ 1,365
================ ================

CHANGES IN PLAN ASSETS:
Fair value of plan assets at beginning of period $ 1,293 $ 1,153
Actual return (loss) on plan assets (79) 83
Employer contribution 13 57
---------------- ----------------
Fair value of plan assets at end of period $ 1,227 $ 1,293
================ ================

RECONCILIATION:
Funded status $ 399 $ 71
Unrecognized net (loss) gain (67) 130
---------------- ----------------
Accrued benefit cost $ 332 $ 201
================ ================

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

Year ended
March 31, 2001 March 31, 2000 March 31, 1999
---------------- ---------------- ----------------

Service cost-benefits earned during the period $ 145 $ 114 $ 82
Interest cost on projected benefit obligation 109 90 83
Loss /(return) on assets 35 (127) (140)
Net amortization and deferral (145) 31 58
---------------- ---------------- ----------------
Net periodic pension expense $ 144 $ 108 $ 83
================ ================ ================

The Company also sponsors a defined contribution plan pursuant to Section 401(K)
of the Internal Revenue Code. Subject to certain dollar limits, employees may
contribute a percentage of their salaries to the plan and the Company will match
a portion of each employee's contribution. This plan is in effect for U.S.
based employees only. The expense pertaining to this plan was approximately
$991, $715 and $638 for the years ended March 31, 2001, 2000 and 1999.

F-20

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

12. DEFINITIVE AGREEMENT FOR MERGER

On November 15, 2000, Ranger, the Company, and Signature Flight Support
Corporation ("Buyer"), a wholly-owned subsidiary of BBA Group, plc ("BBA")
announced that they entered into a definitive agreement under which Signature
will acquire Ranger stock for a total consideration of approximately $152
million, in addition to the assumption of the Senior Notes and the repayment of
the Company's debt (the "Merger"). Closing of the Merger is subject to the
satisfaction or waiver of the following conditions:

- - the Company shall have obtained any necessary consent or approval required
by the Gatwick Airport Authority;

- - the Company's shareholders shall have approved the Merger.

The Merger is also subject to the following additional conditions:

- - The representations and warranties of the Company contained in the Merger
agreement (disregarding any qualifications as to materiality or Company
Material Adverse Effect or similar qualifications contained therein) shall
be true and correct in all respects as of the date the Merger Agreement was
executed and as of the closing of the Merger as though made on and as of
the date of the closing of the Merger, except for those failures of such
representations and warranties to be true and correct which individually or
in the aggregate would not be reasonably likely to have a Company Material
Adverse Effect. For this purpose, Company Material Adverse Effect is
defined as, "any change or effect that is or would be materially adverse to
the assets, business, prospects, results of operations or financial
condition of the Company and the Company subsidiaries, taken as whole
(other than changes or effects that are the result of economic factors
affecting the economy or financial markets as a whole or generally
affecting the aviation services markets or that arise out of or result from
actions contemplated by the parties in connection with this Agreement or
the announcement or performance of this Agreement or the transactions
contemplated by this Agreement)."

- - The Company and the Shareholders shall have performed and complied with all
of their respective covenants hereunder in all material respects through
the closing.

- - The representations and warranties of the Buyer contained in the Merger
agreement shall be true and correct in all material respects.

- - The Buyer shall have performed and complied with all of its covenants
hereunder in all material respects through the closing.

F-21

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

12. DEFINITIVE AGREEMENT FOR MERGER (CONTINUED)

- - The Buyer shall have delivered to the Buyer and Merger Subsidiary a
certificate signed by an executive officer of the Company to the effect
that each of the conditions noted above are satisfied in all material
respects.

The consummation of the Merger will trigger Change of Control provisions in
ASIG's $80,000,000 Senior Notes, thus requiring the Buyer to tender for the
bonds at a purchase price equal to 101% (see below) of the principal amount.

