##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549


Form 10-K

|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31,
    2005                                             
|          
|OR        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

Commission File No. 0-18605

SWIFT TRANSPORTATION CO., INC.

(Exact name of registrant as specified in its
charter)


|                                                                   |  |                                      
|------------------------------------------------------------------ |  | -------------------------------------
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Nevada                                                             |  | 86-0666860                           
|(State or other jurisdiction of
    incorporation or organization) |  | (IRS Employer
    Identification No.)

2200 South 75th Avenue Phoenix, AZ 85043

(Address of principal executive offices) (Zip
Code)


(602) 269-9700

(Registrants telephone number, including
area code)


Securities Registered Pursuant to Section 12(b) of the
Act:

None


Securities Registered Pursuant to Section 12(g) of the
Act:

|                              |  |                       
|----------------------------- |  | ----------------------
|Common Stock, $.001 par value |  | NASDAQ National Market

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act.     Yes þ          No o

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act.     Yes o          No þ

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

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

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of accelerated filer and large
accelerated filer in Rule 12b-2 of the Exchange Act.
(Check one):

Large accelerated
filer þ          Accelerated
filer o          Non-accelerated
filer o

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the
Act).     Yes o          No þ

At June 30, 2005, the aggregate market value of our common
stock held by non-affiliates was $994,198,070, based on the
closing price of our common stock as quoted on the Nasdaq
National Market as of such date.

The number of shares outstanding of our common stock on
March 1, 2006 was 74,100,639.

DOCUMENTS INCORPORATED BY REFERENCE

Materials from our Notice and Proxy Statement relating to the
2006 Annual Meeting of Stockholders have been incorporated by
reference into Part III, Items 10, 11, 12, 13 and
14.



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TABLE OF CONTENTS

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|PART I         
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|Item 1.         |  | Business                                                                                                                 |    |      | 2  | 
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|Item 1A.        |  | Risk Factors                                                                                                             |    |      | 9  | 
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|Item 1B.        |  | Unresolved Staff Comments                                                                                                |    |      | 12 | 
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|Item 2.         |  | Properties                                                                                                               |    |      | 12 | 
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|Item 3.         |  | Legal Proceedings                                                                                                        |    |      | 13 | 
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|Item 4.         |  | Submission of Matters to a
    Vote of Security Holders                                                                  |    |      | 14 | 
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|PART II        
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|Item 5.         |  | Market for the
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities |    |      | 14 | 
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|Item 6.         |  | Selected Financial and
    Operating Data                                                                                |    |      | 16 | 
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|Item 7.         |  | Managements Discussion
    and Analysis of Financial Condition and Results of Operations                                |    |      | 16 | 
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|Item 7A.        |  | Quantitative and Qualitative
    Disclosures About Market Risk                                                           |    |      | 32 | 
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|Item 8.         |  | Financial Statements and
    Supplementary Data                                                                          |    |      | 33 | 
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|Item 9.         |  | Changes in and Disagreements
    with Accountants on Accounting and Financial Disclosure                                 |    |      | 60 | 
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|Item 9A.        |  | Controls and Procedures                                                                                                  |    |      | 60 | 
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|Item 9B.        |  | Other Information                                                                                                        |    |      | 61 | 
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|PART III       
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|Item 10.        |  | Directors and Executive
    Officers of the Registrant                                                                   |    |      | 62 | 
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|Item 11.        |  | Executive Compensation                                                                                                   |    |      | 62 | 
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|Item 12.        |  | Security Ownership of
    Certain Beneficial Owners and Management and Related Stockholder
    Matters                   |    |      | 62 | 
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|Item 13.        |  | Certain Relationships and
    Related Transactions                                                                       |    |      | 62 | 
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|Item 14.        |  | Principal Accounting Fees
    and Services                                                                               |    |      | 62 | 
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|PART IV        
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|Item 15.        |  | Exhibits and Financial
    Statement Schedules                                                                           |    |      | 63 | 
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|Signatures      |  |                                                                                                                          | 66 |     
|Exhibit 10.11.3
|Exhibit 10.20  
|Exhibit 10.21  
|Exhibit 21     
|Exhibit 23     
|Exhibit 31.1   
|Exhibit 31.2   
|Exhibit 32     



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PART I






|        |         
|------- | --------
|Item 1. | Business

Swift Transportation Co., Inc., a Nevada corporation
headquartered in Phoenix, Arizona, is the holding company for
several operating and other corporations. We are the largest
publicly traded truckload carrier in the United States operating
a fleet of 18,000 tractors and 52,000 trailers and traveling
nearly 40 million miles every week. We operate out of 33
major terminals in 28 states and Mexico combining strong
regional operations, an expanding intermodal operation and
various specialty and dedicated services. The principal
commodities that we transport include retail and discount
department store merchandise, manufactured goods, paper
products, non-perishable and perishable food products, beverages
and beverage containers and building materials. We operate in
predominantly one industry, road transportation, as a truckload
motor carrier and thus have only one reportable segment.

BUSINESS STRATEGY

Our operating and business strategy is focused on the following
key initiatives:



| |   |                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Bottom Line Growth  improving profitability through
    our focus on increasing asset utilization, reducing deadhead,
    controlling costs, increasing fuel surcharge recovery and
    increasing our rate per loaded mile
|
| |  | Network Management  utilizing prioritization and
    optimization tools to balance freight flows, increase velocity
    and improve utilization                                                                            
|
| |  | Active Fleet Management  managing fleet size through
    peaks and troughs in demand cycle, manage in-servicing of new
    units and out-servicing of old trucks for trade or sale and
    lowering overall fleet age      
|
| |  | Grow Complementary Businesses  expanding intermodal,
    dedicated and operations in Mexico                                                                                                                                

OPERATIONS

We provide transportation solutions for customers that are
timely, efficient, safe and cost-effective. We create value for
our customers by providing a variety of transportation services
that help our customers better manage their transportation
needs. Services offered include dry van, refrigerated van,
flat-bed, container, and heavy hauling trailers and are offered
on a for-hire basis or in a dedicated operation specific to a
customer. We offer our services on a local, regional or North
American basis. We have established a network of regional
terminals and facilities strategically located in areas which
have strong, diverse economies and provide access to key
population centers. The terminals are often located in close
proximity to major customers who provide us with significant
traffic volume. Our terminal network establishes a local market
presence and is designed to enable us to respond more rapidly to
our customers and drivers changing requirements.

The achievement of significant regular freight volumes on
high-density routes and the maintenance of consistent shipment
scheduling over these routes are key elements of our operations.
We employ network management and optimization tools to manage
the complexity inherent in operating in short-to-medium-haul
traffic lanes. Network management tools focus on four key
elements:



| |   |                                                                                    
| | - | -----------------------------------------------------------------------------------
| |  | Velocity  how quickly freight moves through our
    network                       
|
| |  | Price  how the load is rated on a revenue per mile
    basis                      
|
| |  | Lane Flow  how the lane fits in our network with
    backhauls or continuous moves
|
| |  | Seasonality  how consistent the freight is throughout
    the year                

Our operating systems provide access to current information
regarding driver and equipment status and location, special load
and equipment instructions, routing and dispatching. These
systems enable our

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Our regional terminal network and operating systems also enable
us to enhance driver recruitment and retention by maintaining
open communication lines with our drivers and by planning loads
that will regularly return drivers to their homes. Our operating
systems also facilitate scheduling regular equipment maintenance
and fueling at our terminals or other locations, as appropriate,
thereby enhancing productivity and asset utilization and
minimizing empty miles and repair costs.

In 2005, we expanded our intermodal capabilities to better serve
our customers who utilize the rail network to transport freight.
Intermodal service combines a linehaul move by rail for the
underlying container with pick-up and delivery at origin and/or
destination point. The pick-up and delivery associated with an
intermodal move is known as drayage. In the third quarter of
2005, we announced our agreement to assume certain of the leases
for up to 3,800 53 foot containers from the BNSF Railway. The
transition of these leases is underway but has been somewhat
slower than initially anticipated. As of December 31, 2005,
we had received approximately 800 containers from the BNSF
Railway. In addition, in the fourth quarter of 2005, we
purchased an additional 1,500 containers. We expect, by the end
of 2006, we will have a fleet of approximately 5,300 containers.
We believe that controlling our own containers and utilizing our
extensive terminal network to complete the dray portion of the
shipment for many loads will enable us to offer complete
door-to-door service for customers that transport shipments over
the rails.

Through our dedicated service offering, we provide more tailored
solutions to meet specific customer needs. Our dedicated
operations are focused on designing and engineering specific
transportation solutions and are typically supported by longer
term contracts. Services offered include hauling dry-van,
flat-bed, and refrigerated trailers and other regular services.
Our dedicated operations are operated as part of our terminal
network and leverage our operating systems to source backhaul
opportunities to optimize the effective positioning of assets.
In our dedicated operations we typically provide transportation
professionals on-site at the customers facilities and have
a centralized team of transportation engineers to design and
optimize transportation solutions to support private fleet
conversions and/or augment the transportation requirements of
our customers. We are also able to offer the capacity throughout
our network to meet seasonal demands and surges.

In addition to our domestic operations, we have a growing cross
border operation into Mexico that primarily ships through
commercial border crossings from Laredo, Texas westward to
California. In January 2004, we completed the acquisition
of Trans-Mex, a carrier that focuses on shipments to and from
Mexico. Our revenue from Mexican operations was $48 and
$43 million in 2005 and 2004, respectively, prior to
intercompany eliminations. Total assets for Trans-Mex were
$24 million as of December 31, 2005 and 2004.

MARKETING AND CUSTOMERS

We concentrate our marketing efforts on expanding the amount of
service we provide to existing customers as well as establishing
new customers with shipment needs that complement our terminal
network and existing routes. We have a sales staff of
approximately 50 persons across the United States and Mexico
that works closely with senior management to establish and
expand accounts. A member of senior management is assigned to
each of our largest customers to ensure a high level of customer
support.

When soliciting new customers, we concentrate on attracting
non-cyclical, financially stable organizations that regularly
ship multiple loads from locations that complement traffic flows
of existing business. Customer shipping point locations are
regularly monitored and, as shipping patterns of existing
customers expand or change, we attempt to obtain additional
customers that will complement the new traffic flow. Through
this strategy we attempt to maximize equipment utilization.

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Our strategy of growing business with existing customers
provides us with a significant base of revenue. Although we do
business with hundreds of customers, over 50% of our revenue is
generated with our largest 25 customers. A summary of the
revenue generated from our largest customers is as follows:

|          |  |                       |     |      |  |      |     |  |  |  |     | 
|--------- |  | --------------------- | --- | ---- |  | ---- | --- |  |  |  | --- | 
|          |  |                      
|          |  | % of Total Revenue   
|          |  | Generated by Group of
|          |  | Customers            
|          |  |                      
|Customers |  | 2005                  |     | 2004 |  | 2003
|          |  |                       |     |      |  |     
|Top 5     |  |                       | 31% |      |  |      | 32% |  |  |  | 30% | 
|         
|         
|         
|         
|Top 10    |  |                       | 40% |      |  |      | 42% |  |  |  | 39% | 
|         
|         
|         
|         
|Top 25    |  |                       | 56% |      |  |      | 58% |  |  |  | 55% | 

Wal-Mart, our largest customer, accounted for approximately 15%,
15% and 12% of our operating revenue during 2005, 2004 and 2003,
respectively. No other customer accounted for more than 10% of
operating revenue during each of the three years ended
December 31, 2005. Our largest customers include retail and
discount department store chains, manufacturers, non-perishable
and perishable food companies, beverage and beverage container
producers and building materials companies. See Risk
Factors for further discussion of risks related to our
customer base.

REVENUE EQUIPMENT

We acquire premium tractors to help attract and retain drivers,
promote safe operations and minimize maintenance and repair
costs. We believe the higher initial investment is recovered
through improved resale value, improved fuel economy and reduced
maintenance costs.

The following table shows the type and age of our owned and
leased equipment at December 31, 2005:

|               |       |             |       |          |  |  |        |        | 
|-------------- | ----- | ----------- | ----- | -------- |  |  | ------ | ------ | 
|Model Year     |       | Tractors(1) |       | Trailers
|               |       |             |       |         
|2006           |       |             | 2,341 |          |  |  | 5,393  |       
|              
|              
|              
|              
|2005           |       |             | 3,694 |          |  |  | 1,598  |       
|              
|              
|              
|              
|2004           |       |             | 3,092 |          |  |  | 1,015  |       
|              
|              
|              
|              
|2003           |       |             | 2,534 |          |  |  | 3,163  |       
|              
|              
|              
|              
|2002           |       |             | 1,606 |          |  |  | 2,177  |       
|              
|              
|              
|              
|2001           |       |             | 465   |          |  |  | 5,094  |       
|              
|              
|              
|              
|2000           |       |             | 177   |          |  |  | 10,414 |       
|              
|              
|              
|              
|1999 and prior |       |             | 556   |          |  |  | 23,143 |       
|               |       |             |       |          |  |  |        |       
|               | Total |             |       | 14,465   |  |  |        | 51,997 | 
|               |       |             |       |          |  |  |        |       



---



|    |                                        
|--- | ---------------------------------------
|(1) | Excludes 3,466 owner-operator tractors.

Historically, we have purchased tractors and trailers
manufactured to our specifications. From 1990 through 2003, we
predominantly acquired tractors manufactured by Freightliner
powered by Series 60 Detroit Diesel engines. Beginning in
2004, we began purchasing the majority of our tractors from
Volvo. We adhere to a comprehensive maintenance program that
minimizes downtime and enhances the resale value of our
equipment. In addition to our maintenance facility in Phoenix,
Arizona, we perform routine servicing and maintenance of our
equipment at most of our regional terminal facilities, thus
avoiding costly on-road repairs and out-of-route trips.

In 2001, the EPA released new requirements for cleaner diesel
engine emissions for model year 2007 tractors. At this time we
do not anticipate accelerating our schedule of tractor purchases
in advance of the time frame for 2007 EPA compliant engines.

We have installed Qualcomm onboard, two-way vehicle satellite
communication systems in virtually all of our tractors. This
communication system links drivers to regional terminals and
corporate headquarters,

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In 2005, we began to implement trailer tracking technology to
better manage our large fleet of vans. This technology assists
us in locating trailers and confirming the empty or loaded
status. We anticipate this technology will help with billing for
detention charges and improve our trailer to tractor ratio. This
information will enable our planners to manage our equipment
more efficiently and should help to reduce the number of miles
driven to locate available trailers. Through December 31,
2005 we had installed trailer tracking systems on approximately
27,000 trailers and expect to install these systems on the
majority of our remaining trailer fleet in 2006.

TRANSPLACE

In April 2000, together with five other publicly traded
truckload carriers, we founded Transplace, LLC, an
Internet-based transportation logistics company. We contributed
our transportation logistics business and associated intangible
assets to Transplace upon its formation. Our interest in
Transplace is approximately 29%. We report our equity interest
in Transplace and our share of the profits and losses of
Transplace in our consolidated financial statements using the
equity method of accounting. See the Notes to Consolidated
Financial Statements.

As a transportation logistics company, Transplace manages
shippers transportation needs and receives a fee for this
service. We may receive from Transplace the opportunity to
provide transportation services to shippers. Through the second
quarter of 2005, we were obligated to use Transplace to obtain
any additional capacity we required from other trucking
companies for our customers. In 2005, Transplace agreed that all
shareholders could source their additional capacity needs and
hence, we restarted our own brokerage operation. During the
years ended December 31, 2005, 2004 and 2003, we received
less than 3% of our operating revenue from Transplace and paid
less than 4% of our purchased transportation to Transplace.

In January 2005, we loaned $6.3 million to a subsidiary of
Transplace. As of December 31, 2005, this note has been
reduced by approximately $3.5 million as we have recorded
our portion of the losses incurred by Transplace. At such time
as the note is repaid in full, the amount of losses previously
recorded as a reduction of the note receivable will be
recognized as a gain.

EMPLOYEES

Terminal Staff

Our larger terminals are staffed with terminal managers, fleet
managers, driver managers and customer service representatives.
Our terminal managers work with the driver managers and the
customer service representatives, as well as other operations
personnel, to coordinate the needs of both our customers and our
drivers. Terminal managers also are responsible for soliciting
new customers and serving existing customers in their areas.
Each fleet manager supervises approximately five driver managers
at our larger terminals. Each driver manager is responsible for
the general operation of approximately 40 trucks and their
drivers, including driver retention, productivity per truck,
routing, fuel consumption, safety and scheduled maintenance.
Customer service representatives are assigned specific customers
to ensure specialized, high-quality service and frequent
customer contact.

In January 2005, we established a new incentive program for our
driver managers and fleet managers. This incentive program is
tied directly to each managers improvements in utilization
of the tractors and safety. We have also initiated a new sales
incentive program directly tied to improvements in revenue per
mile. We will continue both of these programs in 2006. In 2006,
we also implemented an incentive program for the

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Company Drivers

All our drivers must meet or exceed specific guidelines relating
primarily to safety records, driving experience and personal
evaluations, including a physical examination and mandatory drug
testing. Upon being hired, a driver is trained in all phases of
our policies and operations, safety techniques, and
fuel-efficient operation of the equipment. All new drivers must
pass a safety test and have a current Commercial Drivers
License. In addition, we have ongoing driver efficiency and
safety programs to ensure that our drivers comply with our
safety procedures.

Senior management is actively involved with the development and
retention of drivers. Recognizing the continuing need for
qualified drivers, we have developed seven driver training
academies across the country. Our academies are strategically
located in areas where external driver-training organizations
are lacking. In other areas of the country, we have contracted
with driver-training schools, which are managed by outside
organizations including local community colleges. Candidates for
the schools must be at least 21 years old with a high
school education or equivalent, pass a basic skills test and
pass the U.S. Department of Transportation (US
DOT) physical examination, which includes drug and alcohol
screening. Students are required to complete three weeks of
classroom study and driving range time and a six to eight week,
on-the-road training program. We have established a driver
mentor program to match experienced drivers with newer drivers
to assist them as they start out.

In order to attract and retain qualified drivers and promote
safe operations, we purchase premium quality tractors equipped
with optional comfort and safety features, such as air ride
suspension, air conditioning, high quality interiors, power
steering, engine brakes and raised roof double sleeper cabs. We
base our drivers at terminals and monitor each drivers
location on our computer system. We use this information to
schedule the routing for our drivers so they can return home
frequently. The majority of company drivers are compensated
based on trip miles, loading/unloading and number of stops or
deliveries, plus bonuses. The drivers base pay per mile
increases with the drivers length of experience. Drivers
employed by us participate in company-sponsored health, life and
dental insurance plans and are eligible to participate in the
401(k) Plan and an Employee Stock Purchase Plan.

We have adopted a speed limit of 65 miles per hour for our
tractors and 68 miles per hour for owner-operator tractors,
which are below the speed limits of many states. We believe our
adopted speed limit reduces accidents, enhances fuel mileage and
minimizes maintenance expense compared to operating without our
imposed speed limits. Substantially all of our tractors are
equipped with electronically controlled engines that are set to
limit the speed of the vehicle.

Driver Retention

We believe our innovative driver-training programs, driver
compensation, regionalized operations, driver tracking and
late-model equipment provide important incentives to attract and
retain qualified drivers. We have made a concerted effort to
reduce the level of driver turnover and increase our driver
satisfaction. We monitor the effectiveness of our driver
programs by measuring driver turnover and actively addressing
issues that may cause driver turnover to increase. Although
historically we have had no significant downtime due to
inability to secure qualified drivers, no assurance can be given
that a shortage of qualified drivers will not adversely affect
us in the future.

Year-end Employment

As of December 31, 2005, we employed approximately
21,900 full-time persons, of whom approximately 17,000
were drivers (including driver trainees), 1,700 were mechanics
and other equipment maintenance personnel and the balance were
support personnel, such as sales personnel, corporate managers
and administrative personnel. No driver or other employee is
represented by a collective bargaining unit. In the opinion of
management, our relationship with our drivers and employees is
good.

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OWNER-OPERATORS

To enhance our business, we enter into contracts with
owner-operators. These owner-operators are drivers or fleet
operators who, unlike drivers we employ, own or lease their
tractor and are responsible for their own operating costs (for
example, fuel and maintenance). The owner-operators operate
under our authority and are generally compensated based upon
trip miles. We believe owner-operators provide us with a
noticeably higher return on our invested assets because
owner-operators incur the cost of acquiring the equipment. As of
December 31, 2005, owner-operators comprised approximately
19% of our total fleet. If we are unable to continue to contract
with a sufficient number of owner-operators or fleet operators,
it could adversely affect our operations and profitability.

SAFETY AND INSURANCE

Safety is and has always been the top priority for us. We have
an active safety and loss prevention program at each of our
terminals. We have adopted maximum speed limits which are below
the statutory speed limits in many states. Supervisors engage in
ongoing training of drivers regarding safe vehicle operations.
Over the past two years we have established and filled three
regional safety manager positions and an additional 16 safety
managers dedicated to the larger terminals. The purpose of these
new positions is loss prevention. As a result of this focus on
safety we have seen our total accidents per million miles
decline steadily over the past few years.

In December 2004, we entered into an agreement with insurance
carriers to provide transportation liability insurance with an
aggregate limit of $200 million for 2005 and 2006. The new
policy increased the self-insured portion to $10 million
per occurrence and was extended through 2006. After reviewing
actuarial studies of our loss history, frequency and severity,
we determined this to be the optimal insurance solution for us
at this time.

Our owner-operators are covered by our liability policy but are
responsible for their own physical damage and workers
compensation plans. For information on our workers compensation
plan, see the Salaries, Wages and Employee Benefits section in
the Results of Operations discussion in Managements
Discussion and Analysis below.

FUEL

In order to reduce fuel costs, we purchase approximately 56% of
our fuel in bulk at 31 terminals in the United States. We store
fuel in underground storage tanks at four of our bulk fueling
terminals and in above ground storage tanks at our other bulk
fueling terminals. We believe that we are in substantial
compliance with applicable environmental laws and regulations.
Shortages of fuel, increases in fuel prices or rationing of
petroleum products could have a material adverse effect on our
operations and profitability. In response to increases in fuel
costs, we have implemented fuel surcharges to pass on to our
customers the majority of the increases in fuel costs. However,
there can be no assurance that such fuel surcharges will
adequately cover future increases in fuel prices. We believe
that our most effective protection against fuel cost increases
is to maintain a fuel efficient fleet and to implement fuel
surcharges when such option is necessary and available. We
generally have not used derivative-type products as a hedge
against higher fuel costs in the past but continue to evaluate
this possibility.

COMPETITION

The trucking industry is extremely competitive and fragmented.
We compete primarily with regional, medium-haul truckload
carriers. We believe, because of our cost efficiencies,
productive equipment utilization and financial resources, that
we have a competitive advantage over most regional truckload
carriers. We believe that competition for the freight
transported by us is based, in the long term, as much upon
service and efficiency as on freight rates. Major shippers
continue to reduce the number of carriers they use for their
regular freight needs. This has resulted in a relatively small
number of financially stable core carriers and

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REGULATION

We are regulated by the US DOT. This regulatory authority has
broad powers, generally governing matters such as authority to
engage in motor carrier operations, safety, hazardous materials
transportation, certain mergers, consolidations and acquisitions
and periodic financial reporting. The trucking industry is
subject to regulatory and legislative changes, which can affect
the economics of the industry. We are also regulated by various
state agencies and, in Mexico, by other regulatory authorities.