On January 4, 2001, the Buyer commenced a tender offer for all of the
outstanding 11% Senior Notes due 2005 of the Company. In connection with the
tender offer, the Buyer is also seeking consents to certain proposed amendments
to the Indenture under which Senior Notes were issued. The purpose of the
proposed amendments is to eliminate certain restrictive covenants contained in
the Indenture, thereby affording the Company additional financial and
operational flexibility. The purchase price under the tender offer is $1,181.89
per $1,000 principal amount of Senior Notes tendered (of which $20 constitutes a
consent payment), plus accrued but unpaid interest to (but excluding) the date
of payment of such purchase price.

The tender offer is conditioned upon, among other things, the receipt of
the requisite consents to adopt the proposed amendments and the completion of
the Merger. The offer is made only by an Offer to Purchase and Consent
Solicitation Statement date January 4, 2001 and the Related Letter of
Transmittal and Consent.

On February 14, 2001, counsel for the Buyer informed the Company that the
Buyer believes the first additional closing condition listed above has not been
satisfied. The Company informed the Buyer that it believes all closing
conditions other than the expiration or termination of the waiting period under
the Hart Scott Rodino Act have been satisfied. The Company expects to discuss
with the Buyer the basis for the Buyer's view of the matter.

On May 22, 2001, Ranger and Signature agreed to amend and restate the
original Merger Agreement between them, dated as of November 14, 2000 to resolve
a dispute over whether the variance between Ranger's actual and budgeted results
of operations and certain other changes constituted a material adverse change
under the terms of the original Merger Agreement. The aggregate consideration to
be paid by Signature to the holders of Ranger common stock has been reduced
under the amended and restated Merger Agreement.

In connection with the Merger, Signature has indicated that on or about
Friday, May 25, 2001 it will amend its tender offer and consent solicitation for
100% of the 11% Senior Notes due 2005 of ASIG (the ``Securities''). Pursuant to
the revised tender offer and consent solicitation, Signature will offer to
purchase all of the outstanding Securities at a price equal to 100% of the
principal amount of the Securities plus all accrued but unpaid interest thereon.

F-22

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

12. DEFINITIVE AGREEMENT FOR MERGER (CONTINUED)

plus all accrued but unpaid interest thereon. The amended offer will expire at
10:00 a.m., New York City time, on July 10, 2001, unless extended.

There is no assurance that the Merger will occur.

13. CONTINGENCIES

The Company is engaged in litigation arising in the normal course of
business. Management believes that the outcome of such litigation will not have
a material adverse effect on the Company's financial position or its results of
operations.

The Company is subject to compliance obligations and liabilities
imposed pursuant to federal, state, local and foreign environmental and
workplace health and safety requirements, including CERCLA. In particular, the
Company's aviation fueling services are subject to liabilities and obligations
relating to the above ground and underground storage of, and the release and
cleanup of, petroleum products. Although the Company believes it is in material
compliance with environmental, health and safety requirements, the possibility
exists that noncompliance could occur or be identified in the future, and the
penalties or costs of corrective action associated therewith could have a
material adverse effect on the Company's business, operating results and
financial condition. In addition, requirements are complex, change frequently
and have tended to become more stringent over time, and there can be no
assurance that these requirements will not change in the future in a manner that
could materially and adversely affect the Company.

The Company is currently conducting or funding, or expects to conduct or
fund, environmental investigations, monitoring and cleanups at certain of its
previously or currently operated facilities. Also, from time to time, the
Company receives notices of potential liability for cleanup costs associated
with offsite waste recycling or disposal facilities at which wastes associated
with its operations allegedly have come to be located. In addition, airport
authorities are coming under increasing pressure to clean up previous
contamination at their facilities and are seeking financial contribution from
airport tenants and companies which operate at their airports. Although the
Company has taken steps to mitigate or remove the foregoing liabilities, the
Company could bear direct liability for the foregoing matters and such liability
could have a material adverse effect on the Company's business, operating
results and financial condition.

F-23

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Approximately 61.0% of the Company's employees are represented by labor
unions. There are currently approximately 34 collective bargaining contracts
(among 7 separate union entities) in place, almost all of which
have terms of three years. Contract expirations are staggered with approximately
one-third coming up for renewal each year. The Company believes that it has had
good relations with the several unions representing its employees.

Tioga, an investor in Ranger, will receive a bonus of $1,350 if the Company
satisfies certain market value and liquidity requirements in connection with a
sale of the business of Ranger or the Company or a public offering of equity
securities of Ranger.

14. SIGNIFICANT CUSTOMERS AND SERVICES

One of the Company's customers accounted for 18.7% of the Company's overall
revenues for the year ended March 31, 2001. This customer also accounted for
20.3% and 15.0% of revenues for the year ended March 31, 2000 and 1999,
respectively.

Another customer accounted for 6.7% of the Company's revenue for the year
ended March 31, 2001. This customer also accounted for 4.9% and 13.0% of the
Company's revenue for the year ended March 31, 2000 and 1999, respectively.

The Company operates two primary lines of business -- Fueling and Ground
Handling. Revenue for the Fueling line of business was responsible for 62.9%,
64.0% and 60.7% of the Company's total revenue for fiscal 2001, 2000 and fiscal
1999, respectively. Revenue for the Ground Handling line of business was
responsible for 33.8%, 32.8% and 15.3% of the Company's total revenue for fiscal
2001, 2000 and fiscal 1999, respectively.

15. GEOGRAPHIC AREA INFORMATION

The following table includes selected financial information pertaining to the
Company's and Predecessor's geographic operations:

Year ended
March 31, March 31, March 31,
2001 2000 1999
---------- ----------- ----------

Revenues:
United States $ 143, 963 $ 126,279 $ 102,883
Europe 13,999 11,789 17,835
Bahamas 4,021 2,976 2,723
---------- ----------- ----------
$ 161,983 $ 141,044 $ 123,441
========== =========== ==========

Operating income (loss):
United States $ 2,271 $ 1,150 $ 5,205
Europe 279 (347) 1,132
Bahamas 501 331 483
---------- ----------- ----------
$ 3,051 $ 1,134 $ 6,820
========== =========== ==========

F-24

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

15. GEOGRAPHIC AREA INFORMATION (CONTINUED)

MARCH 31 MARCH 31
2001 2000

Identifiable assets:
United States $ 118,069 $ 125,116
Europe 5,750 5,697
Bahamas 2,163 1,519
--------- ---------
$ 125,982 $ 132,332
========= =========

16. ABANDONED ACQUISITION COSTS AND SPECIAL MANAGEMENT BONUS

During the fourth quarter of fiscal 2001 the Board of Directors granted an
off-plan special bonus pool of $132 to a number of managers for individual
accomplishments.

During the fourth quarter of fiscal 2000, there were two notable costs that
decreased earnings. First, the Board of Directors granted an off-plan special
bonus pool of $312 to a number of managers for individual accomplishments.
Second, the Company pursued several acquisitions of airline service companies
that were not consummated and incurred costs related to the collection of the
Viad Receivable, which resulted in $3,449 of costs charged against earnings.
These two charges aggregated $3,761, and are included in selling, general and
administrative on the statement of operations for the year ended March 31, 2000.

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING/COMBINING FINANCIAL
STATEMENTS

In connection with the acquisition as discussed in Notes 1 and 8, the Company
offered $80 million in aggregate principal amount of Series B 11% Senior Notes
due 2005 (the "Notes"). The Notes are fully and unconditionally guaranteed on a
senior unsecured basis, jointly and severally, by the Company's domestic
subsidiaries (the "Guarantors"). The Guarantors include Aircraft Services
International, Inc., ASIG Miami Inc. (formerly known as Dispatch Services,
Inc.), ASIG Fueling Miami, Inc. (formerly known as Florida Aviation Fueling
Co.), and ASIG Ground Services, Inc. (formerly known as Elsinore Acquisition
Corporation). The condensed consolidating/combining financial statements of the
Guarantors should be read in connection with the consolidated/combined financial
statements of the Company. Separate financial statements of the Guarantors are
not presented because the Company believes such information is not material and
that the condensed consolidating/combining financial statements presented are
more meaningful in understanding the financial position and results of
operations of the Guarantors. Those supplemental guarantor condensed combining
financial statements that do not contain a column for elimination entries and/or
a column for ASIG, Inc. (or the Predecessor) do so because all amounts that
would appear in the column are zero.