Our safety rating is satisfactory, the highest rating given by
the Federal Motor Carrier Safety Administration (FMCSA), a
department within the US DOT. There are three safety ratings
assigned to motor carriers: satisfactory,
conditional, which means that there are deficiencies
requiring correction, but not so significant to warrant loss of
carrier authority and unsatisfactory, which is the
result of acute deficiencies and would lead to revocation of
carrier authority. In October 2005, the FMCSA completed a review
of our operations and safety management controls. Upon
completion of the review process, the FMCSA assigned to us a
safety fitness rating of satisfactory. The
satisfactory safety fitness rating resolved our
litigation with the FMCSA over the agencys proposed
conditional rating in 2003. Our current litigation
with the FMCSA over civil penalties assessed in connection with
audits in 2001 and 2003, in an aggregate amount of approximately
$87,000, is not affected by the FMCSAs recent
satisfactory determination. We are also in
litigation with the FMCSA over civil penalties assessed in
connection with the audit in 2005 in an amount less than
$20,000. See our Risk Factors for further discussion
related to regulations that may affect our business.

Our operations are also subject to various federal, state and
local environmental laws and regulations dealing with
transportation, storage, presence, use, disposal and handling of
hazardous materials, discharge of stormwater and underground
fuel storage tanks. The Code of Federal Regulations regarding
the transportation of hazardous materials, group hazardous
materials into different classes according to risk. We transport
only low to medium risk hazardous material, and less than 3% of
our total shipments contain any hazardous materials. These
regulations require us to maintain minimum levels of insurance.
In addition, we would be responsible for the cleanup of any
releases caused by our operations or business. We believe that
our operations are in substantial compliance with current laws
and regulations and do not know of any existing environmental
condition that would cause a material adverse effect on our
business or operating results.

SEASONALITY

In the transportation industry, results of operations generally
show a seasonal pattern. As customers ramp up for the holiday
season at year-end, the late third and fourth quarters have
historically been our strongest volume quarters. As customers
reduce shipments after the winter holiday season, the first
quarter has historically been a lower volume quarter. Our
operating expenses also tend to be higher in the winter months
primarily due to colder weather, which causes higher fuel
consumption from increased idle time.

INTERNET WEB SITE

Additional information about us is available on our Internet web
site, www.swifttrans.com. Our annual reports on Form 10-K,
quarterly reports on Form 10-Q and other reports filed
pursuant to Section 13 or 15(d) of the Exchange Act
are available, free of charge, on our website as soon as
practical after they are filed. In addition, our press releases
are posted to our web site as soon as practical after they are
issued publicly. The information on our web site is not
considered part of this report.

8



---



##### Table of Contents








|         |             
|-------- | ------------
|Item 1A. | Risk Factors

Our future operating results and financial condition are
dependent on our ability to successfully provide truckload
carrier services to meet dynamic customer demand patterns.
Inherent in this process are a number of factors that we must
successfully manage in order to achieve favorable future
operating results and financial condition. Potential risks and
uncertainties that could affect future operating results and
financial condition include, without limitation, the factors
discussed below.



| |                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our operating results fluctuate and may be materially
    adversely affected by economic conditions and business factors
    unique to the trucking industry.

Our business is dependent upon a number of factors, many of
which are beyond our control. These factors include excess
capacity in the trucking industry, difficulty in attracting and
retaining qualified drivers, interest rates, significant
increases or fluctuations in fuel prices, fuel taxes, tolls,
license and registration fees and insurance and claims costs, to
the extent not offset by increases in freight rates. Our results
of operations also are affected by recessionary economic cycles
and downturns in customers business cycles, particularly
in market segments and industries (such as retail, manufacturing
and paper products) in which there is a concentration of
customers. Economic and other conditions may adversely affect
our customers and their ability to pay for our services. Any
customers so affected represent a potential for loss. We also
could be affected by terrorist activities, natural disasters, or
enhanced security measures, which could impact the economy or
otherwise increase operating expenses and reduce productivity.
In addition, our results of operations are affected by seasonal
factors. Customers tend to reduce shipments after the winter
holiday season and operating expenses tend to be higher in the
winter months primarily due to colder weather that causes higher
fuel consumption from increased idle time.



| |                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------
| | We may experience substantial difficulty in attracting and
    retaining qualified drivers, including independent
    contractors.

In the past, there have been shortages of drivers in the
trucking industry and such shortages may occur in the future.
Periodically, the trucking industry experiences substantial
difficulty in attracting and retaining qualified drivers,
including independent contractors. If we are unable to continue
to retain and attract drivers or contract with independent
contractors and fleets, we could be required to adjust our
driver compensation package, let trucks sit idle or otherwise
operate at a reduced level, which could adversely affect our
operations and profitability.



| |                                                                            
| | ---------------------------------------------------------------------------
| | Our operations are particularly sensitive to volatility in
    fuel prices.

Significant increases or rapid fluctuations in fuel prices are
major issues for the transportation industry. Increases in fuel
costs, to the extent not offset by rate per mile increases or
fuel surcharges, have an adverse effect on our operations and
profitability. We believe that the most effective protection
against fuel cost increases is to maintain a fuel-efficient
fleet and to implement fuel surcharges when such an option is
necessary and available. We have fuel surcharge revenue programs
in place with a majority of our customers which has helped to
offset the majority of the negative impact of rising fuel prices
associated with loaded or billed miles. However, we also incur
fuel costs that cannot be recovered associated with empty miles,
out of route miles or the time when our engines are idling. In
addition, there can be timing differences between a change in
our fuel costs and the timing of recovery of fuel surcharge
billed to customers. There can be no assurance that such fuel
surcharges can be maintained indefinitely or will be
sufficiently effective. As of December 31, 2005, we have
not used derivative-type hedging instruments, but periodically
evaluate their possible use.



| |                                                                   
| | ------------------------------------------------------------------
| | The trucking industry is extremely competitive and
    fragmented.

The trucking industry is extremely competitive and fragmented.
No single truckload carrier has a significant market share. We
compete with many other truckload carriers of varying sizes,
customers private fleets, and, to a lesser extent, with
railroads which may limit our growth opportunities and reduce
profitability.

9



---



##### Table of Contents







| |                                                 
| | ------------------------------------------------
| | The trucking industry is very capital intensive.

The trucking industry is very capital intensive. We depend on
cash from operations, operating leases and debt financing for
funds to expand the size of our fleet and maintain modern
revenue equipment. If we were unable in the future to enter into
acceptable financing arrangements, it would limit our operations
and profitability.



| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | We are dependent on certain personnel that are key to the
    management of our business and operations.

Many of our executive officers are key to the management of our
business and operations. Our future success depends on our
ability to retain our executive officers and other capable
managers. Although we believe we could replace key personnel
given adequate prior notice, the unexpected departure of key
executive officers could cause substantial disruption to our
business and operations. In addition, even if we are able to
continue to retain and recruit talented personnel we may not be
able to do so without incurring substantial costs.



| |                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We operate in a highly regulated industry and changes in
    existing regulations or violations of existing or future
    regulations could have a material adverse effect on our
    operations and profitability.

We are regulated by the US DOT and the FMCSA. We may also become
subject to new or more comprehensive or restrictive regulations
relating to fuel emissions, ergonomics or other issues regulated
by the United States Environmental Protection Agency
(EPA) or other state or federal agencies. In
addition, our operations are subject to various environmental
laws and regulations dealing with the transportation, storage,
presence, use, disposal and handling of hazardous materials,
discharge of storm water and underground fuel storage tanks. If
we should be involved in a spill or other accident involving
hazardous substances or if we were found to be in violation of
applicable laws or regulations, we could be subject to fines and
penalties that could have a material adverse effect on our
business and operating results. EPA regulations continue to
require significantly reduced engine emissions. A new set of
standards is expected to become effective in 2007, which may
increase the cost and reduce the fuel efficiency of new engines.
The increased cost of complying with such regulations could have
a material adverse effect on our business and operating results.

In October 2005, the FMCSA, a department within the US DOT,
completed a review of our operations and safety management
controls. Upon completion of the review process, the FMCSA
assigned to us a safety fitness rating of
satisfactory, the highest rating given by the FMCSA.
The satisfactory safety fitness rating resolves our
litigation with the FMCSA over the agencys proposed
conditional rating in 2003. There are three possible
ratings assigned by FMSCA: satisfactory, conditional and
unsatisfactory. If FMSCA determines our safety rating to be
conditional in a future review, it could result in
certain material adverse consequences to our business and
operations.

Although a conditional rating will not result in the loss of our
authority to transport materials, certain industry standard
provisions in our contracts with our customers could allow the
customer to reduce or terminate its relationship with us. If a
significant customer or large number of smaller customers, or
combination thereof, reduce or terminate their relationship with
us, it would have a material adverse affect on our business. In
addition, there is a possibility that a drop to conditional
status could affect our ability to self-insure for personal
injury and property damage relating to the transportation of
freight, which could cause our insurance costs to increase.

The FMCSA revised their Hours-of-Service (HOS)
regulations effective January 2004 to increase the maximum daily
drive time from 10 to 11 hours, but no longer allowed for
breaks in the on-duty period. We believe that these changes may
have caused productivity losses as there is wait time while the
tractors are loaded, unloaded or otherwise detained which cannot
be recovered with additional drive time. This also has an impact
on our driver wages since they are paid primarily on the number
of trip miles. In such situations, we have worked with our
shippers to try to minimize the loss of productivity. When
necessary, we have billed our

10



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##### Table of Contents





The FMCSA then issued new HOS regulations effective October
2005. In general, the regulations did not reduce the amount of
available driving hours, but restricted the sleeper berth
provision. The new sleeper berth provision allows the
drivers required rest period of 10 hours to be split
into two parts, but requires one period to be at least 8
consecutive hours. These changes could impact the flexibility of
solo and team drivers to effectively manage their available work
hours. If we are unsuccessful in working with customers on the
timing of pick-ups and deliveries or in working with drivers to
optimize their available driving hours, the changes could result
in a loss of productivity.



| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | Volatility in the used equipment sales market could
    adversely affect our operations.

We rely on the sale of used equipment to offset the cost of
purchasing new equipment. From 1999 to 2003, used tractor values
deteriorated significantly. In 2004, used tractor prices began
rising and remained stable in 2005. Should this trend reverse
and prices deteriorate, it could have a material adverse effect
on our business and operating results.



| |                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------
| | We currently self-insure for certain liabilities which
    subjects us to various risks, some of which are beyond our
    control.

At the present time, we self-insure for liability resulting from
cargo loss, personal injury, workers compensation, and
property damage, and maintain insurance with licensed insurance
companies above our limits on self-insurance. (See Safety
and Insurance in the Business section above.) To the
extent we were to experience an increase in the number of claims
for which we are self-insured, our operating results would be
materially adversely affected. In addition, significant
increases in insurance costs, to the extent not offset by
freight rate increases, or difficulties in obtaining insurance
would reduce our profitability. Although we endeavor to limit
this, we may also have some exposure to the extent any of our
shipping subcontractors are inadequately insured for any
accident.



| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | We depend on key customers, the loss of which may have a
    material adverse effect on our operations and
    profitability.

A significant portion of our revenue is generated from several
key customers. During 2005, our top 25, 10 and 5 customers
accounted for 56%, 40% and 31% of revenues, respectively. Our
largest customer, Wal-Mart accounted for 15% of our revenues in
2005. We do not have long-term contractual relationships with
many of our key customers, and there can be no assurance that
our relationships with our key customers will continue as
presently in effect. A reduction in or termination of our
services by a key customer could have a material adverse effect
on our business and operating results.



| |                                                                                   
| | ----------------------------------------------------------------------------------
| | We depend on third parties, particularly in our expanding
    intermodal business.

Our intermodal business utilizes railroads and some third-party
dray carriers to transport freight for our customers. Changes in
the service level, availability or cost of such services could
have material adverse effect on our operations and
profitability. In addition, we are significantly expanding our
intermodal business and, as a result, may experience slower
initial demand and operational difficulties as we develop that
business.

Also see the discussion in Item 5 under the heading
Factors That May Affect Future Stock Performance
below.

11



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##### Table of Contents








|         |                          
|-------- | -------------------------
|Item 1B. | Unresolved Staff Comments

None.






|        |           
|------- | ----------
|Item 2. | Properties

Our headquarters is situated on approximately 300 acres in
the southwestern part of Phoenix, Arizona. The headquarters
consists of a three story administration building with
126,000 square feet of office space; repair and maintenance
buildings with 106,000 square feet; a 20,000 square
foot drivers center and restaurant; an 8,000 square
foot recruiting and training center; a 6,000 square foot
warehouse; a 140,000 square foot parking facility; a two
bay truck wash; and an eight lane fueling facility. In addition,
we lease office space and land to operate a driver training
school at another location in Phoenix.

We have terminals throughout the continental United States and
Mexico. A terminal may include customer service, marketing, fuel
and repair facilities. We also operate driver training schools
in several cities. The following table provides information
regarding our significant facilities or terminals:

|                                |  |                 |  |                                                                      
|------------------------------- |  | --------------- |  | ---------------------------------------------------------------------
|Location                        |  | Owned or Leased |  | Description                                                          
|                                |  |                 |  |                                                                      
|                               
|                               
|                               
|                               
|Western Region                  |  |                 |  |                                                                      
|                               
|                               
|                               
|                               
|Arizona  Phoenix               |  | Owned/Leased    |  | Customer Service, Marketing, Fuel, Repair, Driver
    Training School
|                               
|                               
|                               
|                               
|Arizona  Nogales               |  | Owned/Leased    |  | Customer Service                                                     
|                               
|                               
|                               
|                               
|California  Fontana            |  | Owned/Leased    |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|California  Lathrop            |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|California  Mira Loma          |  | Owned           |  | Fuel, Repair                                                         
|California  Wilmington         |  | Owned           |  | Customer Service, Fuel, Repair                                       
|                               
|                               
|                               
|                               
|Colorado  Denver               |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|Idaho  Lewiston                |  | Owned/Leased    |  | Customer Service, Marketing, Fuel, Repair, Driver
    Training School
|                               
|                               
|                               
|                               
|Nevada  Sparks                 |  | Owned           |  | Customer Service, Fuel, Repair                                       
|                               
|                               
|                               
|                               
|New Mexico  Albuquerque        |  | Owned           |  | Customer Service, Fuel, Repair                                       
|                               
|                               
|                               
|                               
|Oregon  Troutdale              |  | Owned           |  | Customer Service, Marketing, Fuel, Repair, Driver
    Training School
|                               
|                               
|                               
|                               
|Texas  El Paso                 |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|Utah  Salt Lake City           |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|Washington  Sumner             |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|Central Region                  |  |                 |  |                                                                      
|                               
|                               
|                               
|                               
|Illinois  Manteno              |  | Owned           |  | Customer Service, Fuel, Repair                                       
|                               
|                               
|                               
|                               
|Indiana  Gary                  |  | Owned           |  | Customer Service, Fuel, Repair                                       
|                               
|                               
|                               
|                               
|Kansas  Edwardsville           |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|Michigan- New Boston            |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|Minnesota  Inver Grove Heights |  | Leased          |  | Customer Service, Marketing, Repair                                  
|                               
|                               
|                               
|                               
|Missouri  Kansas City          |  | Leased          |  | Driver Training School                                               
|                               
|                               
|                               
|                               
|Ohio  Columbus                 |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|Oklahoma  Oklahoma City        |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|Tennessee  Memphis             |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|Tennessee  Millington          |  | Leased          |  | Driver Training School                                               
|                               
|                               
|                               
|                               
|Texas  Houston                 |  | Owned/Leased    |  | Customer Service, Repair                                             
|                               
|                               
|                               
|                               
|Texas  Lancaster               |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                               
|                               
|                               
|                               
|Texas  Laredo                  |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            

12



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##### Table of Contents



|                            |  |                 |  |                                                                      
|--------------------------- |  | --------------- |  | ---------------------------------------------------------------------
|Location                    |  | Owned or Leased |  | Description                                                          
|                            |  |                 |  |                                                                      
|                           
|                           
|                           
|                           
|Texas  San Antonio         |  | Leased          |  | Driver Training School                                               
|                           
|                           
|                           
|                           
|Wisconsin  Town of Menasha |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                           
|                           
|                           
|                           
|Eastern Region              |  |                 |  |                                                                      
|                           
|                           
|                           
|                           
|Florida  Ocala             |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                           
|                           
|                           
|                           
|Georgia  Decatur           |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                           
|                           
|                           
|                           
|New Jersey  Avenel         |  | Owned           |  | Customer Service                                                     
|                           
|                           
|                           
|                           
|New York  Syracuse         |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                           
|                           
|                           
|                           
|North Carolina  Eden       |  | Owned           |  | Customer Service, Fuel, Repair                                       
|                           
|                           
|                           
|                           
|Pennsylvania- Jonestown     |  | Owned           |  | Customer Service, Fuel, Repair                                       
|                           
|                           
|                           
|                           
|South Carolina  Greer      |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            
|                           
|                           
|                           
|                           
|Virginia  Richmond         |  | Owned           |  | Customer Service, Marketing, Fuel, Repair, Driver
    Training School
|                           
|                           
|                           
|                           
|Mexico                      |  |                 |  |                                                                      
|                           
|                           
|                           
|                           
|Tamaulipas  Nuevo Laredo   |  | Owned           |  | Customer Service, Marketing, Fuel, Repair                            

In addition to the facilities listed above, we maintain various
drop yards throughout the United States and Mexico. As of
December 31, 2005, our aggregate monthly rent for all
leased properties was $279,000.






|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

We are a party to routine litigation incidental to our business,
primarily involving claims for personal injury or property
damage incurred in the transportation of freight. Our insurance
program for liability, physical damage and cargo damage involves
self-insurance with varying risk retention levels. Claims in
excess of these risk retention levels are covered by insurance
in amounts which management considers to be adequate.

Beginning in November 2004, three putative shareholder class
action lawsuits (Davidco Investors LLC v. Swift
Transportation Co., Inc., et al., Case
No. 2:04cv02435; Greene v. Swift Transportation Co.,
Inc., et al., Case No. 2:04cv02492; and Tuttle v.
Swift Transportation Co., Inc., et al., Case
No. 2:04cv02874) were filed in the United States District
Court for the District of Arizona against us and certain of our
directors and officers, alleging violations of federal
securities laws related to disclosures made by us regarding
driver pay, depreciation, fuel costs and fuel surcharges; the
effects of the FMCSA revised hours-of-service regulations; the
effects of a purported change in our FMCSA safety rating;
Swifts stock repurchase program; and certain stock
transactions by two of the individual defendants. The complaints
sought unquantified damages on behalf of the putative class of
persons who purchased our common stock between October 16,
2003 and October 1, 2004. On April 29, 2005, the Court
issued an order consolidating the cases as In re Swift
Transportation Co., Inc. Securities Litigation, Master File No.,
CV-04-2435-PHX-NVW. On June 8, 2005, the Court appointed
United Food and Commercial Workers Local 1262 and Employers
Pension Plan as the lead plaintiff. Thereafter, lead plaintiff
filed a consolidated amended complaint on August 19, 2005.
The consolidated amended complaint seeks unquantified damages on
behalf of a putative class of persons who purchased Swifts
common stock between October 16, 2003 and
September 15, 2004. The allegations in the consolidated
amended complaint are substantially similar to those in the
previously filed complaints. Defendants filed a motion to
dismiss the consolidated amended complaint on October 21,
2005. Both lead plaintiffs opposition to that motion and
defendants reply brief have been filed. Oral arguments
were heard on February 17, 2006 on defendants motion
to dismiss the complaint. We believe that we have meritorious
defenses to the claims asserted, and we intend to vigorously
defend against the consolidated amended complaint.

On February 28, 2005, a shareholder derivative action was
filed in the U.S. District Court for Clark County, Nevada,
entitled Rivera v. Eller, et al., Case
No. A500269, against certain of our directors and officers,
alleging breaches of fiduciary duty and unjust enrichment. The
complaint named the Company solely as a nominal defendant
against which no recovery was sought. The complaint alleged that
the individual defendants breached their fiduciary duties, that
one of the defendants violated state laws relating to insider

13



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##### Table of Contents





The impact of the final disposition of these lawsuits cannot be
assessed at this time.






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

No matters were submitted to a vote of our security holders
during the fourth quarter of 2005.




PART II






|        |                                                                                                                         
|------- | ------------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for the Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities

Our common stock is publicly traded on the NASDAQ National
Market (NASDAQ) under the symbol SWFT.
The following table sets forth the high and low sales prices of
the common stock reported by NASDAQ for the periods shown.

|               |  |              |       |     |  |   |       | 
|-------------- |  | ------------ | ----- | --- |  | - | ----- | 
|               |  |             
|               |  | Common Stock
|               |  |             
|               |  | High         |       | Low
|               |  |              |       |    
|2005           |  |              |       |     |  |   |       | 
|              
|              
|              
|              
|First Quarter  |  | $            | 26.19 |     |  | $ | 18.88 | 
|              
|              
|              
|              
|Second Quarter |  |              | 25.95 |     |  |   | 20.36 | 
|              
|              
|              
|              
|Third Quarter  |  |              | 24.64 |     |  |   | 16.25 | 
|              
|              
|              
|              
|Fourth Quarter |  |              | 21.24 |     |  |   | 16.55 | 
|              
|              
|              
|              
|2004           |  |              |       |     |  |   |       | 
|              
|              
|              
|              
|First Quarter  |  | $            | 22.20 |     |  | $ | 14.68 | 
|              
|              
|              
|              
|Second Quarter |  |              | 18.91 |     |  |   | 14.75 | 
|              
|              
|              
|              
|Third Quarter  |  |              | 20.85 |     |  |   | 15.49 | 
|              
|              
|              
|              
|Fourth Quarter |  |              | 22.75 |     |  |   | 16.50 | 

On March 1, 2006, the last reported sales price of our
common stock was $24.14 per share. At that date, the number
of stockholder accounts of record of our common stock was
approximately 3,800. We estimate there are approximately 8,000
beneficial holders of our common stock.

We have not paid cash dividends on our common stock in the
current year or either of the two preceding fiscal years. Our
revolving credit facility includes limitations on the payment of
cash dividends. It is the current intention of management to
retain earnings to finance the growth of our business. Future
payment of cash dividends will depend upon our financial
condition, results of operations, and capital requirements, as
well as other factors deemed relevant by the Board of Directors.