F-25

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

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
(CONTINUED)

CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2001

NON-
GUARANTOR GUARANTOR CONSOLIDATED
ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL
------------ -------------- -------------- --------------

ASSETS

Current assets:
Cash and equivalents $ 37 $ (383 ) $ 980 $ 634
Accounts receivable, net - 25,347 2,682 28,029
Prepaid expenses 16 1,082 85 1,183
Spare parts and supplies - 2,555 206 2,761
------------ -------------- -------------- --------------
Total current assets 53 28,601 3,953 32,607

Property, plant and equipment, net 59 39,983 2,966 43,008
Goodwill, net 46,287 584 46,871
Deferred financing costs, net 2,204 2,204
Investments in and advances in joint venture 495 495
Other assets 4 878 (85) 797
------------ -------------- -------------- --------------
Total assets $ 2,320 $ 115,749 $ 7,913 $ 125,982
============ ============== ============== ==============

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
Accounts payable $ - $ 3,676 $ 221 $ 3,897
Due to (from) affiliates (86,439) 79,424 7,015 -
Accrued expenses 1,250 21,092 1,185 23,527
Customer deposits - 3,845 138 3,983
Current portion of notes payable and Term
Loan and other 688 - 43 731
------------ -------------- -------------- --------------
Total current liabilities (84,501) 108,037 8,602 32,138

Notes payable 8,178 - - 8,178
Senior Notes 80,000 - - 80,000

Stockholder's equity (deficit):
Common stock - - - -
Paid-in capital 27,993 - - 27,993
Retained earnings (accumulated deficit) (29,350) 7,712 (263) (21,901)
Accumulated other comprehensive loss -- -- (426) (426)
------------ -------------- -------------- --------------
Total stockholder's equity (deficit) (1,357) 7,712 (689) 5,666
------------ -------------- -------------- --------------
Total liabilities and stockholder's equity $ 2,320 $ 115,749 $ 7,913 $ 125,982
============ ============== ============== ==============

F-26

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

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
(CONTINUED)

CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2000

NON-
GUARANTOR GUARANTOR CONSOLIDATED
ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL
------------ -------------- -------------- --------------

ASSETS

Current assets:
Cash and equivalents $ 111 $ (14) $ 324 $ 421
Accounts receivable, net -- 21,953 2,075 24,028
Prepaid expenses 27 1,159 508 1,694
Spare parts and supplies -- 2,394 34 2,428
------------ -------------- -------------- --------------
Total current assets 138 25,492 2,941 28,571

Property, plant and equipment, net 77 45,176 2,909 48,162
Due from affiliates 112 (112) -- --
Goodwill, net -- 49,006 565 49,571
Deferred financing costs, net 2,736 -- -- 2,736
Investments in and advances in joint venture -- 1 358 359
Receivable from VIAD 2,125 -- - 2,125
Other assets 4 798 6 808
------------ -------------- -------------- --------------
Total assets $ 5,192 $ 120,361 $ 6,779 $ 132,332
============ ============== ============== ==============

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
Accounts payable $ -- $ 6,049 $ 338 $ 6,387
Due to (from) affiliates (82,754) 89,102 (6,348) --
Notes payable to affiliates (12,193) -- 12,193 --
Accrued expenses 1,271 15,134 1,095 17,500
Customer deposits -- 3,519 126 3,645
Current portion of notes payable and Term
Loan and other 500 491 48 1,039
------------ -------------- -------------- --------------
Total current liabilities (93,176) 114,295 7,452 28,571

Notes payable 10,055 -- 20 10,075
Senior Notes 80,000 -- -- 80,000

Stockholder's equity (deficit):
Common stock -- -- -- --
Paid-in capital 27,800 -- -- 27,800
Retained earnings (accumulated deficit) (19,487) 6,066 (674) (14,095)
Accumulated other comprehensive loss -- -- (19) (19)
------------ -------------- -------------- --------------
Total stockholder's equity (deficit) 8,313 6,066 (693) 13,686
------------ -------------- -------------- --------------
Total liabilities and stockholder's equity $ 5,192 $ 120,361 $ 6,779 $ 132,332
============ ============== ============== ==============

F-27

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

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
(CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2001
------------------------------------------------------------
NON-
GUARANTOR GUARANTOR CONSOLIDATED
ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL
------------ -------------- -------------- --------------

Revenues $ -- $ 143,963 $ 18,020 $ 161,983

Costs and expenses:
Operating expenses 43 121,372 15,249 136,664
Selling, general and administrative 28 9,323 1,297 10,648
Amortization of intangibles - 2,731 22 2,753
Depreciation 18 8,177 672 8,867
------------ -------------- -------------- --------------
Total cost and expenses 89 141,603 17,240 158,932
------------ -------------- -------------- --------------
Operating income (loss) (89) 2,360 780 3,051

Other income (expense), net - (111) 199 88
Interest income 3 34 3 40
Interest and other financial expense (9,833) (556) (550) (10,939)
------------ -------------- -------------- --------------
Income (loss) before income taxes (9,919) 1,727 432 (7,760)

Provision (benefit) for income taxes - 25 21 46
------------ -------------- -------------- --------------
Net income (loss) $ (9,919) $ 1,702 $ 411 $ (7,806)
============ ============== ============== ==============

F-28

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

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
(CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2000
------------------------------------------------------------
NON-
GUARANTOR GUARANTOR CONSOLIDATED
ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL
------------ -------------- -------------- --------------

Revenues $ -- $ 126,280 $ 14,764 $ 141,044

Costs and expenses:
Operating expenses 16 103,727 12,666 116,409
Selling, general and administrative 10 11,755 1,501 13,266
Amortization of intangibles 18 6,899 591 7,508
Depreciation -- 2,706 21 2,727
------------ -------------- -------------- --------------
Total cost and expenses 44 125,087 14,779 139,910
------------ -------------- -------------- --------------
Operating income (loss) (44) 1,193 (15) 1,134

Other income (expense), net -- (144) 168 24
Interest income 7 84 9 100
Interest and other financial expense (9,163) (318) (1,102) (10,583)
------------ -------------- -------------- --------------
Income (loss) before income taxes (9,200) 815 (940) (9,325)

Provision (benefit) for income taxes -- -- -- --
------------ -------------- -------------- --------------
Net income (loss) $ (9,200) $ 815 $ (940) $ (9,325)
============ ============== ============== ==============

F-29

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

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
(CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 1999
-------------------------------------------------------
NON
GUARANTOR -GUARANTOR CONSOLIDATED
ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL
------------ -------------- -------------- ---------

Revenues $ - $ 102,883 $ 20,558 $123,441

Cost and expenses:
Operating expenses - 81,878 17,157 99,035
Selling, general and administrative - 7,657 1,208 8,865
Amortization of intangibles - 2,545 - 2,545
Depreciation 9 5,589 578 6,176
------------ -------------- -------------- ---------
Total cost and expenses 9 97,669 18,943 116,621
------------ -------------- -------------- ---------
Operating income (loss) (9) 5,214 1,615 6,820

Other income (expense), net (5) 15 (263) (253)
Interest income 21 129 57 207
Interest and other financial expense (10,102) (86) (1,093) (11,281)
------------ -------------- -------------- ---------
Income (loss) before income taxes (10,095) 5,272 316 (4,507)

Provision (benefit) for income taxes - - 50 50
------------ -------------- -------------- ---------
Net income (loss) before extraordinary item (10,095) 5,272 266 (4,557)
------------ -------------- -------------- ---------
Extraordinary loss on early
extinguishment of debt (213) - - (213)
------------ -------------- -------------- ---------
Net income (loss) $ (10,308) $ 5,272 $ 266 $ (4,770)
============ ============== ============== =========

F-30

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

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
(CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED MARCH 31, 2001
-------------------------------------------------------------
GUARANTOR NON-GUARANTOR CONSOLIDATED
ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL
------------ -------------- --------------- --------------