14



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##### Table of Contents



Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

|                                        |  |                  |           |                |  |                     |       |                       |  |  |           |  |  |   |   | 
|--------------------------------------- |  | ---------------- | --------- | -------------- |  | ------------------- | ----- | --------------------- |  |  | --------- |  |  | - | - | 
|                                        |  |                  |           |                |  |                     |       | Maximum Number       
|                                        |  |                  |           |                |  | Total Number of     |       | (or Approximate      
|                                        |  |                  |           |                |  | Shares Purchased as |       | Dollar Value) of     
|                                        |  |                  |           |                |  | Part of Publicly    |       | Shares that May Yet  
|                                        |  | Total Number of  |           | Average Price  |  | Announced Plans     |       | Be Purchased Under   
|Period                                  |  | Shares Purchased |           | Paid per Share |  | or Programs         |       | the Plans or Programs
|                                        |  |                  |           |                |  |                     |       |                      
|October 1, 2005 to
    October 31, 2005 |  |                  | 0         |                |  |                     |       |                       |  |  | 0         |  |  | $ |  | 
|                                       
|                                       
|                                       
|                                       
|November 1, 2005 to November 30, 2005   |  |                  | 1,385,192 |                |  | $                   | 19.91 |                       |  |  | 1,385,192 |  |  |   |  | 
|                                       
|                                       
|                                       
|                                       
|December 1, 2005 to December 31, 2005   |  |                  | 602,989   |                |  | $                   | 19.93 |                       |  |  | 602,989   |  |  |   |  | 
|                                        |  |                  |           |                |  |                     |       |                       |  |  |           |  |  |   |   | 
|Total                                   |  |                  | 1,988,181 |                |  | $                   | 19.92 |                       |  |  | 1,988,181 |  |  | $ |  | 
|                                        |  |                  |           |                |  |                     |       |                       |  |  |           |  |  |   |   | 

Our Board of Directors authorized and on September 19,
2005, we adopted and implemented a new share repurchase program
under which we may acquire our common stock using the proceeds
received from the exercise of stock options to minimize the
dilution from the exercise of stock options. The purchases will
be made in accordance with SEC rules 10b5-1 and 10b-18, which
limit the amount and timing of repurchases and removes any
discretion with respect to purchases on our part.

Factors That May Affect Future Stock Performance

The performance of our common stock is dependent upon several
factors, including those set forth below and in Risk
Factors

Influence by Principal Stockholder. Jerry C. Moyes and
trusts established for the benefit of Jerry C. Moyes and his
family beneficially own approximately 28% of our common stock.
In addition, Mr. Moyes brother, Ronald is the
beneficial owner of approximately 12% of our common stock.
Accordingly, Mr. Moyes and his family could have a
significant influence upon our activities, as well as on all
matters requiring approval of the stockholders, including
electing members of our Board of Directors and causing or
restricting our sale or merger. This concentration of ownership,
as well as the ability of the Board to establish the terms of
and issue preferred stock without stockholder approval, may have
the effect of delaying or preventing changes in control or
management, including transactions in which stockholders might
otherwise receive a premium for their shares over their current
market prices.

Possible Volatility of Stock Price. The market price of
our common stock could be subject to significant fluctuations in
response to certain factors, including, among others, variations
in our anticipated or actual results of operations or other
companies in the transportation industry, changes in conditions
affecting the economy generally, fluctuations in interest rates
and fuel prices, increases in insurance premiums affecting the
trucking industry generally, the depressed market for used
tractors affecting the trucking industry generally,
analysts reports or general trends in the industry, as
well as other factors unrelated to our operating results.

15



---



##### Table of Contents








|        |                                      
|------- | -------------------------------------
|Item 6. | Selected Financial and Operating Data

The selected consolidated financial data presented below for,
and as of the end of, each of the years in the five-year period
ended December 31, 2005 is derived from our Consolidated
Financial Statements. The Consolidated Financial Statements as
of December 31, 2005 and 2004, and for each of the years in
the three-year period ended December 31, 2005 and the
independent registered public accountants reports thereon,
are included in Item 8 of this Form 10-K. This data
should be read in conjunction with the Consolidated Financial
Statements and Notes thereto included in Item 8 of this
Form 10-K.

|                                              |                  |                                                                      |           |        |  |      |           |        |  |      |           |        |  |   |           |        |  |   |           |        | 
|--------------------------------------------- | ---------------- | -------------------------------------------------------------------- | --------- | ------ |  | ---- | --------- | ------ |  | ---- | --------- | ------ |  | - | --------- | ------ |  | - | --------- | ------ | 
|                                              |                  |                                                                     
|                                              |                  | Years Ended December 31,                                            
|                                              |                  |                                                                     
|                                              |                  | 2005                                                                 |           | 2004   |  | 2003 |           | 2002   |  | 2001
|                                              |                  |                                                                      |           |        |  |      |           |        |  |     
|                                              |                  |                                                                     
|                                              |                  | (Dollar Amounts in Thousands, Except per Share and per Mile Amounts)
|                                             
|                                             
|                                             
|                                             
|Consolidated Statements of Earnings
    Data: |                  |                                                                      |           |        |  |      |           |        |  |      |           |        |  |   |           |        |  |   |           |       
|                                             
|                                             
|                                             
|                                             
|Operating revenue                             |                  | $                                                                    | 3,197,455 |        |  | $    | 2,826,201 |        |  | $    | 2,397,655 |        |  | $ | 2,101,472 |        |  | $ | 2,112,221 |       
|                                             
|                                             
|                                             
|                                             
|Earnings before income taxes                  |                  | $                                                                    | 164,350   |        |  | $    | 159,949   |        |  | $    | 127,982   |        |  | $ | 96,108    |        |  | $ | 45,369    |       
|                                             
|                                             
|                                             
|                                             
|Net earnings                                  |                  | $                                                                    | 101,127   |        |  | $    | 103,482   |        |  | $    | 79,371    |        |  | $ | 59,588    |        |  | $ | 27,221    |       
|                                             
|                                             
|                                             
|                                             
|Diluted earnings per share                    |                  | $                                                                    | 1.37      |        |  | $    | 1.29      |        |  | $    | .94       |        |  | $ | .69       |        |  | $ | .32       |       
|                                             
|                                             
|                                             
|                                             
|Consolidated Balance Sheet Data:              |                  |                                                                      |           |        |  |      |           |        |  |      |           |        |  |   |           |        |  |   |           |       
|                                             
|                                             
|                                             
|                                             
|Working capital (deficit)                     |                  | $                                                                    | (93,602   | )      |  | $    | (70,905   | )      |  | $    | (24,289   | )      |  | $ | (69,599   | )      |  | $ | (24,299   | )     
|                                             
|                                             
|                                             
|                                             
|Total assets                                  |                  | $                                                                    | 2,218,530 |        |  | $    | 2,030,158 |        |  | $    | 1,820,943 |        |  | $ | 1,654,482 |        |  | $ | 1,556,096 |       
|                                             
|                                             
|                                             
|                                             
|Long-term obligations, less current portion   |                  | $                                                                    | 364,000   |        |  | $    | 366,787   |        |  | $    | 257,894   |        |  | $ | 183,470   |        |  | $ | 223,486   |       
|                                             
|                                             
|                                             
|                                             
|Stockholders equity                          |                  | $                                                                    | 870,044   |        |  | $    | 738,269   |        |  | $    | 844,615   |        |  | $ | 765,778   |        |  | $ | 735,203   |       
|                                             
|                                             
|                                             
|                                             
|Operating Statistics (at end of
    year):    |                  |                                                                      |           |        |  |      |           |        |  |      |           |        |  |   |           |        |  |   |           |       
|                                             
|                                             
|                                             
|                                             
|Operating ratio                               |                  |                                                                      | 94.1      | %      |  |      | 93.6      | %      |  |      | 94.1      | %      |  |   | 94.4      | %      |  |   | 95.9      | %     
|                                             
|                                             
|                                             
|                                             
|Pre-tax margin(1)                             |                  |                                                                      | 5.2       | %      |  |      | 5.7       | %      |  |      | 5.3       | %      |  |   | 4.6       | %      |  |   | 2.1       | %     
|                                             
|                                             
|                                             
|                                             
|Average line haul revenue per loaded mile(2)  |                  | $                                                                    | 1.58      |        |  | $    | 1.52      |        |  | $    | 1.45      |        |  | $ | 1.41      |        |  | $ | 1.41      |       
|                                             
|                                             
|                                             
|                                             
|Deadhead percentage                           |                  |                                                                      | 12.1      | %      |  |      | 12.8      | %      |  |      | 13.8      | %      |  |   | 14.1      | %      |  |   | 15.1      | %     
|                                             
|                                             
|                                             
|                                             
|Average length of haul (in miles)             |                  |                                                                      | 534       |        |  |      | 520       |        |  |      | 529       |        |  |   | 552       |        |  |   | 571       |       
|                                             
|                                             
|                                             
|                                             
|Total tractors at end of period:              |                  |                                                                      |           |        |  |      |           |        |  |      |           |        |  |   |           |        |  |   |           |       
|                                             
|                                             
|                                             
|                                             
|                                              | Company-operated |                                                                      |           | 14,465 |  |      |           | 14,898 |  |      |           | 14,344 |  |   |           | 12,939 |  |   |           | 12,748 | 
|                                             
|                                             
|                                             
|                                             
|                                              | Owner-operator   |                                                                      |           | 3,466  |  |      |           | 3,647  |  |      |           | 3,692  |  |   |           | 3,152  |  |   |           | 3,048  | 
|                                             
|                                             
|                                             
|                                             
|Trailers at end of period                     |                  |                                                                      | 51,997    |        |  |      | 51,773    |        |  |      | 50,489    |        |  |   | 48,233    |        |  |   | 45,729    |       



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Pre-tax margin represents earnings before income taxes as a
    percentage of operating revenue. Because of the impact that
    equipment financing methods can have on the operating ratio
    (operating expenses as a percentage of operating revenue), we
    believe that the most meaningful comparative measure of our
    operating efficiency is our pre-tax margin, which takes into
    consideration both our total operating expenses and net interest
    expense as a percentage of operating revenue.
|   
|(2) | Excludes fuel surcharge revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

Managements Discussion and Analysis contains statements
that are forward-looking. These statements are based on current
expectations and assumptions that are subject to risks and
uncertainties. Actual results could differ materially because of
factors discussed in Risk Factors and other factors.

16



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##### Table of Contents



OVERVIEW

We are the largest publicly traded truckload carrier in the
United States operating a fleet of 18,000 tractors and 52,000
trailers and traveling nearly 40 million miles every week.
We operate predominantly in one industry, road transportation,
as a truckload motor carrier and thus have only one reportable
segment. We earn revenue by hauling freight for retailers,
manufacturers and other companies. We manage our business
through a network of 33 major terminals located strategically
across the United States and Mexico. We believe our terminal
network provides us with efficiencies such as enabling in-house
maintenance and utilizing company purchased fuel, as well as
providing superior customer service by being located closer to
our customers. Our services include dry van, refrigerated van,
flat-bed, heavy-haul, dedicated and intermodal offerings. The
principal types of freight we transport include retail and
discount department store merchandise, manufactured goods, paper
products, non-perishable and perishable food, beverages and
beverage containers and building materials. Principally, we
operate within short-to-medium-haul traffic lanes with an
average length of haul of less than 550 miles.

In 2005, we restructured our US operations and created three
regions (East, West and Central) each with an operational
executive vice president responsible for all aspects of sales,
planning and network management, and operations within a region.
We believe this operational realignment helped drive
improvements in our operational metrics in 2005. Also in 2005,
we began the expansion of our intermodal service offering. We
expect to continue this expansion in 2006. Our intermodal
operation utilizes railroads to perform transportation services.

In the past few years, the truckload industry has generally
experienced increases in driver wages due to competition among
carriers for qualified drivers, increases in fuel costs due to
less efficient EPA approved engines in the tractors and higher
crude oil prices, and increases in insurance costs. The
availability of drivers and the cost increases have tightened
the capacity growth in the industry while demand from shippers
has increased. This has enabled us and other carriers to pass
through many of our cost increases to the customers through
higher rates. Our ability to continue to pass through these cost
increases and retain qualified drivers could have a major impact
on the results of our operations and financial condition in the
future. Given the current market environment, we will continue
to focus on driver retention, safety, rate negotiations with our
customers, freight selection and other activities that we expect
will enable us to continue our profitable growth.

Sale of Autohaul Business and Assets

In April 2005, we completed the sale of our autohaul assets and
business for approximately $46.1 million, $25 million
of which was paid in cash at closing, $3.5 million of which
was paid on July 15, 2005, $0.6 million of which was
paid on January 15, 2006 and $17 million of which is
payable to us in the form of a note due over a six year period
ending in April 2011. As part of this transaction, we provided
certain bookkeeping and other related services to the buyer on a
transitional basis through December 2005. We will continue to
provide certain information technology support through April
2006. We believe this sale will allow us to focus more on our
core business.

FMCSA Hours of Service Regulations

The FMCSA revised their HOS regulations effective January 2004
to increase the maximum daily drive time from 10 to
11 hours, but no longer allowed for breaks in the on-duty
period. We believe that these changes may have caused
productivity losses as there is wait time while the tractors are
loaded, unloaded or otherwise detained which cannot be recovered
with additional drive time. This also has an impact on our
driver wages since they are paid primarily on the number of trip
miles. In such situations, we have worked with our shippers to
try to minimize the loss of productivity. When necessary, we
have billed our shippers for accessorial charges and in turn
compensated our drivers and owner-operators accordingly so as to
maintain our existing pay structure.

The FMCSA then issued new HOS regulations effective October
2005. In general, the regulations did not reduce the amount of
available driving hours, but restricted the sleeper berth
provision. The new sleeper berth provision allows the
drivers required rest period of 10 hours to be split
into two parts, but requires one

17



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##### Table of Contents





Safety Rating Update

Our safety rating is satisfactory, the highest rating given by
the FMCSA. There are three safety ratings assigned to motor
carriers: satisfactory, conditional,
which means that there are deficiencies requiring correction,
but not so significant to warrant loss of carrier authority and
unsatisfactory, which is the result of acute
deficiencies and would lead to revocation of carrier authority.
In October 2005, the FMCSA completed a review of our operations
and safety management controls. Upon completion of the review
process, the FMCSA assigned to us a safety fitness rating of
satisfactory. The satisfactory safety
fitness rating resolved our litigation with the FMCSA over the
agencys proposed conditional rating in 2003.
Our current litigation with the FMCSA over civil penalties
assessed in connection with audits in 2001 and 2003, in an
aggregate amount of approximately $87,000, is not affected by
the FMCSAs recent satisfactory determination.
We are also in litigation with the FMCSA over civil penalties
assessed in connection with the audit in 2005 in an amount less
than $20,000.

Accounting Standards Not Yet Adopted

The Financial Accounting Standards Board has issued Statements
of Financial Accounting Standard (SFAS) and
Interpretations (FIN) for which the required
implementation dates have not yet become effective. A new
standard that will likely materially impact us is discussed
below.

In December 2004, SFAS No. 123(R), Share-Based
Payment, was issued. This Statement requires all
share-based payments to employees, including grants of employee
stock options, be recognized in the financial statements upon a
grant-date fair value of an award as opposed to the intrinsic
value method of accounting for stock-based employee compensation
under Accounting Principles Board Opinion No. 25, which we
currently use. The standard is effective for the us beginning
January 1, 2006. On September 19, 2005, the
Compensation Committee of our Board of Directors accelerated the
vesting of all outstanding and unvested employee stock options,
and we recorded a $12.4 million non-cash expense. The
vesting period for stock options held by the non-employee
members of the Board of Directors was not accelerated. Also, in
connection with the acceleration of the stock options, the
Compensation Committee of our Board of Directors began to modify
the structure of its compensation program to reduce the number
of stock options awarded in the future, to reduce the number of
employees eligible for awards and to incorporate a restricted
stock element that includes performance standard objectives. We
estimate compensation expense related to SFAS 123(R) will
be less than $500,000 in 2006 without consideration of future
awards.

CRITICAL ACCOUNTING POLICIES

Claims Accruals

We are self-insured for a portion of our liability,
workers compensation, property damage, cargo damage and
employee medical expense risk. This self-insurance results from
buying insurance coverage with deductible amounts. Each
reporting period we accrue the cost of the uninsured portion of
pending claims. These accruals are estimated based on our
evaluation of the nature and severity of individual claims and
an estimate of future claims development based upon historical
claims development trends. Insurance and claims expense will
vary as a percentage of operating revenue from period to period
based on the frequency and severity of claims incurred in a
given period as well as changes in claims development trends.
Actual settlement of the self-insured claim liabilities could
differ from our estimates due to a number of uncertainties,
including evaluation of severity, legal cost and claims that
have been incurred, but not reported. If claims development
factors that are developed based upon historical experience
increased by 10%, our claims accrual as of December 31,
2005 would potentially increase by $67 million.

18



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##### Table of Contents



Goodwill and Intangible Assets

We have $56.2 million of goodwill recorded as of
December 31, 2005. We test the goodwill, which arose from
acquisitions, for impairment annually at our year end. Our test
of goodwill impairment requires judgment, including the
identification of reporting units, assigning assets and
liabilities (including goodwill) to reporting units and
determining the fair value of each reporting unit. We have used
a discounted cash flow model to estimate the fair value of our
reporting units, which includes several significant assumptions,
including estimating future cash flows, determining appropriate
discount rates and other assumptions. Changes in these estimates
and assumptions could materially affect the determination of
fair value and/or goodwill impairment for each reporting unit.
If operating margins decreased by 10% for any of the reporting
units, we would not be required to recognize an impairment.

In addition, we have $38.3 million of intangible assets,
arising from customer relationships obtained through
acquisitions and subsequent contracts, recorded as of
December 31, 2005. We are amortizing these assets over
15 years. Although we do not believe any event or change in
circumstances has occurred that would indicate that the carrying
amount may not be recoverable, we tested these intangible assets
with finite lives to provide the following information.
Significant assumptions, including estimating future cash flows,
determining appropriate discount rates and other assumptions
were used to value these intangible assets. We estimate the
impact of an impairment due to the loss of one contract
termination could range from $2.4 million to
$10.7 million.

Revenue Recognition

Operating revenues and related direct costs are recognized as of
the date the freight is picked up for shipment. Our revenue
recognition policy is consistent with method two under
EITF 91-9. We do not believe the financial results derived
from the application of this method differ materially from the
results that would be derived under method three (revenue
recognized upon delivery) discussed within EITF 91-9 due to
our relatively short length of haul.

19



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##### Table of Contents



RESULTS OF OPERATIONS FOR 2005, 2004 AND 2003

SUMMARY

The following table sets forth for the periods indicated certain
statement of earnings data as a percentage of operating revenue
for the years ended December 31:

|                    |                                            |                          |       |      |      |      |       |      |      |  |       |      |      | 
|------------------- | ------------------------------------------ | ------------------------ | ----- | ---- | ---- | ---- | ----- | ---- | ---- |  | ----- | ---- | ---- | 
|                    |                                            | 2005                     |       | 2004 |      | 2003
|                    |                                            |                          |       |      |      |     
|Operating revenue   |                                            |                          | 100.0 | %    |      |      | 100.0 | %    |      |  | 100.0 | %   
|                   
|                   
|                   
|                   
|Operating expenses: |                                            |                          |       |      |      |      |       |      |      |  |       |     
|                   
|                   
|                   
|                   
|                    | Salaries, wages and employee benefits      |                          |       | 31.5 |      |      |       | 34.4 |      |  |       | 36.4 |     
|                   
|                   
|                   
|                   
|                    | Operating supplies and expenses            |                          |       | 9.0  |      |      |       | 9.7  |      |  |       | 9.7  |     
|                   
|                   
|                   
|                   
|                    | Fuel                                       |                          |       | 19.1 |      |      |       | 15.8 |      |  |       | 13.6 |     
|                   
|                   
|                   
|                   
|                    | Purchased transportation                   |                          |       | 18.2 |      |      |       | 17.7 |      |  |       | 17.4 |     
|                   
|                   
|                   
|                   
|                    | Rental expense                             |                          |       | 1.8  |      |      |       | 2.8  |      |  |       | 3.4  |     
|                   
|                   
|                   
|                   
|                    | Insurance and claims                       |                          |       | 4.9  |      |      |       | 3.4  |      |  |       | 3.9  |     
|                   
|                   
|                   
|                   
|                    | Depreciation, amortization and impairments |                          |       | 6.4  |      |      |       | 6.5  |      |  |       | 6.2  |     
|                   
|                   
|                   
|                   
|                    | (Gain) Loss on equipment disposal          |                          |       |      |      |      |       | .1   |      |  |       | .1   |     
|                   
|                   
|                   
|                   
|                    | Communications and utilities               |                          |       | 1.0  |      |      |       | 1.0  |      |  |       | 1.2  |     
|                   
|                   
|                   
|                   
|                    | Operating taxes and licenses               |                          |       | 2.2  |      |      |       | 2.2  |      |  |       | 2.2  |     
|                    |                                            |                          |       |      |      |      |       |      |      |  |       |     
|                    |                                            | Total operating expenses |       |      | 94.1 |      |       |      | 93.6 |  |       |      | 94.1 | 
|                    |                                            |                          |       |      |      |      |       |      |      |  |       |     
|                    | Operating income                           |                          |       | 5.9  |      |      |       | 6.4  |      |  |       | 5.9  |     
|                   
|                   
|                   
|                   
|                    | Net interest expense                       |                          |       | .8   |      |      |       | .6   |      |  |       | .7   |     
|                   
|                   
|                   
|                   
|                    | Other (income) expense, net                |                          |       | (.1  | )    |      |       | .1   |      |  |       | (.1  | )   
|                    |                                            |                          |       |      |      |      |       |      |      |  |       |     
|                    | Earnings before income taxes               |                          |       | 5.2  |      |      |       | 5.7  |      |  |       | 5.3  |     
|                   
|                   
|                   
|                   
|                    | Income taxes                               |                          |       | 2.0  |      |      |       | 2.0  |      |  |       | 2.0  |     
|                    |                                            |                          |       |      |      |      |       |      |      |  |       |     
|                    | Net earnings                               |                          |       | 3.2  | %    |      |       | 3.7  | %    |  |       | 3.3  | %   
|                    |                                            |                          |       |      |      |      |       |      |      |  |       |     

In 2005, our net earnings decreased slightly from
$103.5 million in 2004 to $101.1 million in 2005.
Trucking revenue increased 6.2% primarily as a result of
increased revenue per mile and improved utilization of our
fleet. These operational improvements helped to offset the
increased cost of insurance as well as pay increases provided to
our drivers and owner-operators. Fuel surcharge revenue
increased $202.2 million to help offset the rising cost of
fuel as shown in our fuel expense and purchased transportation
costs. Also in 2005, we recorded a $12.4 million expense to
accelerate the vesting period of stock options in connection
with accounting rule changes, a $7.7 million expense to
reduce the carrying value of certain trailers and real estate to
the estimated fair value less cost to sell, a $4.4 million
gain from the sale of real estate and a $3.3 million
pre-tax benefit to recognize the decrease in the market value of
interest rate derivative agreements. Our diluted earnings per
share increased in 2005 to $1.37 from $1.29 in 2004 as we
experienced a lower average share count in 2005 due to the large
share repurchases made late in 2004.

In 2004, our net earnings increased to $103.5 million or
30% over 2003. This increase was primarily the result of a 16%
increase in trucking revenue and a $101 million increase in
fuel surcharge revenue which helped us recover increasing fuel
costs. Our results in 2004 include a $3.9 million expense
for the cost of our voluntary early retirement program, a
$2.4 million gain from the sale of real estate, and a
$2.6 million benefit to recognize the decrease in the
market value of interest rate derivatives.

We expect our operations to continue to benefit from our focus
on operational metrics including, increasing revenue per loaded
mile, reducing deadhead, and increasing utilization (measured as
weekly loaded truck miles), resulting in higher revenue per
tractor per week.