OPERATING ACTIVITIES
Net Income (loss) $ (9,919) $ 1,702 $ 411 $ (7,806)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Amortization of intangible assets - 2,731 22 2,753
Depreciation 18 8,177 672 8,867
Amortization of deferred financing costs 532 - - 532
Deferred taxes - (2) 2 -
(Gain)/Loss on sale of fixed assets - 115 11 126
Equity loss in joint venture - - (197) (197)
Changes in operating assets and liabilities,
net of acquisition:
Accounts receivable 2,181 (3,449) (1,015) (2,283)
Due from (to) affiliates 112 (1,235) 1,123 -
Prepaid expenses 11 442 58 511
Spare parts and supplies - (161) (172) (333)
Other assets - (217) 228 11
Accounts payable - (2,373) (117) (2,490)
Accrued expenses 8,487 (2,472) 12 6,027
Customer deposits -- 325 13 338
------------ -------------- --------------- --------------

Net cash provided by operating activities 1,422 3,583 1,051 6,056

INVESTING ACTIVITIES
Purchases of property, plant and equipment - (3,464) (375) (3,839)
Investment in ACS 210 (202) 8
Advances to joint venture -- (83) 83 -
------------ -------------- --------------- --------------
Net cash used in investing activities -- (3,337) (494) (3,831)

FINANCING ACTIVITIES
Capital contribution 193 -- - 193
Borrowings, net (1,689) (539) 23 (2,205)
------------ -------------- --------------- --------------
Net cash used in financing activities (1,496) (539) 23 (2,012)
------------ -------------- --------------- --------------
Net increase (decrease) in cash (74) (293) 580 213
Cash at the beginning of the year 111 (90) 400 421
------------ -------------- --------------- --------------
Cash at the end of the year $ 37 $ (383) $ 980 $ 634
============ ============== =============== ==============

F-31

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

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
(CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED MARCH 31, 2000
-------------------------------------------------------------
GUARANTOR NON-GUARANTOR CONSOLIDATED
ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL
------------ -------------- --------------- --------------

OPERATING ACTIVITIES
Net Income (loss) $ (9,179) $ 793 $ (939) $ (9,325)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Amortization of intangible assets -- 2,705 22 2,727
Depreciation 18 6,898 592 7,508
Amortization of deferred financing costs 552 -- -- 552
(Gain)/Loss on sale of fixed assets -- 187 9 196
Provision for bad debt -- -- -- --
Equity loss in joint venture -- (464) 329 (135)
Changes in operating assets and liabilities,
net of acquisition:
Accounts receivable (113) (4,744) (954) (5,811)
Due from (to) affiliates -- (2,723) 2,723 --
Prepaid expenses ( 9) (537) (478) (1,024)
Spare parts and supplies -- (328) ( 5) (333)
Other assets 130 (503) (139) (512)
Accounts payable (153) 1,447 (142) 1,152
Accrued expenses (1,409) 5,714 (235) 4,070
Customer deposits -- 122 35 157
------------ -------------- --------------- --------------

Net cash provided by (used in) operating
activities (10,163) 8,567 818 (778)

INVESTING ACTIVITIES
Purchases of property, plant and equipment (16) (7,096) (915) (8,027)
Purchase of Elsinore business 23 (5,695) -- (5,672)
Investment in ACS -- -- (160) (160)
Changes in Goodwill from ASIG Purchase -- 7 ( 7) --
Advances to joint venture -- 326 (326) --
------------ -------------- --------------- --------------
Net cash used in investing activities 7 (12,458) (1,408) (13,859)

FINANCING ACTIVITIES
Capital contribution -- -- -- --
Borrowings, net 10,226 1,585 19 11,830
Deferred financing costs (83) -- -- (83)
------------ -------------- --------------- --------------
Net cash used in financing activities 10,143 1,585 19 11,747
------------ -------------- --------------- --------------
Net (decrease) increase in cash (13) (2,306) (571) (2,890)
Cash at the beginning of the year 124 2,216 971 3,311
------------ -------------- --------------- --------------
Cash at the end of the year $ 111 $ (90) $ 400 $ 421
============ ============== =============== ==============