20



---



##### Table of Contents



REVENUE

We segregate our revenue into three types: trucking revenue,
other revenue, and fuel surcharge revenue. A summary of our
revenue generated by type for the past three years is as follows:

|                        |  |               |           |      |  |      |           |  |  |   |           | 
|----------------------- |  | ------------- | --------- | ---- |  | ---- | --------- |  |  | - | --------- | 
|                        |  | 2005          |           | 2004 |  | 2003
|                        |  |               |           |      |  |     
|                        |  |              
|                        |  | ($ thousands)
|                       
|                       
|                       
|                       
|Trucking revenue        |  | $             | 2,722,648 |      |  | $    | 2,564,712 |  |  | $ | 2,207,928 | 
|                       
|                       
|                       
|                       
|Fuel surcharge revenue  |  |               | 391,942   |      |  |      | 189,725   |  |  |   | 88,865    | 
|                       
|                       
|                       
|                       
|Other revenue           |  |               | 82,865    |      |  |      | 71,764    |  |  |   | 100,862   | 
|                        |  |               |           |      |  |      |           |  |  |   |           | 
|Total operating revenue |  | $             | 3,197,455 |      |  | $    | 2,826,201 |  |  | $ | 2,397,655 | 
|                        |  |               |           |      |  |      |           |  |  |   |           | 

Trucking Revenue

Trucking revenue is revenue from freight hauled by our fleet and
accounts for the majority of our total revenue. Generally, our
customers pay for our services based on the number of miles
between pick-up and delivery and other ancillary services we
provide. To improve our trucking revenue we can either increase
the number of revenue generating miles our trucks are driven or
increase the rate at which we are paid. We use three primary
indicators, based upon tractors available for dispatch, to
monitor our performance. First, we monitor utilization of our
tractors in the form of miles per tractor per week. In
conjunction with miles per tractor per week, we measure the
percentage of miles our tractors travel that do not generate
revenue, known as deadhead. Our goal is to minimize the amount
of deadhead driven to allow for more revenue generating miles.
We monitor deadhead miles on a daily basis. Finally, to analyze
the rates our customers pay, we measure revenue per loaded mile
on a daily basis. Loaded miles include only the miles driven
when hauling freight. To improve revenue per mile we evaluate
the lanes in which we operate to ensure we are adequately
compensated and negotiate higher rates per mile with our
customers where appropriate. These indicators for the past three
years are as follows:

|                                                             |  |      |        |      |  |      |        |   |  |   |        |  
|------------------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                             |  | 2005 |        | 2004 |  | 2003
|                                                             |  |      |        |      |  |     
|Total miles per tractor per week                             |  |      | 2,169  |      |  |      | 2,142  |   |  |   | 2,123  |  
|                                                            
|                                                            
|                                                            
|                                                            
|Loaded miles per tractor per week                            |  |      | 1,907  |      |  |      | 1,867  |   |  |   | 1,831  |  
|                                                            
|                                                            
|                                                            
|                                                            
|Deadhead percentage                                          |  |      | 12.1   | %    |  |      | 12.8   | % |  |   | 13.8   | %
|                                                            
|                                                            
|                                                            
|                                                            
|Revenue per loaded mile excluding fuel surcharge
    revenue |  | $    | 1.5794 |      |  | $    | 1.5235 |   |  | $ | 1.4524 |  

In addition to the rate per mile, we are also compensated, in
some instances, for accessorial charges such as detention and
loading and unloading freight for our customers. These
accessorial charges are also included in trucking revenue.

In 2005, trucking revenue increased $157.9 million or 6.2%
compared to 2004. The increase in our revenue per loaded mile
generated $96.5 million or 61% of the growth. Utilization
improvements that enabled us to run more loaded miles with
existing tractors contributed $54.6 million or 35% of the
growth in trucking revenue. The remaining increase was primarily
the result of a slightly larger fleet in 2005 of 17,383 average
tractors available for dispatch compared to 17,337 in 2004.

Trucking revenue grew $356.8 million or approximately 16%
in 2004 compared to 2003. Increases in our revenue per mile
accounted for $120 million or 34% of the growth.
Improvements in utilization contributed 13% or $48 million
to growth. The acquisition of Merit Distribution Services, Inc.
in July of 2003 accounted for approximately 3% of growth, while
the acquisition of Trans-Mex in January of 2004 contributed an
additional 1% of growth. The remaining increase was due to
volume.

Fuel Surcharge Revenue

Fuel surcharge revenue is generated based on increases in fuel
costs billed to our customers. Although our surcharge programs
vary by customer, prior to October 2004 we received
approximately an additional penny per mile for every six cent
increase in the Department of Energys average diesel fuel
index. Throughout the

21



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##### Table of Contents





Fuel surcharge revenue increased 107% in 2005 in addition to
113% growth in 2004 compared to 2003. The Department of Energy
diesel fuel index increased to an average of $2.40 in 2005 from
$1.81 in 2004 and $1.51 in 2003. The increase in the average
cost of fuel, as well as our increase in volume and our fuel
surcharge program, directly contributed to the growth in fuel
surcharge revenue.

Other Revenue

Other revenue is generated primarily by freight moved for our
customers on rail or other purchased transportation. In 2005, we
entered into an agreement with BNSF Railway to assume the leases
for certain 53 foot intermodal containers. We began
receiving these containers in the third quarter of 2005 and by
December 31, 2005 had received approximately 800
containers. We also purchased an additional 1,500 containers.
These containers will be used to serve customers that transport
shipments over the rail network and use a truck to transport the
container to and from the rail depots. We expect we will have
approximately 5,300 containers by the end of 2006. Other revenue
increased $11.1 million in 2005 as compared to 2004. The
increase was driven by revenue generated with the new intermodal
containers partially offset by a decrease in other third party
trucking revenue.

Prior to 2004, the revenue generated when subcontracting with
Trans-Mex, Inc. was included in other revenue. In January 2004,
we acquired 100% of Trans-Mex and have fully consolidated its
financial results in 2004 and 2005. Other revenue decreased in
2004 because Trans-Mex revenue was reclassified to trucking
revenue. Trans-Mex accounted for $21.6 million of other
revenue in 2003. The remaining decline in other revenue in 2004
compared to 2003 was a reduction in the revenue received from
freight moved by rail.

Major Customers

Sales to Wal-Mart, our largest customer, generated approximately
15% of our total revenue in 2005 and 2004 and 12% of operating
revenue in 2003. No other customer accounted for 10% or more of
our operating revenue in any reporting period.

Revenue and Expense Comparisons

When analyzing our expenses for growth related to volume, we
believe using total revenue excluding fuel surcharge revenue is
a more applicable measure for all costs with the exception of
fuel expense. Fuel surcharge revenue is primarily a function of
the increases and/or decreases in the cost of fuel and not
specifically related to our non-fuel operational expenses. In
addition, fuel surcharge revenue increased 107% and 113% in 2005
and 2004, respectively, as a result of the significant increases
in fuel costs. Our trucking and other revenue combined increased
6% and 14%, respectively, in 2005 and 2004. For these reasons,
we analyze our expenses below using revenue excluding fuel
surcharge, calculated as follows:

|                                         |  |               |           |      |  |      |           |   |  |   |           |  
|---------------------------------------- |  | ------------- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | -
|                                         |  | 2005          |           | 2004 |  | 2003
|                                         |  |               |           |      |  |     
|                                         |  |              
|                                         |  | ($ thousands)
|                                        
|                                        
|                                        
|                                        
|Total revenue                            |  | $             | 3,197,455 |      |  | $    | 2,826,201 |   |  | $ | 2,397,655 |  
|                                        
|                                        
|                                        
|                                        
|Less: Fuel surcharge revenue             |  |               | (391,942  | )    |  |      | (189,725  | ) |  |   | (88,865   | )
|                                         |  |               |           |      |  |      |           |   |  |   |           |  
|Revenue excluding fuel surcharge revenue |  | $             | 2,805,513 |      |  | $    | 2,636,476 |   |  | $ | 2,308,790 |  
|                                         |  |               |           |      |  |      |           |   |  |   |           |  

22



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##### Table of Contents



OPERATING EXPENSES

Salaries, Wages and Employee Benefits

|                                      |                                                   |               |           |      |   |      |         |      |   |   |         |      |  
|------------------------------------- | ------------------------------------------------- | ------------- | --------- | ---- | - | ---- | ------- | ---- | - | - | ------- | ---- | -
|                                      |                                                   | 2005          |           | 2004 |   | 2003
|                                      |                                                   |               |           |      |   |     
|                                      |                                                   |              
|                                      |                                                   | ($ thousands)
|                                     
|                                     
|                                     
|                                     
|Salaries, wages and employee benefits |                                                   |               | 1,008,833 |      |   | $    | 971,683 |      |   | $ | 872,453 |     
|                                     
|                                     
|                                     
|                                     
|                                      | % of total revenue                                |               |           | 31.5 | % |      |         | 34.4 | % |   |         | 36.4 | %
|                                     
|                                     
|                                     
|                                     
|                                      | % of revenue excluding fuel surcharge
    revenue |               |           | 36.0 | % |      |         | 36.9 | % |   |         | 37.8 | %

Salaries, wages and employee benefits increased
$37.2 million in 2005 compared to 2004. Included in
salaries, wages and employee benefits is a $12.4 million
charge associated with the acceleration of the vesting of
7.3 million stock options that was recorded in the third
quarter of 2005 and a $3.9 million expense recorded in the
first quarter of 2004 associated with a voluntary early
retirement plan. Excluding these charges from the respective
years, salaries, wages and employee benefits was
$996.4 million in 2005 or 35.5% of revenue excluding fuel
surcharge revenue compared to $967.8 million in 2004 or
36.7% of revenue excluding fuel surcharge revenue.

Total driver compensation was relatively flat on a per mile
basis between 2004 and 2005 as increases in driver pay per mile
were offset primarily by a decrease in workers compensation
costs. Driver wages and benefits expense increased between 2005
and 2004 as our company miles increased, but decreased as a
percent of revenue excluding fuel surcharge revenue as increases
in revenue per mile exceeded increases in driver costs.

Total driver compensation increased 2.6 cents per mile in 2004
compared to 2003 as a result of the pay increases made to
drivers and increased costs related to fringe benefits. This
increase includes a slight reduction in pay per mile resulting
from the driver per diem program implemented in September 2004
and the consolidation of Trans-Mex. The per diem program
consists of a decrease in the drivers pay per mile offset by a
non-taxable per diem payment for reimbursement of meals and
expenses while on the road. Total driver compensation decreased
0.4% as a percent of revenue excluding fuel surcharge revenue
year over year despite the increase in pay per mile. This is a
function of our revenue per mile increasing more than our driver
pay increases and our owner-operators driving proportionately
more miles in 2004.

Non-driver salaries, wages and employee benefits increased
approximately $21 million between 2004 and 2005 excluding
the charges described above. This increase was the result of
non-driver merit pay increases and staffing increases primarily
in safety, recruiting and terminal/customer operations. Our
non-driver salaries, wages and benefits increased approximately
$17 million from 2003 to 2004 but decreased 0.5% as a
percent of revenue excluding fuel surcharge. Our average number
of non-driver employees remained relatively flat from 2003 to
2004, but increases in pay and a $3.9 million expense for
early retirement caused non-driver salaries, wages and benefits
to increase.

In 2003, our deductible amount for workers compensation
rose from $350,000 to $500,000 per incident and in 2004
rose to $3,000,000. We believe that the decrease in the cost of
our premiums based on a $3,000,000 deductible will more than
offset the cost of claims that occur within the $500,000 to
$3,000,000 range, which historically have been a small number.

From time to time the industry has experienced shortages of
qualified drivers. If such a shortage were to occur over a
prolonged period and increases in driver pay rates were to occur
in order to attract and retain drivers, our results of
operations would be negatively impacted to the extent we did not
obtain corresponding rate increases.

23



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##### Table of Contents



Operating Supplies and Expenses

|                                |                                                   |               |         |      |   |      |         |      |   |   |         |      |  
|------------------------------- | ------------------------------------------------- | ------------- | ------- | ---- | - | ---- | ------- | ---- | - | - | ------- | ---- | -
|                                |                                                   | 2005          |         | 2004 |   | 2003
|                                |                                                   |               |         |      |   |     
|                                |                                                   |              
|                                |                                                   | ($ thousands)
|                               
|                               
|                               
|                               
|Operating supplies and expenses |                                                   | $             | 286,261 |      |   | $    | 274,088 |      |   | $ | 233,148 |     
|                               
|                               
|                               
|                               
|                                | % of total revenue                                |               |         | 9.0  | % |      |         | 9.7  | % |   |         | 9.7  | %
|                               
|                               
|                               
|                               
|                                | % of revenue excluding fuel surcharge
    revenue |               |         | 10.2 | % |      |         | 10.4 | % |   |         | 10.1 | %

Operating supplies and expenses increased $12.2 million or
from 10.4% of revenue excluding fuel surcharge revenue to 10.2%
between 2004 and 2005. In 2004, we completed the amortization of
$21.1 million of legal fees related to a legal settlement
discussed in the Insurance and Claims section below. These fees
were amortized over 30 months on a straight-line basis
between July 2002 and December 2004. Therefore,
$8.4 million was expensed in 2004. Excluding this expense,
operating supplies and expenses increased $20.6 million
between 2004 and 2005 driven by higher maintenance and
recruiting expenses. The increase in recruiting expenses is
associated with the expansion of our driver academies and a 64%
increase in the number of graduates from our academies. The
increased maintenance expense is related to an increase in the
equipment services we provide for owner-operators and other
third parties for which we receive revenue, as well as increases
to trailer maintenance.

Operating supplies and expenses in 2004 increased
$40.9 million compared to 2003. Approximately
$5.9 million of the increase is due to the consolidation of
Trans-Mex. Other variances include a slight increase in
maintenance, increased travel, additional legal costs and
additional expenses related to Sarbanes-Oxley compliance.

Fuel Expense

|                             |                    |               |         |      |   |      |         |      |   |   |         |      |  
|---------------------------- | ------------------ | ------------- | ------- | ---- | - | ---- | ------- | ---- | - | - | ------- | ---- | -
|                             |                    | 2005          |         | 2004 |   | 2003
|                             |                    |               |         |      |   |     
|                             |                    |              
|                             |                    | ($ thousands)
|                            
|                            
|                            
|                            
|Fuel expense                 |                    | $             | 610,919 |      |   | $    | 446,752 |      |   | $ | 326,749 |     
|                            
|                            
|                            
|                            
|                             | % of total revenue |               |         | 19.1 | % |      |         | 15.8 | % |   |         | 13.6 | %
|                            
|                            
|                            
|                            
|Company fuel cost per gallon |                    | $             | 2.25    |      |   | $    | 1.70    |      |   | $ | 1.39    |     

Fuel expense in 2005 increased to 19.1% of total revenue in 2005
compared to 15.8% in 2004. Of the $164.2 million increase,
87% was the result of the 32% increase in fuel cost per gallon.
The remaining increase resulted from higher mileage and reduced
fuel efficiency.

Fuel costs in 2004 increased $120.0 million or 36.7%
compared to 2003. The majority of the increase is the result of
our average fuel cost per gallon increasing over 22% year over
year. Approximately 7% of the increase is due to the additional
miles associated with our revenue increase and the remaining
increase is due to a reduction in fuel efficiency resulting from
a larger portion of our engines conforming to the new engines
mandated by the U.S. Environmental Protection Agency that
became effective October 1, 2002, and the higher driving
speeds adopted in July of 2004.

Increases in fuel costs, to the extent not offset by rate
increases or fuel surcharges, would have an adverse effect on
our operations and profitability. We believe that the most
effective protection against fuel cost increases is to maintain
a fuel-efficient fleet and to implement fuel surcharges when
such an option is necessary and available. We do not use
derivative-type hedging products, but periodically evaluate
their possible use.

To measure the effectiveness of our fuel surcharge program, we
subtract fuel surcharge revenue received for company miles
driven (as opposed to miles driven by our owner-operators who
pay for their own fuel) from

24



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##### Table of Contents





|                                                               |                                                   |               |         |      |   |      |         |      |   |   |         |      |  
|-------------------------------------------------------------- | ------------------------------------------------- | ------------- | ------- | ---- | - | ---- | ------- | ---- | - | - | ------- | ---- | -
|                                                               |                                                   | 2005          |         | 2004 |   | 2003
|                                                               |                                                   |               |         |      |   |     
|                                                               |                                                   |              
|                                                               |                                                   | ($ thousands)
|                                                              
|                                                              
|                                                              
|                                                              
|Total fuel surcharge revenue                                   |                                                   | $             | 391,942 |      |   | $    | 189,725 |      |   | $ | 88,865  |     
|                                                              
|                                                              
|                                                              
|                                                              
|Less: Fuel surcharge revenue reimbursed to
    owner-operators |                                                   |               | 84,907  |      |   |      | 39,514  |      |   |   | 18,225  |     
|                                                               |                                                   |               |         |      |   |      |         |      |   |   |         |     
|Company fuel surcharge revenue                                 |                                                   | $             | 307,035 |      |   | $    | 150,211 |      |   | $ | 70,640  |     
|                                                               |                                                   |               |         |      |   |      |         |      |   |   |         |     
|Total fuel expense                                             |                                                   | $             | 610,919 |      |   | $    | 446,752 |      |   | $ | 326,749 |     
|                                                              
|                                                              
|                                                              
|                                                              
|Less: Company fuel surcharge revenue                           |                                                   |               | 307,035 |      |   |      | 150,211 |      |   |   | 70,640  |     
|                                                               |                                                   |               |         |      |   |      |         |      |   |   |         |     
|Net fuel expense                                               |                                                   | $             | 303,884 |      |   | $    | 296,541 |      |   | $ | 256,109 |     
|                                                               |                                                   |               |         |      |   |      |         |      |   |   |         |     
|                                                               | % of revenue excluding fuel surcharge
    revenue |               |         | 10.8 | % |      |         | 11.2 | % |   |         | 11.1 | %

Our net fuel expense has remained relatively flat as a percent
of revenue excluding fuel surcharge for the past three years.
This indicates that our fuel surcharge program has effectively
offset the impact of rising diesel fuel costs, and our net fuel
expense increases are the result of volume. The 40 basis
point decline between 2005 and 2004 was the result of the
leverage associated with increases in our base revenue per
loaded mile.

Purchased Transportation

|                                                                    |                                                   |               |         |      |   |      |         |      |   |   |         |      |  
|------------------------------------------------------------------- | ------------------------------------------------- | ------------- | ------- | ---- | - | ---- | ------- | ---- | - | - | ------- | ---- | -
|                                                                    |                                                   | 2005          |         | 2004 |   | 2003
|                                                                    |                                                   |               |         |      |   |     
|                                                                    |                                                   |              
|                                                                    |                                                   | ($ thousands)
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Total purchased transportation                                      |                                                   | $             | 583,380 |      |   | $    | 499,790 |      |   | $ | 417,182 |     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | % of total revenue                                |               |         | 18.2 | % |      |         | 17.7 | % |   |         | 17.4 | %
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Less: Fuel surcharge revenue reimbursed to
    owner-operators      |                                                   |               | 84,907  |      |   |      | 39,514  |      |   |   | 18,225  |     
|                                                                    |                                                   |               |         |      |   |      |         |      |   |   |         |     
|Purchased transportation excluding fuel surcharge
    reimbursement |                                                   |               | 498,473 |      |   | $    | 460,276 |      |   | $ | 398,957 |     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | % of revenue excluding fuel surcharge
    revenue |               |         | 17.8 | % |      |         | 17.5 | % |   |         | 17.3 | %

Purchased transportation increased $83.6 million from 2004
to 2005, of which $45.4 million was the increase in the
reimbursement made to owner-operators for fuel surcharges.
Excluding this reimbursement, purchased transportation increased
30 basis points from 2004 to 2005 to 17.8% of revenue
excluding fuel surcharge revenue. The increase in purchase
transportation dollars as well as the percent to revenue
excluding fuel surcharge revenue is primarily a result of the
increase in rail costs due to the expansion of our intermodal
container business, an increase in the miles driven by
owner-operators as well as an increase in owner-operator pay per
mile. These increases were partially offset by a reduction in
other third party expenses.

Purchased transportation increased $82.6 million in 2004
compared to 2003 of which $21.3 million was the increase in
fuel surcharge revenue reimbursed to our owner-operators.
Excluding fuel surcharge, purchased transportation increased
0.2% year over year as a percent of revenue excluding fuel
surcharge revenue. In 2003 and prior, the cost of using
Trans-Mex was included in purchased transportation. After
completing the acquisition of Trans-Mex in January 2004, we
began consolidating their financial statements, and their costs
now are shown on each individual line item on the Consolidated
Statement of Earnings. Therefore, the purchased transportation
line has been reduced by these Trans-Mex costs. This accounts
for approximately a one percentage point reduction. This
reduction was offset by an increase in owner-operator costs. Our
owner-operators drove approximately 17% more miles for us in
2004 compared to 2003. In addition, they have received rate per
mile increases, hours of service rate increases, and other
incentive pay in order for us to attract and retain
owner-operators.

25



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##### Table of Contents



Insurance and Claims

|                     |                                                   |               |         |      |   |      |        |     |   |   |        |     |  
|-------------------- | ------------------------------------------------- | ------------- | ------- | ---- | - | ---- | ------ | --- | - | - | ------ | --- | -
|                     |                                                   | 2005          |         | 2004 |   | 2003
|                     |                                                   |               |         |      |   |     
|                     |                                                   |              
|                     |                                                   | ($ thousands)
|                    
|                    
|                    
|                    
|Insurance and claims |                                                   | $             | 156,525 |      |   | $    | 94,850 |     |   | $ | 94,685 |    
|                    
|                    
|                    
|                    
|                     | % of total revenue                                |               |         | 4.9  | % |      |        | 3.4 | % |   |        | 3.9 | %
|                    
|                    
|                    
|                    
|                     | % of revenue excluding fuel surcharge
    revenue |               |         | 5.6  | % |      |        | 3.6 | % |   |        | 4.1 | %

Insurance and claims expense increased $61.7 million in
2005 as compared to 2004. This increase is primarily related to
the fact that we did not incur certain insurance premium expense
in 2004, the increase in our self insurance deductible in 2005,
and the development of prior year claims. Our reserve policy and
accrual methodology have not changed year over year.

As we discussed in the notes to our financial statements, we
entered into a settlement agreement with an insurance company in
2002. Pursuant to this settlement, the insurance company agreed
to provide certain insurance coverage, at no cost to us through
December 2004, in exchange for our releasing all claims that
were the subject of the litigation. We recognized this
settlement amount as a reduction of insurance expense as the
insurance coverage was provided during the period from
July 1, 2002 through December 31, 2004. In addition,
we deferred the $21.1 million of legal expenses, which were
paid pursuant to a contingent fee arrangement based upon our
estimate of the value of the insurance provided of between
$65 million and $74 million. These legal expenses were
contingent upon our ability to receive the insurance coverage
outlined in the settlement due to the liquidation,
rehabilitation, bankruptcy or other similar insolvency of the
insurers and, therefore, were amortized on a straight-line basis
over the thirty-month period from July 1, 2002 through
December 31, 2004.

As discussed under Critical Accounting Policies, we are
self-insured for some portion of our liability, property damage
and cargo damage risk. We buy insurance coverage with deductible
amounts. Beginning in 2003, the deductible amount for general
liability rose from $250,000 to $1,000,000 per incident. In
December 2004, we entered into an agreement with insurance
carriers to provide transportation liability insurance with an
aggregate limit of $200 million for 2005 and 2006. The new
policy increased the self-insured portion to $10 million
per occurrence and was extended through the end of 2006. After
reviewing actuarial studies of our loss history, frequency and
severity, we determined this to be the optimal insurance
solution for us at this time. This expense will vary as a
percentage of operating revenue from period to period based on
the frequency and severity of claims incurred in a given period
as well as changes in claims development trends.

Insurance and claims in 2004 was 3.6% of revenue excluding fuel
surcharge compared to 4.1% in 2003. The reduction in 2004 was
due to a reduction in development on prior year claims.

Rental Expense, Depreciation, Amortization and Impairments

|                                                                   |                                                   |               |         |      |   |      |         |      |   |   |         |      |  
|------------------------------------------------------------------ | ------------------------------------------------- | ------------- | ------- | ---- | - | ---- | ------- | ---- | - | - | ------- | ---- | -
|                                                                   |                                                   | 2005          |         | 2004 |   | 2003
|                                                                   |                                                   |               |         |      |   |     
|                                                                   |                                                   |              
|                                                                   |                                                   | ($ thousands)
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Rental expense                                                     |                                                   | $             | 57,669  |      |   | $    | 78,054  |      |   | $ | 82,158  |     
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | % of total revenue                                |               |         | 1.8  | % |      |         | 2.8  | % |   |         | 3.4  | %
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | % of revenue excluding fuel surcharge
    revenue |               |         | 2.1  | % |      |         | 3.0  | % |   |         | 3.5  | %
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Depreciation, amortization and impairments                         |                                                   |               | 206,154 |      |   |      | 184,608 |      |   |   | 149,138 |     
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | % of total revenue                                |               |         | 6.4  | % |      |         | 6.5  | % |   |         | 6.2  | %
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | % of revenue excluding fuel surcharge
    revenue |               |         | 7.3  | % |      |         | 7.0  | % |   |         | 6.5  | %
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Total rental, depreciation amortization and
    impairment expense |                                                   |               | 263,823 |      |   |      | 262,662 |      |   |   | 231,296 |     
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | % of total revenue                                |               |         | 8.2  | % |      |         | 9.3  | % |   |         | 9.6  | %
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | % of revenue excluding fuel surcharge
    revenue |               |         | 9.4  | % |      |         | 10.0 | % |   |         | 10.0 | %

26



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##### Table of Contents



Rental expense and depreciation expense are primarily driven by
our fleet of tractors and trailers shown below:

|                                         |                         |                        |        |        |        |      |        |        |        |  |        |        |        | 
|---------------------------------------- | ----------------------- | ---------------------- | ------ | ------ | ------ | ---- | ------ | ------ | ------ |  | ------ | ------ | ------ | 
|                                         |                         | 2005                   |        | 2004   |        | 2003
|                                         |                         |                        |        |        |        |     
|                                         |                         |                       
|                                         |                         | ($ thousands)         
|                                        
|                                        
|                                        
|                                        
|Tractors:                                |                         |                        |        |        |        |      |        |        |        |  |        |       
|                                         | Company                 |                        |        |        |        |      |        |        |        |  |        |        |       
|                                        
|                                        
|                                        
|                                        
|                                         |                         | Owned                  |        |        | 11,882 |      |        |        | 11,046 |  |        |        | 9,339  | 
|                                        
|                                        
|                                        
|                                        
|                                         |                         | Leased                 |        |        | 2,583  |      |        |        | 3,852  |  |        |        | 5,005  | 
|                                         |                         |                        |        |        |        |      |        |        |        |  |        |       
|                                         |                         | Total company tractors |        |        | 14,465 |      |        |        | 14,898 |  |        |        | 14,344 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Owner-operator tractors |                        |        | 3,466  |        |      |        | 3,647  |        |  |        | 3,692  |       
|                                         |                         |                        |        |        |        |      |        |        |        |  |        |       
|                                         | *Total tractors         |                        |        | 17,931 |        |      |        | 18,545 |        |  |        | 18,036 |       
|                                         |                         |                        |        |        |        |      |        |        |        |  |        |       
|*Average tractors available for dispatch |                         |                        | 17,383 |        |        |      | 17,337 |        |        |  | 15,969 |       
|                                         |                         |                        |        |        |        |      |        |        |        |  |        |       
|Trailers                                 |                         |                        | 51,997 |        |        |      | 51,773 |        |        |  | 50,489 |       
|                                         |                         |                        |        |        |        |      |        |        |        |  |        |       



---



|  |                                                                                                                                                                                                                                                                                               
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Total tractors owned and leased include tractors being prepared
    for service and tractors waiting to be returned under lease or
    resold at the end of our replacement program. Average tractors
    is calculated on a monthly basis and represents tractors
    available for dispatch.

Over the past three years, we have been purchasing the majority
of our tractors and trailers rather than leasing. This has
caused our rental expense to decrease and our depreciation
expense to increase. As a percentage of revenue excluding fuel
surcharge, total rental, depreciation, amortization and
impairment expense decreased to 9.4% in 2005 compared to 10.0%
in both 2004 and 2003.

In 2005, rental expense decreased $20.4 million as the
number of leased tractors declined from 3,852 in 2004 to 2,583
in 2005. Depreciation, amortization and impairment expense
increased $21.5 million in 2005 compared to 2004. Included
in this expense in 2005 is a $6.4 million impairment charge
to reduce the carrying value of some specialized trailers to
their fair market value less costs to sell. The charge was
recorded in the third quarter of 2005 when the trailers were
reclassified to assets held for sale. This charge and the
836 increase in the number of owned tractors resulted in
the increased depreciation expense year over year.

Rental expense decreased in 2004 compared to 2003 as the number
of tractors on lease declined from 5,005 as of December 31,
2003 to 3,852 as of December 31, 2004. This reduction in
tractor lease cost was partially offset by an increase in
short-term trailer rent expense. Depreciation, amortization and
impairment expense increased in 2004 as compared to 2003, as the
number of tractors owned increased from 9,339 as of
December 31, 2003 to 11,046 at December 31, 2004.
Depreciation expense in 2004 did include an impairment charge of
$4 million to adjust autohaul assets held for sale to
estimated fair value less costs to sell.

As previously disclosed, in 2003 and 2004 we amended our
replacement cycle for our tractors from three years to five
years. To implement these changes, the remaining net book value
of the affected tractors at the time of change is being
depreciated on a straight-line basis over the remaining adjusted
economic life to the revised residual value. The benefit
(expense) of changing the tractors lives that were
owned as of October 1, 2002 is shown below:

|                                    |  |                                 |        |      |  |      |        |   |  |   |       | 
|----------------------------------- |  | ------------------------------- | ------ | ---- |  | ---- | ------ | - |  | - | ----- | 
|                                    |  | 2005                            |        | 2004 |  | 2003
|                                    |  |                                 |        |      |  |     
|                                    |  |                                
|                                    |  | ($ thousands except share data)
|                                   
|                                   
|                                   
|                                   
|Earnings (loss) before income taxes |  | $                               | (3,997 | )    |  | $    | (1,915 | ) |  | $ | 6,402 | 
|                                   
|                                   
|                                   
|                                   
|Net earnings (loss)                 |  | $                               | (2,438 | )    |  | $    | (1,245 | ) |  | $ | 3,971 | 
|                                   
|                                   
|                                   
|                                   
|Diluted earnings (loss) per share   |  | $                               | (0.03  | )    |  | $    | (0.02  | ) |  | $ | 0.05  | 

27



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##### Table of Contents



(Gain) Loss on Equipment Disposal

We occasionally purchase and then resell tractors that we
currently lease by exercising the purchase option contained in
the lease. We also generate gains and/or losses from the sale of
tractors we own. These gains and losses are recorded as a
separate line item on the Consolidated Statements of Earnings
and are summarized below.

|                                       |  |               |        |      |  |      |       |   |  |   |       | 
|-------------------------------------- |  | ------------- | ------ | ---- |  | ---- | ----- | - |  | - | ----- | 
|                                       |  | 2005          |        | 2004 |  | 2003
|                                       |  |               |        |      |  |     
|                                       |  |              
|                                       |  | ($ thousands)
|                                      
|                                      
|                                      
|                                      
|Loss on sale of leased equipment       |  | $             | 811    |      |  | $    | 3,378 |   |  | $ | 247   | 
|                                      
|                                      
|                                      
|                                      
|(Gain) loss on sale of owned equipment |  |               | (1,753 | )    |  |      | (801  | ) |  |   | 1,464 | 
|                                       |  |               |        |      |  |      |       |   |  |   |       | 
|Net (gain) loss on equipment disposal  |  | $             | (942   | )    |  | $    | 2,577 |   |  | $ | 1,711 | 
|                                       |  |               |        |      |  |      |       |   |  |   |       | 

OTHER EXPENSES

Interest Expense

Our largest pre-tax non-operating expense is interest. Our debt
balance combining the operating line of credit, accounts
receivable securitization, capital leases, Senior Notes and
other debt was $611 million, $622 million and
$419 million at December 31, 2005, 2004 and 2003,
respectively.

|                                               |  |               |        |      |  |      |        |  |  |   |        | 
|---------------------------------------------- |  | ------------- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                               |  | 2005          |        | 2004 |  | 2003
|                                               |  |               |        |      |  |     
|                                               |  |              
|                                               |  | ($ thousands)
|                                              
|                                              
|                                              
|                                              
|Interest expense                               |  | $             | 26,632 |      |  | $    | 18,931 |  |  | $ | 16,202 | 
|                                              
|                                              
|                                              
|                                              
|Decrease in derivative agreements              |  |               | 3,314  |      |  |      | 2,631  |  |  |   | 2,084  | 
|                                               |  |               |        |      |  |      |        |  |  |   |        | 
|Interest expense, net of derivative agreements |  | $             | 29,946 |      |  | $    | 21,562 |  |  | $ | 18,286 | 
|                                               |  |               |        |      |  |      |        |  |  |   |        | 

Interest expense, net of the impact of the derivative agreements
shown above, increased $8.4 million in 2005 compared to
2004. This increase is due to the higher average debt balance we
experienced throughout the year as well as rising base interest
rates on our variable debt.

Our interest expense, net of the impact of the derivative
agreements, increased in 2004. Our average debt balance
increased during 2004 as we repurchased 14,132,249 shares
of our common stock for a total cost of $253 million, paid
$10.8 million in cash for part of the purchase price of
Trans-Mex, and expended $324 million on net capital
expenditures compared to $223 million in 2003. In addition,
in June 2003, we completed the private placement of Senior Notes
with a weighted average interest rate of 4% which was higher
than the variable rate debt in 2003.

Other (Income) Expense

Other (income) expense in 2005 includes a $4.4 million gain
on the sale of real estate, a $2.8 million impairment
charge to reduce the carrying value of certain real estate and
other assets to the estimated fair value less costs to sell, and
a $3.7 million loss associated with the equity losses of
Transplace. In 2004, other (income) expense includes a gain of
$2.4 million on the sale of real estate, a
$4.3 million loss to adjust the carrying value of four
properties and a note receivable to the current estimate of the
net realizable value, and a $2.9 million loss for our
equity portion of Transplaces reported losses. The equity
earnings of Trans-Mex, a company we acquired 100% of in January
2004, are included in other (income) expense in 2003.

Income Taxes

Our effective tax rate was 38.5%, 35.3% and 38.0% in 2005, 2004
and 2003, respectively. In 2004, we benefited from a lower state
tax rate resulting from the completion and filing of our
2003 state tax returns,

28



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##### Table of Contents





LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

Our cash flow sources and uses by operating, investing and
financing activities are shown below:

|                                                        |  |               |          |      |  |      |          |   |  |   |          |  
|------------------------------------------------------- |  | ------------- | -------- | ---- |  | ---- | -------- | - |  | - | -------- | -
|                                                        |  | 2005          |          | 2004 |  | 2003
|                                                        |  |               |          |      |  |     
|                                                        |  |              
|                                                        |  | ($ thousands)
|                                                       
|                                                       
|                                                       
|                                                       
|Net cash provided by operating activities               |  | $             | 362,548  |      |  | $    | 364,546  |   |  | $ | 287,889  |  
|                                                       
|                                                       
|                                                       
|                                                       
|Net cash used in investing activities                   |  | $             | (380,007 | )    |  | $    | (318,806 | ) |  | $ | (287,969 | )
|                                                       
|                                                       
|                                                       
|                                                       
|Net cash provided by (used in) financing
    activities |  | $             | 2,525    |      |  | $    | (36,566  | ) |  | $ | 11,205   |  

Net cash provided by operating activities was down
$2.0 million in 2005 compared to 2004. Pre-tax operating
income adjusted for non-cash items such as depreciation,
amortization and impairment charges increased approximately
$28 million in 2005 compared to the prior year. Income tax
and interest payments increased $65.0 million and
$7.8 million, respectively, between 2004 and 2005. The
increase in tax payments was primarily related to the expiration
of bonus depreciation for revenue equipment on December 31,
2004. Our accounts receivable balance increased less between
2004 and 2005 compared to the increase between 2003 and 2004, as
our cash collection process improved and our day sales
outstanding declined from 41 in 2004 to 38 in 2005. Excluding
the impact of the income tax receivable, our accounts receivable
balance increased $21.6 million in 2005 compared to a
$42.1 million increase between 2003 and 2004. Excluding the
change in income taxes payable, the increase in accounts
payable, accrued and other liabilities in 2005 was
$80.9 million compared to a $42.7 million increase
between 2003 and 2004. In 2005, our prepaid expenses and other
current assets increased $16.6 million compared to a
$2.7 million increase between 2003 and 2004. This increase
resulted primarily from the prepayment of insurance premiums.

The $77 million increase in net cash provided by operating
activities in 2004 compared to 2003 was driven by a
$60 million increase in net earnings before depreciation,
amortization and impairment charges and a $37 million
increase in accounts payable and accrued liabilities.

Our cash used in investing activities is mainly driven by our
capital expenditures, net of sales proceeds. Our capital
expenditures, net of cash sales proceeds were $387 million,
$324 million and $223 million in 2005, 2004 and 2003,
respectively. A summary of our capital expenditures by category
is shown below.

|                                       |          |               |          |         |  |      |          |         |  |   |         |         | 
|-------------------------------------- | -------- | ------------- | -------- | ------- |  | ---- | -------- | ------- |  | - | ------- | ------- | 
|                                       |          | 2005          |          | 2004    |  | 2003
|                                       |          |               |          |         |  |     
|                                       |          |              
|                                       |          | ($ thousands)
|                                      
|                                      
|                                      
|                                      
|Revenue equipment:                     |          |               |          |         |  |      |          |         |  |   |         |        
|                                      
|                                      
|                                      
|                                      
|                                       | Tractors |               | $        | 326,726 |  |      | $        | 326,351 |  |   | $       | 203,115 | 
|                                      
|                                      
|                                      
|                                      
|                                       | Trailers |               |          | 167,139 |  |      |          | 41,264  |  |   |         | 34,007  | 
|                                      
|                                      
|                                      
|                                      
|Facilities                             |          |               | 44,243   |         |  |      | 50,444   |         |  |   | 75,291  |        
|                                      
|                                      
|                                      
|                                      
|Other                                  |          |               | 6,542    |         |  |      | 11,162   |         |  |   | 1,441   |        
|                                       |          |               |          |         |  |      |          |         |  |   |         |        
|Total Capital Expenditures             |          | $             | 544,650  |         |  | $    | 429,221  |         |  | $ | 313,854 |        
|                                      
|                                      
|                                      
|                                      
|Less: Proceeds from Sales of Equipment |          |               | (157,870 | )       |  |      | (105,415 | )       |  |   | (91,012 | )      
|                                       |          |               |          |         |  |      |          |         |  |   |         |        
|Net Capital Expenditures               |          | $             | 386,780  |         |  | $    | 323,806  |         |  | $ | 222,842 |        
|                                       |          |               |          |         |  |      |          |         |  |   |         |        

In addition, we made a loan to Transplace of $6.4 million
in 2005, expended $10.8 million for a portion of the
Trans-Mex purchase in 2004, and paid $81.6 million for the
purchase of Merit Distribution, Inc. in 2003.

29



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##### Table of Contents



Regarding our financing activities, in 2005 we received
$53.1 million in proceeds from the sale of common stock
associated with our employee stock purchase and stock option
plans. The volume of sales increased in 2005 due to the decision
made to accelerate the vesting of all outstanding and unvested
employee stock options. Options that were previously awarded at
a discount are now retroactively subject to new tax regulations
regarding deferred compensation which impose a 20% excise tax to
income created by the exercise of these options after
December 31, 2005. Due to this change in tax law, many
employees exercised their options prior to year end. In
conjunction with the acceleration, we have adopted a new share
repurchase program, under which we may acquire our common stock
using the proceeds received from the exercise of stock options
to minimize the dilution from the exercise of stock options. In
2005, we paid $39.5 million to
repurchase 1,988,181 shares.

In 2004 we repurchased $253 million of treasury stock,
increased our borrowings on our receivable securitization by
$98 million and increased our borrowings on our revolving
line of credit by a net $135 million. We also repaid
$31.6 million of other long-term debt and capital leases
and received $14.5 million in stock option exercise and
employee stock purchase plan proceeds.

Working Capital

As of December 31, 2005 and 2004 we had working capital
deficits of $93.6 million and $70.9 million,
respectively. As discussed in the notes to the financial
statements, the accounts receivable securitization is reflected
as a current liability because the committed term, subject to
annual renewals, is 364 days. The funds received under the
accounts receivable securitization are generally used for
capital expenditures or repurchases of our common stock.
Therefore, our working capital will be reduced by the amount of
the proceeds received under the accounts receivable
securitization but the increase in fixed assets or treasury
stock is not included in working capital.

Credit Facilities

In December 2005, we amended our $550 million revolving
credit agreement (the Credit Agreement) with our
group of lenders. This amendment included a reduction of the
borrowing rate associated with LIBOR borrowings. Interest on
outstanding borrowings is based upon one of two options, which
we select at the time of borrowing: the banks prime rate
or the London Interbank Offered Rate (LIBOR) plus
applicable margins ranging from 40 to 100 basis points, as
defined in the Credit Agreement (currently 75 basis
points). The unused portion of the line of credit is subject to
a commitment fee ranging from 8 to 17.5 basis points
(currently 15 basis points). The Credit Agreement requires
us to meet certain covenants with respect to leverage and fixed
charge coverage ratios and tangible net worth. As of
December 31, 2005 we are in compliance with these debt
covenants. We have $164 million of borrowings and
$189 million of letters of credit outstanding on our line
of credit leaving $197 million available as of
December 31, 2005.

In December of 2005 we expanded our accounts receivable
securitization by $50 million to allow us to receive up to
$300 million of proceeds, subject to eligible trade
accounts receivable. Under the amended agreement, the committed
term was extended to December 20, 2006. As of
December 31, 2005, we had received sales proceeds of
$245 million. Under the terms of our agreement, 93% of our
trade receivables collateralized the securitization arrangement
as of December 31, 2005.

Capital Commitments and Expenditures

As of December 31, 2005, we had $564 million of
commitments outstanding to acquire replacement and additional
revenue equipment through 2007. We have the option to cancel
such commitments upon 90 days notice. We anticipate
spending approximately $290 million for tractors in both
2006 and 2007 and approximately $95 million and
$125 million on trailers and containers in 2006 and 2007,
respectively. We believe we will be able to support these
purchases with cash flows from operating activities, lease
financings and debt.

During the year ended December 31, 2005, we incurred
approximately $50.8 million of non-revenue equipment
capital expenditures. These expenditures were primarily for
facilities and equipment. We anticipate

30



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##### Table of Contents





We will incur capital investments for revenue equipment, as well
as our terminal network facilities and equipment, when we
estimate such investments will generate an appropriate return on
capital.

We believe we will be able to finance needs for working capital,
facilities improvements and expansion, as well as anticipated
fleet replacements and growth, with cash flows from operations,
borrowings available under the line of credit, accounts
receivable securitization and with long-term debt and lease
financing believed to be available to finance revenue equipment
purchases for the next 12 months. Over the long term, we
will continue to have significant capital requirements, which
may require us to seek additional borrowings or equity capital.
The availability of debt financing or equity capital will depend
upon our financial condition and results of operations as well
as prevailing market conditions, the market price of our common
stock and other factors over which we have little or no control.

OFF-BALANCE SHEET ARRANGEMENTS

As discussed in the Commitments note to our Consolidated
Financial Statements, we guarantee certain residual values under
operating lease agreements for revenue equipment. Upon
termination of these operating leases, we would be responsible
for the excess of the guarantee amount above the fair market
value, if any. The maximum potential amount of future payments
we would be required to make under these guarantees is
$35 million. We utilize operating leases as an additional
financing source.