F-32

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

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
(CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED MARCH 31, 1999
------------ -------------- --------------- --------------
GUARANTOR NON-GUARANTOR CONSOLIDATED
ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL

OPERATING ACTIVITIES
Net Income (loss) $ (10,308) $ 5,272 $ 266 $ (4,770)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Amortization of intangible assets -- 2,545 -- 2,545
Depreciation 9 5,589 578 6,176
Amortization of deferred financing costs 2,888 -- -- 2,888
Provision for bad debt -- 36 -- 36
Equity loss in joint venture -- -- 157 157
Changes in operating assets and liabilities,
net of acquisition:
Accounts receivable -- (843) (226) (1,069)
Due from (to) affiliates (4,410) 3,763 647 --
Prepaid expenses (18) (504) (1) (523)
Spare parts and supplies -- (350) 13 (337)
Other assets (4) 317 6 319
Accounts payable -- 431 31 462
Accrued expenses 1,319 (1,656) 43 (294)
Customer deposits -- 965 90 1,055
------------ -------------- --------------- --------------

Net cash provided by (used in) by operating
activities (10,524) 15,565 1,604 6,645

INVESTING ACTIVITIES
Purchases of property, plant and equipment (87) (13,349) 5 (13,431)
Purchase of ASIG business (88,487) -- -- (88,487)
Purchase of GAH business -- -- (438) (438)
Advances to joint venture -- -- (200) (200)
------------ -------------- --------------- --------------

Net cash used in investing activities (88,574) (13,349) (633) (102,556)

FINANCING ACTIVITIES
Capital contribution 24,100 -- -- 24,100
Borrowings, net 80,630 -- -- 80,630
Deferred financing costs (5,508) -- -- (5,508)
------------ -------------- --------------- --------------
Net cash provided by financing activities 99,222 -- -- 99,222
------------ -------------- --------------- --------------
Net increase in cash 124 2,216 971 3,311
Cash at the beginning of the year -- -- -- --
------------ -------------- --------------- --------------
Cash at the end of the year $ 124 $ 2,216 $ 971 $ 3,311
============ ============== =============== ==============

F-33

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Stockholder
Aircraft Service International Group, Inc.

We have audited the consolidated financial statements of Aircraft Service
International Group, Inc. and subsidiaries as of March 31, 2001 and 2000, and
for each of the three years in the period ended March 31, 2001, and have issued
our report thereon dated June 22, 2001 (included elsewhere in this Form 10-K).
Our audits also included the financial statement schedule listed in Item 14 (a)
of this Form 10-K. This schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on the schedule based on
our audits.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

/s/ ERNST & YOUNG LLP

Miami, Florida
June 22, 2001

S-1

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC.

MARCH 31, 2001
(DOLLARS IN THOUSANDS)

BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AT END OF
DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS (1) PERIOD
- ----------- ----------- ------------ --------------- ----------

Year Ended March 31, 1999:
Deducted from asset accounts:
Allowance for doubtful accounts $ 546 $ 36 $ (15) $ 567
Deferred tax asset valuation -- 1,786 -- 1,786
----------- ------------ --------------- ----------
Total $ 546 $ 1,822 $ (15) $ 2,353
=========== ============ =============== ==========

Year Ended March 31, 2000:
Deducted from asset accounts:
Allowance for doubtful accounts $ 567 $ 83 $ (5) $ 645
Deferred tax asset valuation 1,786 3,235 -- 5,021
----------- ------------ --------------- ----------
Total $ 2,353 $ 3,318 $ (5) $ 5,666
=========== ============ =============== ==========

Year Ended March 31, 2001:
Deducted from asset accounts:
Allowance for doubtful accounts $ 645 $ (60) $ (37) $ 548
Deferred tax asset valuation 5,021 3,090 -- 8,111
----------- ------------ --------------- ----------
Total $ 5,666 $ 3,030 $ (37) $ 8,659
=========== ============ =============== ==========

<FN>
(1) Uncollectible accounts written off, net of recoveries.

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