CONTRACTUAL OBLIGATIONS

The tables below summarize our contractual obligations as of
December 31, 2005:

|                              |                                   |                        |         |             |  |           |        |             |  |       |         |       |  |   |         |     |  |   |  |  | 
|----------------------------- | --------------------------------- | ---------------------- | ------- | ----------- |  | --------- | ------ | ----------- |  | ----- | ------- | ----- |  | - | ------- | --- |  | - |  |  | 
|                              |                                   |                       
|                              |                                   | Payments due by period
|                              |                                   |                       
|                              |                                   |                        |         | Less Than 1 |  |           |        | More Than 5
|                              |                                   | Total                  |         | Year        |  | 1-3 Years |        | 3-5 Years   |  | Years
|                              |                                   |                        |         |             |  |           |        |             |  |      
|                              |                                   |                        |         |            
|                              |                                   | ($ thousands)          |         |            
|                             
|                             
|                             
|                             
|Long-Term Debt                |                                   | $                      | 364,000 |             |  | $         |        |             |  | $     | 264,000 |       |  | $ | 100,000 |     |  | $ |  | 
|                             
|                             
|                             
|                             
|Capital Lease Obligations     |                                   |                        | 1,786   |             |  |           | 1,786  |             |  |       |         |       |  |   |         |     |  |   |  | 
|                             
|                             
|                             
|                             
|Operating Leases(1)           |                                   |                        | 75,177  |             |  |           | 40,418 |             |  |       | 34,379  |       |  |   | 380     |     |  |   |  | 
|                             
|                             
|                             
|                             
|Purchase Obligations          |                                   |                        | 17,052  |             |  |           | 17,052 |             |  |       |         |       |  |   |         |     |  |   |  | 
|                             
|                             
|                             
|                             
|Other Long-Term Obligations:  |                                   |                        |         |             |  |           |        |             |  |       |         |       |  |   |         |     |  |   |  | 
|                             
|                             
|                             
|                             
|                              | Fair value of interest rate swaps |                        |         | 1,919       |  |           |        |             |  |       |         | 1,379 |  |   |         | 540 |  |   |  |  | 
|                              |                                   |                        |         |             |  |           |        |             |  |       |         |       |  |   |         |     |  |   |  | 
|Total Contractual Obligations |                                   | $                      | 459,934 |             |  | $         | 59,256 |             |  | $     | 299,758 |       |  | $ | 100,920 |     |  | $ |  | 
|                              |                                   |                        |         |             |  |           |        |             |  |       |         |       |  |   |         |     |  |   |  | 



---



|    |                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Operating leases include an interest element within the
    commitment amount as opposed to the Long-Term Debt and Capital
    Lease Obligations amounts, which do not include an interest
    element.
|   
|(2) | Deferred taxes and long-term portion of claims accruals are
    excluded from Other Long-Term Obligations in the table above.                                                                          
|   
|(3) | Table excludes purchase commitments for revenue equipment which
    are cancelable.                                                                                                                    

INFLATION

Inflation can be expected to have an impact on our operating
costs. A prolonged period of inflation would cause interest
rates, fuel, wages and other costs to increase and would
adversely affect our results of operations unless freight rates
could be increased correspondingly. However, the effect of
inflation has been minimal over the past three years with the
exception of fuel. Our average fuel cost per gallon has
increased 32% from 2004

31



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##### Table of Contents





SEASONALITY

In the transportation industry, results of operations generally
show a seasonal pattern. As customers ramp up for the holiday
season at year-end, the late third and fourth quarters have
historically been our strongest volume quarters. As customers
reduce shipments after the winter holiday season, the first
quarter has historically been a lower volume quarter. Our
operating expenses also tend to be higher in the winter months
primarily due to colder weather, which causes higher fuel
consumption from increased idle time.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including but not
limited to the portions hereof entitled Business and
Managements Discussion and Analysis of Financial
Condition and Results of Operations, contains
forward-looking statements. Additional written or oral
forward-looking statements may be made by the Company from time
to time in filings with the Securities and Exchange Commission
or otherwise. The words believe, expect,
anticipate, estimates,
project, and similar expressions identify
forward-looking statements, which speak only as of the date the
statement was made. Such forward-looking statements are within
the meaning of that term in Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such statements include, but
are not limited to, projections of revenues, income, or loss,
capital expenditures, plans for future operations, expectations
regarding the benefits of our focus on operational metrics and
effective tax rate, plans to increase the companys
intermodal business and service for intermodal customers,
expectations regarding acquisition of containers, financing
needs and plans, anticipated spending for equipment, the
intention to continue to install communication systems, our
focus on activities we expect will enable profitable growth, our
estimates of future compensation expense, our estimate of future
claims expense and accruals, our estimate of the impact of our
impairment, the impact of inflation, plans relating to products
or services of the Company, the benefits of the Companys
terminal network, the continued consolidation of the truckload
industry, the demand of shippers, the capacity of the truckload
industry, the Companys ability to sell its used trucks at
favorable prices, the Companys ability to attract and
retain qualified drivers, the Companys ability to pass on
to its customers increased labor and fuel costs and protect
itself against increases in fuel costs through the use of fuel
efficient equipment, and pending or future acquisitions, as well
as assumptions relating to the foregoing. The Company undertakes
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future
events, or otherwise. Further, nothing herein shall constitute
an adoption or approval of any analyst report regarding Swift,
nor any undertaking to update or comment upon analysts
expectations in the future.

Forward-looking statements are inherently subject to risks
and uncertainties, some of which cannot be predicted or
quantified. Future events and actual results could differ
materially from those set forth in, contemplated by, or
underlying the forward-looking statements. Statements in this
Annual Report, including the Notes to our Consolidated Financial
Statements, Risk Factors and Managements
Discussion and Analysis of Financial Condition and Results of
Operations, describe factors, among others, that could
contribute to or cause such differences. Additional factors that
could cause actual results to differ materially from those
expressed in such forward-looking statements are set forth in
Business and Market for the Registrants
Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities in this Annual Report.






|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About Market
    Risk

We have interest rate exposure arising from borrowings under the
line of credit ($164 million) and the accounts receivable
securitization ($245 million), all of which have variable
interest rates. These variable

32



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##### Table of Contents










|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

The Consolidated Financial Statements of the Company as of
December 31, 2005 and 2004, for each of the years in the
three-year period ended December 31, 2005, together with
related notes and the reports of KPMG LLP, an independent
registered public accounting firm, are set forth on the
following pages. Other required financial information set forth
herein is more fully described in Item 15 of this
Form 10-K.

33



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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders



We have audited the accompanying consolidated balance sheets of
Swift Transportation Co., Inc. and subsidiaries (the Company) as
of December 31, 2005 and 2004 and the related consolidated
statements of earnings, comprehensive income, stockholders
equity and cash flows for each of the years in the three-year
period ended December 31, 2005. These consolidated
financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (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 financial
position of Swift Transportation Co., Inc. and subsidiaries as
of December 31, 2005 and 2004, and the results of their
operations and their cash flows for each of the years in the
three-year period ended December 31, 2005, in conformity
with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
effectiveness of Swift Transportation Co., Inc.s internal
control over financial reporting as of December 31, 2005,
based on criteria established in Internal Control 
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and our report
dated March 6, 2006 expressed an unqualified opinion on
managements assessment of, and the effective operation of,
internal control over financial reporting.



| |         
| | --------
| | KPMG LLP

Phoenix, Arizona



34



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |           |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------- | ---------------------------- | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|                                                                                                                                                       |                                                                            |                             
|                                                                                                                                                       |                                                                            | December 31,                
|                                                                                                                                                       |                                                                            |                             
|                                                                                                                                                       |                                                                            | 2005                         |           | 2004     
|                                                                                                                                                       |                                                                            |                              |           |          
|                                                                                                                                                       |                                                                            |                             
|                                                                                                                                                       |                                                                            | (In thousands, except       
|                                                                                                                                                       |                                                                            | share data)                 
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|ASSETS                                                                                                                                                
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Current assets:                                                                                                                                        |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Cash                                                                       |                              | $         | 13,098    |           |   | $         | 28,245    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Accounts receivable, net                                                   |                              |           | 329,336   |           |   |           | 331,093   |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Equipment sales receivables                                                |                              |           | 6,127     |           |   |           | 4,463     |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Inventories and supplies                                                   |                              |           | 12,948    |           |   |           | 12,989    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Prepaid taxes, licenses and insurance                                      |                              |           | 40,495    |           |   |           | 24,179    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Assets held for sale                                                       |                              |           | 29,791    |           |   |           | 51,757    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Deferred income taxes                                                      |                              |           | 22,319    |           |   |           | 12,839    |          
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                       |                                                                            | Total current assets         |           |           | 454,114   |   |           |           | 465,565   | 
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|Property and equipment, at cost:                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Revenue and service equipment                                              |                              |           | 1,869,832 |           |   |           | 1,698,955 |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Land                                                                       |                              |           | 90,235    |           |   |           | 84,411    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Facilities and improvements                                                |                              |           | 302,680   |           |   |           | 273,473   |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Furniture and office equipment                                             |                              |           | 81,504    |           |   |           | 86,562    |          
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                       |                                                                            | Total property and equipment |           |           | 2,344,251 |   |           |           | 2,143,401 | 
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Less accumulated depreciation and amortization                                                                                                         |                                                                            |                              | 713,782   |           |           |   | 697,222   |          
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                       |                                                                            | Net property and equipment   |           |           | 1,630,469 |   |           |           | 1,446,179 | 
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|Notes receivable, less current portion                                                                                                                 |                                                                            |                              | 22,259    |           |           |   | 3,960     |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Other assets                                                                                                                                           |                                                                            |                              | 17,228    |           |           |   | 16,946    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Customer relationship intangible, net                                                                                                                  |                                                                            |                              | 38,272    |           |           |   | 41,320    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Goodwill                                                                                                                                               |                                                                            |                              | 56,188    |           |           |   | 56,188    |          
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                       |                                                                            | $                            | 2,218,530 |           |           | $ | 2,030,158 |          
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|LIABILITIES AND STOCKHOLDERS
    EQUITY                                                                                                              
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Current liabilities:                                                                                                                                   |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Accounts payable                                                           |                              | $         | 108,027   |           |   | $         | 81,174    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Accrued liabilities                                                        |                              |           | 74,720    |           |   |           | 96,654    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Current portion of claims accruals                                         |                              |           | 116,823   |           |   |           | 101,862   |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Current portion of obligations under capital
    leases and long-term debt |                              |           | 1,786     |           |   |           | 15,205    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Fair value of guarantees                                                   |                              |           | 1,360     |           |   |           | 1,575     |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                       | Securitization of accounts receivable                                      |                              |           | 245,000   |           |   |           | 240,000   |          
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                       |                                                                            | Total current liabilities    |           |           | 547,716   |   |           |           | 536,470   | 
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|Borrowings under revolving credit agreement                                                                                                            |                                                                            |                              | 164,000   |           |           |   | 165,000   |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Senior notes                                                                                                                                           |                                                                            |                              | 200,000   |           |           |   | 200,000   |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Obligations under capital leases and long-term
    debt, less current portion                                                                          |                                                                            |                              |           |           |           |   | 1,787     |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Claims accruals, less current portion                                                                                                                  |                                                                            |                              | 135,458   |           |           |   | 97,188    |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Deferred income taxes                                                                                                                                  |                                                                            |                              | 299,393   |           |           |   | 286,211   |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Fair value of interest rate swaps                                                                                                                      |                                                                            |                              | 1,919     |           |           |   | 5,233     |          
|Commitments and contingencies                                                                                                                          |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Stockholders equity:                                                                                                                                  |                                                                            |                              |           |           |           |   |           |          
|Preferred stock, par value $.001 per share;
    authorized 1,000,000 shares; none issued                                                               |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Common stock, par value $.001 per share;
    authorized 200,000,000 shares; issued 97,198,554 and
    93,467,651 shares in 2005 and 2004, respectively |                                                                            |                              | 97        |           |           |   | 93        |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Additional paid-in capital                                                                                                                             |                                                                            |                              | 403,868   |           |           |   | 333,720   |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Retained earnings                                                                                                                                      |                                                                            |                              | 867,460   |           |           |   | 766,333   |          
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Treasury stock, at cost (23,558,507 and
    21,570,326 shares in 2005 and 2004, respectively)                                                          |                                                                            |                              | (400,780  | )         |           |   | (361,321  | )        
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|                                                                                                                                                      
|Other equity items                                                                                                                                     |                                                                            |                              | (601      | )         |           |   | (556      | )        
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                       |                                                                            | Total stockholders equity   |           |           | 870,044   |   |           |           | 738,269   | 
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          
|                                                                                                                                                       |                                                                            | $                            | 2,218,530 |           |           | $ | 2,030,158 |          
|                                                                                                                                                       |                                                                            |                              |           |           |           |   |           |          

See accompanying notes to consolidated financial statements.

35



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SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |         |           | 
|---------------------------- | ------------------------------------------ | --------------------------------- | --------- | --------- | --------- | ---- | --------- | ------- | --------- | - | --------- | ------- | --------- | 
|                             |                                            |                                  
|                             |                                            | Years Ended December 31,         
|                             |                                            |                                  
|                             |                                            | 2005                              |           | 2004      |           | 2003
|                             |                                            |                                   |           |           |           |     
|                             |                                            |                                  
|                             |                                            | (In thousands, except share data)
|                            
|                            
|                            
|                            
|Operating revenue            |                                            | $                                 | 3,197,455 |           |           | $    | 2,826,201 |         |           | $ | 2,397,655 |        
|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|Operating expenses:          |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|                            
|                            
|                            
|                            
|                             | Salaries, wages and employee benefits      |                                   |           | 1,008,833 |           |      |           | 971,683 |           |   |           | 872,453 |          
|                            
|                            
|                            
|                            
|                             | Operating supplies and expenses            |                                   |           | 286,261   |           |      |           | 274,088 |           |   |           | 233,148 |          
|                            
|                            
|                            
|                            
|                             | Fuel                                       |                                   |           | 610,919   |           |      |           | 446,752 |           |   |           | 326,749 |          
|                            
|                            
|                            
|                            
|                             | Purchased transportation                   |                                   |           | 583,380   |           |      |           | 499,790 |           |   |           | 417,182 |          
|                            
|                            
|                            
|                            
|                             | Rental expense                             |                                   |           | 57,669    |           |      |           | 78,054  |           |   |           | 82,158  |          
|                            
|                            
|                            
|                            
|                             | Insurance and claims                       |                                   |           | 156,525   |           |      |           | 94,850  |           |   |           | 94,685  |          
|                            
|                            
|                            
|                            
|                             | Depreciation, amortization and impairments |                                   |           | 206,154   |           |      |           | 184,608 |           |   |           | 149,138 |          
|                            
|                            
|                            
|                            
|                             | (Gain) loss on equipment disposal          |                                   |           | (942      | )         |      |           | 2,577   |           |   |           | 1,711   |          
|                            
|                            
|                            
|                            
|                             | Communications and utilities               |                                   |           | 30,920    |           |      |           | 30,366  |           |   |           | 28,149  |          
|                            
|                            
|                            
|                            
|                             | Operating taxes and licenses               |                                   |           | 69,676    |           |      |           | 62,866  |           |   |           | 51,241  |          
|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|                             |                                            | Total operating expenses          |           |           | 3,009,395 |      |           |         | 2,645,634 |   |           |         | 2,256,614 | 
|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|Operating income             |                                            |                                   | 188,060   |           |           |      | 180,567   |         |           |   | 141,041   |        
|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|Other (income) expenses:     |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|                            
|                            
|                            
|                            
|                             | Interest expense                           |                                   |           | 26,632    |           |      |           | 18,931  |           |   |           | 16,202  |          
|                            
|                            
|                            
|                            
|                             | Interest income                            |                                   |           | (1,713    | )         |      |           | (908    | )         |   |           | (770    | )        
|                            
|                            
|                            
|                            
|                             | Other                                      |                                   |           | (1,209    | )         |      |           | 2,595   |           |   |           | (2,373  | )        
|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|                             |                                            | Other (income) expenses, net      |           |           | 23,710    |      |           |         | 20,618    |   |           |         | 13,059    | 
|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|Earnings before income taxes |                                            |                                   | 164,350   |           |           |      | 159,949   |         |           |   | 127,982   |        
|                            
|                            
|                            
|                            
|                             | Income taxes                               |                                   |           | 63,223    |           |      |           | 56,467  |           |   |           | 48,611  |          
|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|Net earnings                 |                                            | $                                 | 101,127   |           |           | $    | 103,482   |         |           | $ | 79,371    |        
|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|Basic earnings per share     |                                            | $                                 | 1.39      |           |           | $    | 1.30      |         |           | $ | .95       |        
|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |        
|Diluted earnings per share   |                                            | $                                 | 1.37      |           |           | $    | 1.29      |         |           | $ | .94       |        
|                             |                                            |                                   |           |           |           |      |           |         |           |   |           |        

See accompanying notes to consolidated financial statements.

36



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SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

|                                   |                                                                                                                                                              |                          |         |      |   |      |         |    |  |   |        |      |  
|---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------ | ------- | ---- | - | ---- | ------- | -- |  | - | ------ | ---- | -
|                                   |                                                                                                                                                              |                         
|                                   |                                                                                                                                                              | Years Ended December 31,
|                                   |                                                                                                                                                              |                         
|                                   |                                                                                                                                                              | 2005                     |         | 2004 |   | 2003
|                                   |                                                                                                                                                              |                          |         |      |   |     
|                                   |                                                                                                                                                              |                         
|                                   |                                                                                                                                                              | (In thousands)          
|                                  
|                                  
|                                  
|                                  
|Net earnings                       |                                                                                                                                                              | $                        | 101,127 |      |   | $    | 103,482 |    |  | $ | 79,371 |     
|                                  
|                                  
|                                  
|                                  
|Other comprehensive income (loss): |                                                                                                                                                              |                          |         |      |   |      |         |    |  |   |        |     
|                                  
|                                  
|                                  
|                                  
|                                   | Foreign currency translation                                                                                                                                 |                          |         | (139 | ) |      |         | 16 |  |   |        |      |  
|                                  
|                                  
|                                  
|                                  
|                                   | Net derivative loss on cash flow hedge, net of
    tax effect of $432                                                                                        |                          |         |      |   |      |         |    |  |   |        | (706 | )
|                                  
|                                  
|                                  
|                                  
|                                   | Reclassification of derivative loss on cash flow
    hedge into net earnings, net of tax effect of $58, $55 and $26
    in 2005, 2004 and 2003, respectively |                          |         | 94   |   |      |         | 90 |  |   |        | 44   |  
|                                   |                                                                                                                                                              |                          |         |      |   |      |         |    |  |   |        |     
|Comprehensive income               |                                                                                                                                                              | $                        | 101,082 |      |   | $    | 103,588 |    |  | $ | 78,709 |     
|                                   |                                                                                                                                                              |                          |         |      |   |      |         |    |  |   |        |     

See accompanying notes to consolidated financial statements.

37



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

|                                                                                  |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   |          |  
|--------------------------------------------------------------------------------- |  | --------------------------------- | ---------- | ---------- |  | -------- | -- | -------- |  | ------ | ------- | ------------- |  | ------ | ------- |  |  | - | -------- | - |  | - | ---- | - |  | - | -------- | -
|                                                                                  |  |                                   |            |            |  |          |    |          |  |        |         |              
|                                                                                  |  | Common Stock                      |            | Additional |  |          |    |          |  | Other  |         | Total        
|                                                                                  |  |                                   |            | Paid-In    |  | Retained |    | Treasury |  | Equity |         | Stockholders
|                                                                                  |  | Shares                            |            | Par Value  |  | Capital  |    | Earnings |  | Stock  |         | Items         |  | Equity
|                                                                                  |  |                                   |            |            |  |          |    |          |  |        |         |               |  |       
|                                                                                  |  |                                  
|                                                                                  |  | (In thousands, except share data)
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Balances, December 31, 2002                                                       |  |                                   | 90,182,273 |            |  | $        | 90 |          |  | $      | 272,099 |               |  | $      | 583,480 |  |  | $ | (89,891  | ) |  | $ |      |   |  | $ | 765,778  |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Issuance of common stock under stock option and
    employee stock purchase plans |  |                                   | 1,197,503  |            |  |          | 1  |          |  |        | 13,965  |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   | 13,966   |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Income tax benefit arising from the exercise of
    stock options                 |  |                                   |            |            |  |          |    |          |  |        | 3,192   |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   | 3,192    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Amortization of deferred compensation                                             |  |                                   |            |            |  |          |    |          |  |        | 1,839   |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   | 1,839    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Purchase of 1,201,000 shares of treasury
    stock                                |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   | (18,869  | ) |  |   |      |   |  |   | (18,869  | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cash flow hedge                                                                   |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   | (706 | ) |  |   | (706     | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Reclassification of cash flow hedge to interest
    expense                       |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   | 44   |   |  |   | 44       |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net earnings                                                                      |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        | 79,371  |  |  |   |          |   |  |   |      |   |  |   | 79,371   |  
|                                                                                  |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   |          |  
|Balances, December 31, 2003                                                       |  |                                   | 91,379,776 |            |  |          | 91 |          |  |        | 291,095 |               |  |        | 662,851 |  |  |   | (108,760 | ) |  |   | (662 | ) |  |   | 844,615  |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Issuance of common stock under stock option and
    employee stock purchase plans |  |                                   | 1,145,720  |            |  |          | 1  |          |  |        | 14,680  |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   | 14,681   |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Income tax benefit arising from the exercise of
    stock options                 |  |                                   |            |            |  |          |    |          |  |        | 2,403   |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   | 2,403    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Amortization of deferred compensation                                             |  |                                   |            |            |  |          |    |          |  |        | 5,381   |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   | 5,381    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Purchase of 14,132,249 shares of treasury
    stock                               |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   | (252,561 | ) |  |   |      |   |  |   | (252,561 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Purchase of remaining 51% of Trans-Mex                                            |  |                                   | 942,155    |            |  |          | 1  |          |  |        | 20,161  |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   | 20,162   |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Accumulated other comprehensive loss                                              |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   | 90   |   |  |   | 90       |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Foreign currency translation adjustment                                           |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   | 16   |   |  |   | 16       |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net earnings                                                                      |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        | 103,482 |  |  |   |          |   |  |   |      |   |  |   | 103,482  |  
|                                                                                  |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   |          |  
|Balances, December 31, 2004                                                       |  |                                   | 93,467,651 |            |  |          | 93 |          |  |        | 333,720 |               |  |        | 766,333 |  |  |   | (361,321 | ) |  |   | (556 | ) |  |   | 738,269  |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Issuance of common stock under stock option and
    employee stock purchase plans |  |                                   | 3,730,903  |            |  |          | 4  |          |  |        | 53,093  |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   | 53,097   |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Income tax benefit arising from the exercise of
    stock options                 |  |                                   |            |            |  |          |    |          |  |        | 3,062   |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   | 3,062    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Amortization of deferred compensation                                             |  |                                   |            |            |  |          |    |          |  |        | 13,993  |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   | 13,993   |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Purchase of 1,988,181 shares of treasury
    stock                                |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   | (39,459  | ) |  |   |      |   |  |   | (39,459  | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Accumulated other comprehensive loss                                              |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   | 94   |   |  |   | 94       |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Foreign currency translation adjustment                                           |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   | (139 | ) |  |   | (139     | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net earnings                                                                      |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        | 101,127 |  |  |   |          |   |  |   |      |   |  |   | 101,127  |  
|                                                                                  |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   |          |  
|Balances, December 31, 2005                                                       |  |                                   | 97,198,554 |            |  | $        | 97 |          |  | $      | 403,868 |               |  | $      | 867,460 |  |  | $ | (400,780 | ) |  | $ | (601 | ) |  | $ | 870,044  |  
|                                                                                  |  |                                   |            |            |  |          |    |          |  |        |         |               |  |        |         |  |  |   |          |   |  |   |      |   |  |   |          |  

See accompanying notes to consolidated financial statements.

38



---



##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |          |         |         |          |  
|------------------------------------------------------------------------ | --------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ----------------------------------------------- | ------------------------------------------------------- | ------- | ------- | -------- | -------- | ------- | ------- | -------- | -------- | ------- | ------- | -------- | -
|                                                                         |                                                                                         |                                                                  
|                                                                         |                                                                                         | Years Ended December 31,                                         
|                                                                         |                                                                                         |                                                                  
|                                                                         |                                                                                         | 2005                                                              |                                                 | 2004                                                    |         | 2003   
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |        
|                                                                         |                                                                                         |                                                                  
|                                                                         |                                                                                         | (In thousands)                                                   
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Cash flows from operating activities:                                    |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Net earnings                                                                            |                                                                   | $                                               | 101,127                                                 |         |         | $        | 103,482  |         |         | $        | 79,371   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Adjustments to reconcile net earnings to net cash
    provided by operating activities: |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |          |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Depreciation, amortization and impairments                        |                                                 |                                                         | 199,680 |         |          |          | 175,854 |         |          |          | 148,263 |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Deferred income taxes                                             |                                                 |                                                         | 3,702   |         |          |          | 21,554  |         |          |          | 30,566  |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Income tax benefit arising from the exercise of
    stock options |                                                 |                                                         | 3,062   |         |          |          | 2,403   |         |          |          | 3,192   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Provision for losses on accounts receivable                       |                                                 |                                                         | 7,130   |         |          |          | 7,316   |         |          |          | 8,440   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Equity losses of Transplace                                       |                                                 |                                                         | 3,671   |         |          |          | 2,898   |         |          |          | 1,204   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Amortization of deferred compensation                             |                                                 |                                                         | 13,993  |         |          |          | 5,381   |         |          |          | 1,839   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Change in market value of interest rate swaps                     |                                                 |                                                         | (3,314  | )       |          |          | (2,630  | )       |          |          | (2,084  | )      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | (Gain) loss on sale of revenue equipment                          |                                                 |                                                         | (942    | )       |          |          | 2,577   |         |          |          | 1,711   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Gain on sale of non-revenue equipment                             |                                                 |                                                         | (4,643  | )       |          |          | (1,918  | )       |          |          |         |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Impairment of property and note receivable                        |                                                 |                                                         | 9,680   |         |          |          | 9,226   |         |          |          |         |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Amortization of deferred legal fees                               |                                                 |                                                         |         |         |          |          | 8,416   |         |          |          | 8,476   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Increase (decrease) in cash resulting from
    changes in:        |                                                 |                                                         |         |         |          |          |         |         |          |          |         |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         |                                                                   | Accounts receivable                             |                                                         |         | (5,163  | )        |          |         | (43,990 | )        |          |         | (24,129 | )       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         |                                                                   | Inventories and supplies                        |                                                         |         | (240    | )        |          |         | 4,601   |          |          |         | (1,056  | )       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         |                                                                   | Prepaid expenses and other current assets       |                                                         |         | (16,551 | )        |          |         | (2,680  | )        |          |         | 193     |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         |                                                                   | Other assets                                    |                                                         |         | (832    | )        |          |         | (47     | )        |          |         | (3,269  | )       
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         |                                                                   | Accounts payable, accrued and other liabilities |                                                         |         | 52,188  |          |          |         | 72,103  |          |          |         | 35,172  |         
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                         |                                                                                         |                                                                   |                                                 | Net cash provided by operating activities               |         |         | 362,548  |          |         |         | 364,546  |          |         |         | 287,889  |  
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|Cash flows from investing activities:                                    |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Proceeds from sale of autohaul assets                                                   |                                                                   |                                                 | 28,500                                                  |         |         |          |          |         |         |          |          |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Proceeds from sale of property and equipment                                            |                                                                   |                                                 | 129,370                                                 |         |         |          | 105,415  |         |         |          | 91,012   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Capital expenditures                                                                    |                                                                   |                                                 | (544,650                                                | )       |         |          | (429,221 | )       |         |          | (313,854 | )      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Proceeds from sale of assets held for sale                                              |                                                                   |                                                 | 8,641                                                   |         |         |          | 9,602    |         |         |          | 8,740    |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Loans to investment entities                                                            |                                                                   |                                                 | (6,331                                                  | )       |         |          |          |         |         |          | (3,377   | )      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Payments received on equipment sales receivables                                        |                                                                   |                                                 | 4,463                                                   |         |         |          | 6,208    |         |         |          | 11,100   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Payment for purchase of Trans-Mex                                                       |                                                                   |                                                 |                                                         |         |         |          | (10,810  | )       |         |          |          |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Payment for purchase of Merit Distribution
    Services, Inc.                           |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          | (81,590  | )      
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                         |                                                                                         |                                                                   |                                                 | Net cash used in investing activities                   |         |         | (380,007 | )        |         |         | (318,806 | )        |         |         | (287,969 | )
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|Cash flows from financing activities:                                    |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Issuance of Senior Notes                                                                |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          | 200,000  |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Issuance of long-term debt                                                              |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          | 2,044    |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Repayments of long-term debt and capital leases                                         |                                                                   |                                                 | (15,207                                                 | )       |         |          | (31,612  | )       |         |          | (51,821  | )      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Borrowings under line of credit                                                         |                                                                   |                                                 |                                                         |         |         |          | 165,000  |         |         |          | 120,800  |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Repayments of borrowings under line of credit                                           |                                                                   |                                                 | (1,000                                                  | )       |         |          | (30,000  | )       |         |          | (227,200 | )      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Change in borrowings under accounts receivable
    securitization                       |                                                                   |                                                 | 5,000                                                   |         |         |          | 98,000   |         |         |          | (27,000  | )      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Proceeds from sale of common stock                                                      |                                                                   |                                                 | 53,097                                                  |         |         |          | 14,517   |         |         |          | 13,913   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Accumulated other comprehensive loss                                                    |                                                                   |                                                 | 94                                                      |         |         |          | 90       |         |         |          | (662     | )      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Purchase of treasury stock                                                              |                                                                   |                                                 | (39,459                                                 | )       |         |          | (252,561 | )       |         |          | (18,869  | )      
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                         |                                                                                         |                                                                   |                                                 | Net cash provided by (used in) financing
    activities |         |         | 2,525    |          |         |         | (36,566  | )        |         |         | 11,205   |  
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|Effect of exchange rate changes on cash                                  |                                                                                         |                                                                   | (213                                            | )                                                       |         |         | 16       |          |         |         |          |         
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|Net increase (decrease) in cash                                          |                                                                                         |                                                                   | (15,147                                         | )                                                       |         |         | 9,190    |          |         |         | 11,125   |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Cash at beginning of year                                                |                                                                                         |                                                                   | 28,245                                          |                                                         |         |         | 19,055   |          |         |         | 7,930    |         
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|Cash at end of year                                                      |                                                                                         | $                                                                 | 13,098                                          |                                                         |         | $       | 28,245   |          |         | $       | 19,055   |         
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|Supplemental disclosure of cash flow information:                        |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Cash paid during the year for:                                                          |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |          |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                                                                                         | Interest                                                          |                                                 | $                                                       | 29,144  |         |          | $        | 21,337  |         |          | $        | 19,600  |        
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                         |                                                                                         | Income taxes                                                      |                                                 | $                                                       | 68,157  |         |          | $        | 3,188   |         |          | $        | 17,488  |        
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|Supplemental schedule of noncash investing and
    financing activities: |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Equipment sales receivables                                                             |                                                                   | $                                               | 6,127                                                   |         |         | $        | 4,674    |         |         | $        | 5,998    |        
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                         | Equipment purchase accrual                                                              |                                                                   | $                                               | 5,231                                                   |         |         |          |          |         |         |          |          |        
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                         | Guarantee of third party letter of credit                                               |                                                                   | $                                               | 367                                                     |         |         |          |          |         |         |          |          |        
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                         | Notes receivable from sale of autohaul assets                                           |                                                                   | $                                               | 17,635                                                  |         |         |          |          |         |         |          |          |        
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                         | Stock issued in acquisition of Trans-Mex                                                |                                                                   |                                                 |                                                         |         |         | $        | 20,162   |         |         |          |          |        
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                         | Accrual of additional Merit acquisition cost                                            |                                                                   |                                                 |                                                         |         |         | $        | 5,000    |         |         |          |          |        
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         
|                                                                         | Fair value of operating lease guarantees                                                |                                                                   |                                                 |                                                         |         |         |          |          |         |         | $        | 2,156    |        
|                                                                         |                                                                                         |                                                                   |                                                 |                                                         |         |         |          |          |         |         |          |         

See accompanying notes to consolidated financial statements.

39



---



##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2005, 2004 AND 2003




|    |                                           
|--- | ------------------------------------------
|(1) | Summary of Significant Accounting Policies



| |                        
| | -----------------------
| | Description of Business

Swift Transportation Co., Inc., a Nevada holding company,
together with its wholly-owned subsidiaries
(Company), is a national truckload carrier operating
predominantly in one industry, road transportation, throughout
the continental United States and Mexico and thus has only one
reportable segment. The Company operates a national terminal
network and a fleet of approximately 18,000 tractors, at the end
of 2005, from its headquarters in Phoenix, Arizona.



| |                            
| | ---------------------------
| | Principles of Consolidation

The consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries. All significant
inter-company balances and transactions have been eliminated in
consolidation.

The Companys investments in entities are accounted for in
accordance with the Accounting Principles Board No. 18,
using the equity method of accounting for investments.

Special purpose entities are accounted for using the criteria of
Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities (a replacement of FASB
Statement No. 125). This Statement provides
consistent standards for distinguishing transfers of financial
assets that are sales from transfers that are secured borrowings.



| |                          
| | -------------------------
| | Cash and Cash Equivalents

The Company considers all highly liquid debt instruments
purchased with original maturities of three months or less to be
cash equivalents.



| |                         
| | ------------------------
| | Inventories and Supplies

Inventories and supplies consist primarily of spare parts,
tires, fuel and supplies and are stated at cost. Cost is
determined using the first-in, first-out (FIFO) method.



| |                       
| | ----------------------
| | Property and Equipment

Property and equipment are stated at cost. Gains and losses in
2005, 2004 and 2003 were $3.5 million and
$1.7 million, $2.2 million and $1.4 million,
$1.7 million and $262,000, respectively.

Depreciation on property and equipment is calculated on the
straight-line method over the estimated useful lives of 10 to
40 years for facilities and improvements, 3 to
12 years for revenue and service equipment and 3 to
5 years for furniture and office equipment.

Tires on revenue equipment purchased are capitalized as a
component of the related equipment cost when the vehicle is
placed in service and depreciated over the life of the vehicle.
Replacement tires are expensed when placed in service.



| |         
| | --------
| | Goodwill

Goodwill represents the excess of purchase price over fair value
of net assets acquired. The Company tests goodwill for
impairment on an annual basis. The Company has
$56.2 million of goodwill at December 31, 2005 and
2004. The test of goodwill impairment requires judgment,
including the identification of reporting units, assigning
assets and liabilities (including goodwill) to reporting units
and determining the fair value of each reporting unit. The
Company has used a discounted cash flow model to estimate the
fair value of the reporting

40



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

units, which includes several significant assumptions, including
estimating future cash flows, determining appropriate discount
rates and other assumptions.



| |                    
| | -------------------
| | Revenue Recognition

Operating revenues and related direct costs are recognized as of
the date the freight is picked up for shipment. Our revenue
recognition policy is consistent with method two under
EITF 91-9. The Company has examined the materiality of
recognizing revenue in accordance with method two of
EITF 91-9 as compared to a more preferable method (i.e.
method three or five) on both a quarterly and annual basis. We
do not believe the quarterly or annual financial statements
derived from the application of this method differ materially
from the results that would be derived under method three
discussed within EITF 91-9 due to the Companys
relatively short length of haul.



| |                         
| | ------------------------
| | Stock Compensation Plans

The Company applies APB Opinion No. 25 and related
interpretations in accounting for its plans. For the Employee
Stock Purchase Plan, the purchase price of the stock is
85 percent of the lower of the beginning-of-period or
end-of-period (each period being the first and second six
calendar months) market price. The Employee Stock Purchase Plan
qualifies under Section 423 of the Internal Revenue Code.
Accordingly, no compensation cost has been recognized for the
Employee Stock Purchase Plan. The compensation cost that has
been charged against income for the Fixed Stock Option Plans was
$14.0 million, $5.4 million and $1.8 million and
for 2005, 2004 and 2003, respectively. See
Stockholders Equity footnote for a discussion
of the impact of acceleration of the vesting of stock options.

Had compensation cost for the Companys four stock-based
compensation plans been determined consistent with FASB
Statement No. 123 (SFAS No. 123), the
Companys net earnings and earnings per share would have
been reduced to the pro forma amounts indicated below:

|                            |  |                                                                       |  |      |         |      |  |      |         |   |  |   |        |  
|--------------------------- |  | --------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------ | -
|                            |  |                                                                       |  | 2005 |         | 2004 |  | 2003
|                            |  |                                                                       |  |      |         |      |  |     
|Net earnings (in thousands) |  | As Reported                                                           |  | $    | 101,127 |      |  | $    | 103,482 |   |  | $ | 79,371 |  
|                            |  | Add: Compensation expense, using intrinsic
    method, net of tax     |  |      | 8,606   |      |  |      | 3,444   |   |  |   | 1,140  |  
|                            |  | Deduct: Compensation expense, using fair value
    method, net of tax |  |      | (54,668 | )    |  |      | (9,638  | ) |  |   | (6,020 | )
|                            |  |                                                                       |  |      |         |      |  |      |         |   |  |   |        |  
|                            |  | Pro forma                                                             |  | $    | 55,065  |      |  | $    | 97,288  |   |  | $ | 74,491 |  
|                            |  |                                                                       |  |      |         |      |  |      |         |   |  |   |        |  
|Basic earnings per share    |  | As Reported                                                           |  | $    | 1.39    |      |  | $    | 1.30    |   |  | $ | .95    |  
|                            |  |                                                                       |  |      |         |      |  |      |         |   |  |   |        |  
|                            |  | Pro forma                                                             |  | $    | .76     |      |  | $    | 1.23    |   |  | $ | .89    |  
|                            |  |                                                                       |  |      |         |      |  |      |         |   |  |   |        |  
|Diluted earnings per share  |  | As Reported                                                           |  | $    | 1.37    |      |  | $    | 1.29    |   |  | $ | .94    |  
|                            |  |                                                                       |  |      |         |      |  |      |         |   |  |   |        |  
|                            |  | Pro forma                                                             |  | $    | .75     |      |  | $    | 1.22    |   |  | $ | .88    |  
|                            |  |                                                                       |  |      |         |      |  |      |         |   |  |   |        |  

Pro forma net earnings reflect only options granted in 1995
through 2005. Therefore, the full impact of calculating
compensation cost for stock options under SFAS No. 123
is not reflected in the pro forma net earnings amounts presented
above because compensation cost is reflected over the
options vesting period and compensation cost for options
granted prior to January 1, 1995 is not considered under
SFAS No. 123.



| |             
| | ------------
| | Income Taxes

The Company accounts for income taxes under the asset and
liability method. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
differences between the financial

41



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

statement carrying amount of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is
recognized in the period that includes the enactment date.



| |                 
| | ----------------
| | Use of Estimates

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



| |                                                    
| | ---------------------------------------------------
| | Accounting Standards Not Yet Adopted by the Company

The Financial Accounting Standards Board has issued Statements
of Financial Accounting Standard (SFAS) and
Interpretations (FIN) for which the required
implementation dates have not yet become effective. A new
standard that will likely materially impact the Company is
discussed below.

In December 2004, SFAS No. 123(R), Share-Based
Payment, was issued. This Statement requires all share
based payments to employees, including grants of employee stock
options, be recognized in the financial statements upon a
grant-date fair value of an award as opposed to the intrinsic
value method of accounting for stock-based employee compensation
under Accounting Principles Board Opinion No. 25, which the
Company currently uses. The standard is effective for the
Company beginning January 1, 2006. On September 19,
2005, the Compensation Committee of the Companys Board of
Directors accelerated the vesting of all outstanding and
unvested employee stock options, requiring that the Company
record a $12.4 million non-cash expense. The vesting period
for stock options held by the non-employee members of the Board
of Directors was not accelerated. Also, in connection with the
acceleration of vesting of the stock options, the Compensation
Committee of the Companys Board of Directors is modifying
the structure of its compensation program to reduce the number
of stock options awarded in the future, to reduce the number of
employees eligible for awards and to incorporate a restricted
stock element that includes performance standard objectives. The
Company estimates compensation expense related to
SFAS 123(R) will be less than $500,000 in 2006 without
consideration of future awards.



|    |                    
|--- | -------------------
|(2) | Accounts Receivable

Accounts receivable consists of:

|                                     |  |                |         |      |  |   |         | 
|------------------------------------ |  | -------------- | ------- | ---- |  | - | ------- | 
|                                     |  |               
|                                     |  | December 31,  
|                                     |  |               
|                                     |  | 2005           |         | 2004
|                                     |  |                |         |     
|                                     |  |               
|                                     |  | (In thousands)
|                                    
|                                    
|                                    
|                                    
|Trade customers                      |  | $              | 331,884 |      |  | $ | 318,875 | 
|                                    
|                                    
|                                    
|                                    
|Equipment manufacturers              |  |                | 3,385   |      |  |   | 1,756   | 
|                                    
|                                    
|                                    
|                                    
|Income tax receivable                |  |                | 3,002   |      |  |   | 19,469  | 
|                                    
|                                    
|                                    
|                                    
|Other                                |  |                | 5,417   |      |  |   | 3,933   | 
|                                     |  |                |         |      |  |   |         | 
|                                     |  |                | 343,688 |      |  |   | 344,033 | 
|                                    
|                                    
|                                    
|                                    
|Less allowance for doubtful accounts |  |                | 14,352  |      |  |   | 12,940  | 
|                                     |  |                |         |      |  |   |         | 
|                                     |  | $              | 329,336 |      |  | $ | 331,093 | 
|                                     |  |                |         |      |  |   |         | 

42



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The schedule of allowance for doubtful accounts is as follows:

|                         |  |                |        |           |  |            |       |           |  |         |     |  |  |   |         |   |  |   |        | 
|------------------------ |  | -------------- | ------ | --------- |  | ---------- | ----- | --------- |  | ------- | --- |  |  | - | ------- | - |  | - | ------ | 
|                         |  | Beginning      |        |           |  |            |       |           |  | Ending 
|                         |  | Balance        |        | Additions |  | Recoveries |       | Writeoffs |  | Balance
|                         |  |                |        |           |  |            |       |           |  |        
|                         |  |               
|                         |  | (In thousands)
|                        
|                        
|                        
|                        
|Years ended December 31: |  |                |        |           |  |            |       |           |  |         |     |  |  |   |         |   |  |   |        | 
|                        
|                        
|                        
|                        
|2005                     |  | $              | 12,940 |           |  | $          | 7,130 |           |  | $       | 227 |  |  | $ | (5,945  | ) |  | $ | 14,352 | 
|                         |  |                |        |           |  |            |       |           |  |         |     |  |  |   |         |   |  |   |        | 
|2004                     |  | $              | 7,983  |           |  | $          | 7,316 |           |  | $       | 33  |  |  | $ | (2,392  | ) |  | $ | 12,940 | 
|                         |  |                |        |           |  |            |       |           |  |         |     |  |  |   |         |   |  |   |        | 
|2003                     |  | $              | 12,185 |           |  | $          | 8,440 |           |  | $       | 7   |  |  | $ | (12,649 | ) |  | $ | 7,983  | 
|                         |  |                |        |           |  |            |       |           |  |         |     |  |  |   |         |   |  |   |        | 



|    |                     
|--- | --------------------
|(3) | Assets Held For Sale

As of December 31, 2005, assets held for sale, which are
stated at the lower of depreciated cost or fair value less costs
to sell, consist of two properties and certain noncore assets,
principally specialized trailers. The Company expects to dispose
of these assets within the next twelve months and does not
expect any material loss on these dispositions. During 2005, the
Company identified certain trailers that will no longer be
utilized by the Company. The majority of these trailers are
specialized equipment and the Company recorded an expense of
$6.4 million to reduce the carrying value of these assets
to their fair value less costs to sell. This charge is included
in depreciation, amortization and impairment expense. Also in
2005, the Company recorded a $1.3 million charge to reduce
the carrying value of an underutilized Mexican facility to its
fair value less cost to sell. The charge is included in other
expense on the Consolidated Statement of Earnings.

As of December 31, 2004, assets held for sale included four
properties and the autohaul revenue producing equipment and
related Selkirk facility. We recorded a $4.0 million
impairment to the autohaul assets in 2004. This impairment is
recorded within depreciation, amortization and impairment
expense.

The Company disposed of two properties in 2003, which had been
identified as of December 31, 2002 as assets held for sale
and stated at the lower of depreciated cost or fair value less
costs to sell. The Company received $8.7 million, net of
expenses, and recognized a gain of $453,000, which is included
in Other Income on the Consolidated Statement of Earnings.



|    |                               
|--- | ------------------------------
|(4) | Equity Investment  Transplace

The Company and four other large transportation companies
contributed their transportation logistics businesses along with
associated intangible assets to Transplace, a leading provider
of logistics and transportation management services. Transplace
commenced operations on July 1, 2000. The Company also
contributed $10,000,000 to Transplace in 2000.

As a transportation logistics company, Transplace manages
shippers transportation needs and receives a fee for this
service. The Company may receive from Transplace the opportunity
to provide transportation services to shippers. Through the
second quarter of 2005, the Company was obligated to use
Transplace to obtain any additional capacity required from other
trucking companies for the Companys customers. In 2005,
Transplace agreed that all shareholders could source their
additional capacity needs and hence, the Company restarted its
own brokerage operation. During the years ended
December 31, 2005, 2004 and 2003, the Company received less
than 3% of its operating revenue from Transplace and paid less
than 4% of its purchased transportation to Transplace.

The Companys interest in Transplace, which is accounted
for using the equity method, is approximately 29%. The Company
recorded equity losses of $3.7 million, $2.9 million
and $1.2 million in other expense during the years ending
December 31, 2005, 2004 and 2003, respectively for
Transplace.

43



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The Companys equity in the net assets of Transplace
exceeds its investment account by approximately $30 million
as of December 31, 2005 and 2004. As Transplace records
amortization or impairment of goodwill and intangibles, the
Company will accrete an equal amount of basis difference to
offset such amortization or impairment.

The Company received $19.1 million, $43.0 million and
$53.8 million in operating revenue in 2005, 2004 and 2003,
respectively, for transportation services provided to
Transplace. At December 31, 2005 and 2004,
$2.1 million and $5.1 million, respectively, was owed
to the Company for these services.



|    |                 
|--- | ----------------
|(5) | Notes Receivable

In January 2005, the Company loaned $6.3 million to
Transplace Texas, LP, a subsidiary of Transplace, Inc. of
which the Company owns an equity interest of approximately 29%.
This note receivable is being reduced as the Company records its
portion of the losses incurred by Transplace. As of
December 31, 2005, this note has been reduced by
approximately $3.5 million. At such time as the note is
repaid in full, the amount of losses previously recorded as a
reduction of the note receivable will be recognized as a gain.

In April 2005, we completed the sale of our autohaul assets and
business for approximately $46.1 million, $25 million
of which was paid in cash at closing, $3.5 million was paid
on July 15, 2005, $0.6 million was paid on
January 15, 2006 and $17 million is payable to Swift
in the form of a subordinated note due over a six year period
ending April 2011.

Notes receivable consist of the following:

|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   |                |        |        |  |   |       |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | ------ | ------ |  | - | ----- |  | 
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   |               
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   | December 31,  
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   |               
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   | 2005           |        | 2004  
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   |                |        |       
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   |               
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   | (In thousands)
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                              
|Note receivable of $6,331,000 from Transplace,
    net of equity losses, bearing interest of 6% per annum and
    principal due and payable on January 7, 2007 |                                                                                                                                                                                                                                                                                                   | $              | 2,841  |        |  |   |       | 
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                              
|Notes receivable from Auto Carrier Holdings, Inc.:                                                                                                             |                                                                                                                                                                                                                                                                                                   |                |        |        |  |   |       | 
|                                                                                                                                                               | (1) $17,000,000 accruing interest at 1 1/2%
    through April 2006 and 4% thereafter due and payable quarterly
    in arrears. Principal is due and payable in quarterly
    installments of $354,167 beginning June 30, 2007 through
    March 31, 2011. The remaining balance is due April 2011 |                |        |        |  |   |       |  | 
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                               | (2) $635,000 accruing interest at 4% payable
    quarterly, principal paid January 15, 2006                                                                                                                                                                                                       |                |        | 17,635 |  |   |       |  | 
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                              
|Note receivable from Transportes EASO, payable on
    demand                                                                                                   |                                                                                                                                                                                                                                                                                                   |                | 2,418  |        |  |   | 3,960 | 
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   |                |        |        |  |   |       | 
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   |                | 22,894 |        |  |   | 3,960 | 
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                              
|                                                                                                                                                              
|Less current portion                                                                                                                                           |                                                                                                                                                                                                                                                                                                   |                | (635   | )      |  |   |       | 
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   |                |        |        |  |   |       | 
|Notes receivable, less current portion                                                                                                                         |                                                                                                                                                                                                                                                                                                   | $              | 22,259 |        |  | $ | 3,960 | 
|                                                                                                                                                               |                                                                                                                                                                                                                                                                                                   |                |        |        |  |   |       | 

44



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                    
|--- | -------------------
|(6) | Accrued Liabilities

Accrued liabilities consists of:

|                       |  |                |        |      |  |   |        | 
|---------------------- |  | -------------- | ------ | ---- |  | - | ------ | 
|                       |  |               
|                       |  | December 31,  
|                       |  |               
|                       |  | 2005           |        | 2004
|                       |  |                |        |     
|                       |  |               
|                       |  | (In thousands)
|                      
|                      
|                      
|                      
|Employee compensation  |  | $              | 42,628 |      |  | $ | 53,960 | 
|                      
|                      
|                      
|                      
|Fuel and mileage taxes |  |                | 2,592  |      |  |   | 2,341  | 
|                      
|                      
|                      
|                      
|Income taxes payable   |  |                | 5,763  |      |  |   | 34,514 | 
|                      
|                      
|                      
|                      
|Other                  |  |                | 23,737 |      |  |   | 5,839  | 
|                       |  |                |        |      |  |   |        | 
|                       |  | $              | 74,720 |      |  | $ | 96,654 | 
|                       |  |                |        |      |  |   |        | 



|    |                
|--- | ---------------
|(7) | Claims Accruals

The Companys insurance program for workers compensation,
liability, physical damage and cargo damage involves
self-insurance, with varying risk retention levels. Claims in
excess of these risk retention levels are covered by insurance
in amounts which management considers adequate.

Claims accruals represent accruals for the uninsured portion of
pending claims at December 31, 2005 and 2004. The current
portion reflects the amounts of claims expected to be paid in
the following year. These accruals are estimated based on
managements evaluation of the nature and severity of
individual claims and an estimate of future claims development
based on the Companys past claims experience. Claims
accruals also include accrued medical expenses under the
Companys group medical insurance program. These accruals
are estimated based on our evaluation of the nature and severity
of individual claims and an estimate of future claims
development based upon historical claims development trends.
Insurance and claims expense will vary as a percentage of
operating revenue from period to period based on the frequency
and severity of claims incurred in a given period as well as
changes in claims development trends.



|    |                                   
|--- | ----------------------------------
|(8) | Accounts Receivable Securitization

In December 1999, the Company (through a wholly-owned
bankruptcy-remote special purpose subsidiary) entered into an
agreement to sell, on a revolving basis, interests in its
accounts receivable to two unrelated financial entities. The
bankruptcy-remote subsidiary has the right to repurchase the
receivables from the unrelated entities. Therefore, the
transaction does not meet the criteria for sale treatment under
the accounting standards and is reflected as a secured borrowing
in the financial statements.

In the fourth quarter of 2005 we expanded our accounts
receivable securitization by $50 million. Under the amended
agreement, the Company can receive up to a maximum of
$300 million of proceeds, subject to eligible receivables
and will pay a program fee recorded as interest expense, as
defined in the agreement. The committed term was also extended
to December 20, 2006. The Company will pay commercial paper
interest rates on the proceeds received (approximately 4.25% at
December 31, 2005). The proceeds received will be reflected
as a current liability on the consolidated financial statements
because the committed term, subject to annual renewals, is
364 days. As of December 31, 2005 and 2004 there were
$245 million and $240 million, respectively, of
proceeds received.



|    |                                         
|--- | ----------------------------------------
|(9) | Fair Value of Operating Lease Guarantees

The Company guarantees certain residual values under its
operating lease agreements for revenue equipment. At the
termination of these operating leases, the Company would be
responsible for the excess of the guarantee amount above the
fair market value, if any. As of December 31, 2005 and
2004, the Company has recorded a liability for the estimated
fair value of the guarantees, entered into subsequent to
January 1,

45



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

2003, in the amount of $1.4 million and $1.6 million,
respectively. The maximum potential amount of future payments
the Company would be required to make under all of these
guarantees is $21.8 million.



|     |                                            
|---- | -------------------------------------------
|(10) | Borrowings Under Revolving Credit Agreement

Our recently amended credit facility is a $550 million
revolving credit agreement with a group of lenders and matures
in December 2010. Interest on outstanding borrowings is based
upon one of two options, which we select at the time of
borrowing: the banks prime rate or the London Interbank
Offered Rate (LIBOR) plus applicable margins ranging from
40 to 100 basis points, as defined in the Credit Agreement
(currently 75 basis points). The unused portion of the line
of credit is subject to a commitment fee ranging from 8 to
17.5 basis points (currently 15 basis points). As of
December 31, 2005 and 2004, there was $164 million and
$165 million, respectively, outstanding under the line of
credit. There are $189 million of letters of credit
outstanding on our line of credit as of December 31, 2005
leaving $197 million available.

The Credit Agreement requires the Company to meet certain
covenants with respect to leverage and fixed charge coverage
ratios and tangible net worth. As of December 31, 2005 the
Company is in compliance with these debt covenants.

The Credit Agreement includes financing for letters of credit.
The Company has outstanding letters of credit primarily for
workers compensation and liability self-insurance purposes
totaling $189 million at December 31, 2005.



|     |                                                    
|---- | ---------------------------------------------------
|(11) | Obligations Under Capital Leases and Long-Term Debt

The Company leases certain revenue equipment under capital
leases. The Companys capital leases contain guarantees of
residual values. Certain leases contain renewal or fixed price
purchase options. The leases are collateralized by revenue
equipment with a cost of $3.7 million and
$28.5 million and accumulated amortization of
$2.4 million and $9.9 million at December 31,
2005 and 2004, respectively. The amortization of the equipment
under capital leases is included in depreciation expense.

46



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following is a schedule by years of future minimum lease
payments under capital leases together with the present value of
the net minimum lease payments and long-term debt:

|                                                                                                                                                         |                                                               |                |       |       |  |   |        |        | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | -------------- | ----- | ----- |  | - | ------ | ------ | 
|                                                                                                                                                         |                                                               |               
|                                                                                                                                                         |                                                               | December 31,  
|                                                                                                                                                         |                                                               |               
|                                                                                                                                                         |                                                               | 2005           |       | 2004 
|                                                                                                                                                         |                                                               |                |       |      
|                                                                                                                                                         |                                                               |               
|                                                                                                                                                         |                                                               | (In thousands)
|                                                                                                                                                        
|                                                                                                                                                        
|                                                                                                                                                        
|                                                                                                                                                        
|2005                                                                                                                                                     |                                                               | $              |       |       |  | $ | 15,068 |       
|                                                                                                                                                        
|                                                                                                                                                        
|                                                                                                                                                        
|                                                                                                                                                        
|2006                                                                                                                                                     |                                                               |                | 1,815 |       |  |   | 1,815  |       
|                                                                                                                                                         |                                                               |                |       |       |  |   |        |       
|Total minimum lease payments                                                                                                                             |                                                               |                | 1,815 |       |  |   | 16,883 |       
|                                                                                                                                                        
|                                                                                                                                                        
|                                                                                                                                                        
|                                                                                                                                                        
|Less: Amount representing interest                                                                                                                       |                                                               |                | 29    |       |  |   | 720    |       
|                                                                                                                                                         |                                                               |                |       |       |  |   |        |       
|Present value of minimum lease payments                                                                                                                  |                                                               |                | 1,786 |       |  |   | 16,163 |       
|                                                                                                                                                        
|                                                                                                                                                        
|                                                                                                                                                        
|                                                                                                                                                        
|Notes payable to commercial lending institutions
    with varying payments through the year 2005 with fixed interest
    rates ranging from 2.9% to 3.8% |                                                               |                |       |       |  |   | 829    |       
|                                                                                                                                                         |                                                               |                |       |       |  |   |        |       
|                                                                                                                                                         | Total obligations under capital leases and
    long-term debt |                |       | 1,786 |  |   |        | 16,992 | 
|                                                                                                                                                        
|                                                                                                                                                        
|                                                                                                                                                        
|                                                                                                                                                        
|Less current portion                                                                                                                                     |                                                               |                | 1,786 |       |  |   | 15,205 |       
|                                                                                                                                                         |                                                               |                |       |       |  |   |        |       
|Obligations under capital leases and long-term
    debt, less current portion                                                                            |                                                               | $              |       |       |  | $ | 1,787  |       
|                                                                                                                                                         |                                                               |                |       |       |  |   |        |       

For the years ended December 31, 2005, 2004 and 2003, the
Company capitalized interest related to self-constructed assets
totaling $774,000, $528,000 and $507,000, respectively.



|     |             
|---- | ------------
|(12) | Senior Notes

In June 2003, the Company completed a private placement of
Senior Notes. The notes were issued in two series of
$100 million each with an interest rate of 3.73% for those
notes maturing on June 27, 2008 and 4.33% for those notes
maturing on June 27, 2010 with interest payable on each
semiannually in June and December. The notes contain financial
covenants relating to leverage, fixed charge coverage and
tangible net worth. As of December 31, 2005, the Company
was in compliance with these debt covenants.



|     |                                 
|---- | --------------------------------
|(13) | Derivative Financial Instruments

The Company is a party to swap agreements that are used to
manage exposure to interest rate movement by effectively
changing the variable rate to a fixed rate. Since these
instruments did not qualify for hedge accounting, the changes in
the fair value of the interest rate swap agreements will be
recognized in net earnings until maturities up to March 2009.

For the years ended December 31, 2005, 2004 and 2003, the
Company recognized a gain for the change in fair market value of
the interest rate swap agreements of $3.3 million,
$2.6 million and $2.1 million. The changes in fair
market value of the interest rate swap agreements are recorded
as interest expense.

47



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|     |            
|---- | -----------
|(14) | Commitments

Operating Leases

The Company leases various revenue equipment and terminal
facilities under operating leases. At December 31, 2005,
the future minimum lease payments under noncancelable operating
leases are as follows:

|                             |  |                |        |            |  |       |       |  |  |   |        | 
|---------------------------- |  | -------------- | ------ | ---------- |  | ----- | ----- |  |  | - | ------ | 
|                             |  | Revenue        |        |            |  |      
|Years Ending December 31,    |  | Equipment      |        | Facilities |  | Total
|                             |  |                |        |            |  |      
|                             |  |               
|                             |  | (In thousands)
|                            
|                            
|                            
|                            
|2006                         |  | $              | 38,873 |            |  | $     | 1,545 |  |  | $ | 40,418 | 
|                            
|                            
|                            
|                            
|2007                         |  |                | 29,831 |            |  |       | 601   |  |  |   | 30,432 | 
|                            
|                            
|                            
|                            
|2008                         |  |                | 3,512  |            |  |       | 435   |  |  |   | 3,947  | 
|                            
|                            
|                            
|                            
|2009                         |  |                | 115    |            |  |       | 227   |  |  |   | 342    | 
|                            
|                            
|                            
|                            
|2010                         |  |                |        |            |  |       | 38    |  |  |   | 38     | 
|Thereafter                   |  |                |        |            |  |       |       |  |  |   |        | 
|                             |  |                |        |            |  |       |       |  |  |   |        | 
|Total minimum lease payments |  | $              | 72,331 |            |  | $     | 2,846 |  |  | $ | 75,177 | 
|                             |  |                |        |            |  |       |       |  |  |   |        | 

The revenue equipment leases generally include purchase options
exercisable at the completion of the lease. The Company recorded
net losses of approximately $811,000, $3,378,000 and $247,000
from the sale of leased revenue equipment pursuant to exercise
of purchase options on revenue equipment in 2005, 2004, and
2003, respectively.



| |                     
| | --------------------
| | Purchase Commitments

The Company had commitments outstanding to acquire revenue
equipment for approximately $564 million at
December 31, 2005. These purchases are expected to be
financed by operating leases, debt, proceeds from sales of
existing equipment and cash flows from operations. The Company
has the option to cancel such commitments with 90 days
notice.

In addition, the Company had remaining commitments of
$5.8 million as of December 31, 2005 under contracts
relating to acquisition, development and improvement of
facilities.



| |           
| | ----------
| | Guarantees

The Company guarantees certain residual values under its
operating lease agreements for revenue equipment. At the
termination of these operating leases, the Company would be
responsible for the excess of the guarantee amount above the
fair market value, if any. The maximum potential amount of
future payments the Company would be required to make under
these guarantees is $35 million.



|     |              
|---- | -------------
|(15) | Contingencies

The Company is involved in certain claims and pending litigation
primarily arising in the normal course of business. Based on the
knowledge of the facts and, in certain cases, opinions of
outside counsel, management believes the resolution of claims
and pending litigation will not have a material adverse effect
on the Company.



|     |                     
|---- | --------------------
|(16) | Stockholders Equity

The Company purchased 1,988,181, 14,132,249 and
1,201,000 shares of its common stock for a total cost of
$39.5 million, $252.6 million and $18.9 million
during 2005, 2004 and 2003, respectively. All of the shares
purchased are being held as treasury stock and may be used for
issuances under the Companys employee

48



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

stock option and purchase plans or for other general corporate
purposes. The Company has adopted and implemented a new
repurchase program, under which it may acquire its common stock
using the proceeds received from the exercise of stock options
to minimize the dilution from the exercise of stock options. The
purchases will be made in accordance with SEC rules 10b5-1 and
10b-18, which limit the amount and timing of repurchases and
removes any discretion with respect to purchases on the part of
the Company.



| |                   
| | ------------------
| | Stock Option Plans

The Company has a number of stock options under various plans.
Options granted to employees have been granted with an exercise
price equal to 85 or 100 percent of the market price on the
grant date and expire on the tenth anniversary of the grant
date. The majority of options granted by Swift to employees vest
20 percent per year beginning on the fifth anniversary of
the grant date or vest pro-rata over a nine year period. Options
granted to Swift non-employee directors have been granted with
an exercise price equal to 85 percent or 100 percent
of the market price on the grant date, vest beginning on the
grant date and expire on the sixth anniversary of the grant date.

In September 2005, the Compensation Committee of the
Companys Board of Directors accelerated the vesting of all
outstanding and unvested employee stock options. There were
7.3 million options accelerated of which 3.7 million
options had a strike price in excess of the fair market value of
$18.42 on the acceleration date. The options which were
originally awarded at a discount from market value are now
retroactively subject to new tax regulations regarding deferred
compensation which impose a 20% excise tax to income created by
the exercise of these options after December 31, 2005. The
remaining options that were accelerated allowed, among other
things, the Company to recognize an expense in 2005 which was
significantly less than the compensation expense that would be
recognized beginning in 2006 in accordance with Statement of
Financial Standards No. 123(R). The vesting periods for
stock options held by the non-employee members of the Board of
Directors were not accelerated. The Company recorded a
$12.4 million non-cash expense in September 2005 to account
for the acceleration. To assist employees in addressing the new
deferred compensation rules, the Company allowed employees to
voluntarily amend stock option agreements to change the exercise
date to a future date. Therefore, due to these amendments,
subsequent awards and the non-acceleration of stock options of
non-employee members of the Board of Directors, not all
outstanding options are reflected as exercisable in the chart
below. The compensation cost related to the nonvested awards is
expected to be $1.6 million over the remaining service
periods through 2014.

As of December 31, 2005, the Company is authorized to grant
an additional 5,091,054 million shares.

The fair value of each option grant is estimated on the date of
grant using the Black-Sholes option-pricing model with the
following weighted-average assumptions used for grants in 2003
through 2005:

|                                         |  |      |      |      |  |      |     |   |  |  |     |  
|---------------------------------------- |  | ---- | ---- | ---- |  | ---- | --- | - |  |  | --- | -
|                                         |  | 2005 |      | 2004 |  | 2003
|                                         |  |      |      |      |  |     
|Dividend yield                           |  |      | 0    | %    |  |      | 0   | % |  |  | 0   | %
|                                        
|                                        
|                                        
|                                        
|Expected volatility                      |  |      | 45   | %    |  |      | 45  | % |  |  | 40  | %
|                                        
|                                        
|                                        
|                                        
|Risk free interest rate                  |  |      | 4.47 | %    |  |      | 4.0 | % |  |  | 4.2 | %
|                                        
|                                        
|                                        
|                                        
|Expected lives (days after vesting date) |  |      | 128  |      |  |      | 179 |   |  |  | 172 |  

49



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

A summary of the status of the Companys fixed stock option
plans as of December 31, 2005, 2004 and 2003, and changes
during the years then ended on those dates is presented below:

|                                                                   |                    |        |            |           |  |        |       |           |  |        |            |           |  |   |       |       |  |  |           |           |  |   |       |       | 
|------------------------------------------------------------------ | ------------------ | ------ | ---------- | --------- |  | ------ | ----- | --------- |  | ------ | ---------- | --------- |  | - | ----- | ----- |  |  | --------- | --------- |  | - | ----- | ----- | 
|                                                                   |                    |        |            |           |  |       
|                                                                   |                    | 2005   |            | 2004      |  | 2003  
|                                                                   |                    |        |            |           |  |       
|                                                                   |                    |        |            | Weighted- |  |        |       | Weighted- |  |        |            | Weighted-
|                                                                   |                    |        |            | Average   |  |        |       | Average   |  |        |            | Average  
|                                                                   |                    |        |            | Exercise  |  |        |       | Exercise  |  |        |            | Exercise 
|                                                                   |                    | Shares |            | Price     |  | Shares |       | Price     |  | Shares |            | Price    
|                                                                   |                    |        |            |           |  |        |       |           |  |        |            |          
|Outstanding at beginning of year                                   |                    |        | 8,942,348  |           |  | $      | 15.57 |           |  |        | 8,298,723  |           |  | $ | 14.50 |       |  |  | 6,944,487 |           |  | $ | 12.41 |      
|Granted                                                            |                    |        |            |           |  |        |       |           |  |        |            |           |  |   |       |       |  |  |           |           |  |   |       |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | At market value    |        |            | 1,929,995 |  |        | $     | 22.24     |  |        |            | 2,008,537 |  |   | $     | 18.17 |  |  |           |           |  |   |       |       | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Below market value |        |            |           |  |        |       |           |  |        |            | 481,785   |  |   | $     | 13.84 |  |  |           | 2,527,000 |  |   | $     | 18.42 | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Exercised                                                          |                    |        | (3,433,909 | )         |  | $      | 14.12 |           |  |        | (785,339   | )         |  | $ | 11.72 |       |  |  | (840,857  | )         |  | $ | 9.85  |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Forfeited                                                          |                    |        | (971,036   | )         |  | $      | 17.61 |           |  |        | (1,061,358 | )         |  | $ | 14.34 |       |  |  | (331,907  | )         |  | $ | 12.48 |      
|                                                                   |                    |        |            |           |  |        |       |           |  |        |            |           |  |   |       |       |  |  |           |           |  |   |       |      
|Outstanding at end of year                                         |                    |        | 6,467,398  |           |  | $      | 18.05 |           |  |        | 8,942,348  |           |  | $ | 15.57 |       |  |  | 8,298,723 |           |  | $ | 14.50 |      
|                                                                   |                    |        |            |           |  |        |       |           |  |        |            |           |  |   |       |       |  |  |           |           |  |   |       |      
|Options exercisable at year-end                                    |                    |        | 5,561,360  |           |  |        |       |           |  |        | 1,504,780  |           |  |   |       |       |  |  | 1,238,305 |           |  |   |       |      
|Weighted-average fair value of options granted
    during the year |                    |        |            |           |  |        |       |           |  |        |            |           |  |   |       |       |  |  |           |           |  |   |       |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | At market value    |        | $          | 12.49     |  |        |       |           |  |        | $          | 9.84      |  |   |       |       |  |  | $         |           |  |   |       |       | 
|                                                                   |                    |        |            |           |  |        |       |           |  |        |            |           |  |   |       |       |  |  |           |           |  |   |       |      
|                                                                   | Below market value |        | $          |           |  |        |       |           |  |        | $          | 10.13     |  |   |       |       |  |  | $         | 12.97     |  |   |       |       | 
|                                                                   |                    |        |            |           |  |        |       |           |  |        |            |           |  |   |       |       |  |  |           |           |  |   |       |      

The following table summarizes information about fixed stock
options outstanding at December 31, 2005:

|                         |  |                     |           |                     |  |           |      |             |  |           |       |  |  |  |           |  |  |   |       | 
|------------------------ |  | ------------------- | --------- | ------------------- |  | --------- | ---- | ----------- |  | --------- | ----- |  |  |  | --------- |  |  | - | ----- | 
|                         |  |                     |           |                    
|                         |  | Options Outstanding |           | Options Exercisable
|                         |  |                     |           |                    
|                         |  |                     |           | Weighted-           |  |           |      |            
|                         |  |                     |           | Average             |  | Weighted- |      |             |  | Weighted-
|                         |  |                     |           | Remaining           |  | Average   |      |             |  | Average  
|                         |  | Number              |           | Contractual         |  | Exercise  |      | Number      |  | Exercise 
|Range of Exercise Prices |  | Outstanding         |           | Life                |  | Price     |      | Exercisable |  | Price    
|                         |  |                     |           |                     |  |           |      |             |  |          
|$5.61 to $16.26          |  |                     | 1,303,118 |                     |  |           | 1.84 |             |  | $         | 11.92 |  |  |  | 1,097,268 |  |  | $ | 11.79 | 
|                        
|                        
|                        
|                        
|$16.37 to $17.65         |  |                     | 1,325,599 |                     |  |           | 6.11 |             |  | $         | 17.41 |  |  |  | 1,220,599 |  |  | $ | 17.43 | 
|                        
|                        
|                        
|                        
|$18.36                   |  |                     | 25,000    |                     |  |           | 4.16 |             |  | $         | 18.36 |  |  |  | 25,000    |  |  | $ | 18.36 | 
|                        
|                        
|                        
|                        
|$18.54                   |  |                     | 1,350,131 |                     |  |           | 3.20 |             |  | $         | 18.54 |  |  |  | 916,143   |  |  | $ | 18.54 | 
|                        
|                        
|                        
|                        
|$18.67 to $24.97         |  |                     | 2,463,550 |                     |  |           | 8.51 |             |  | $         | 21.38 |  |  |  | 2,302,350 |  |  | $ | 21.25 | 
|                         |  |                     |           |                     |  |           |      |             |  |           |       |  |  |  |           |  |  |   |       | 
|                         |  |                     | 6,467,398 |                     |  |           | 5.55 |             |  | $         | 18.05 |  |  |  | 5,561,360 |  |  | $ | 18.09 | 
|                         |  |                     |           |                     |  |           |      |             |  |           |       |  |  |  |           |  |  |   |       | 



| |                             
| | ----------------------------
| | Employee Stock Purchase Plan

Under the Employee Stock Purchase Plan, the Company is
authorized to issue up to 6.5 million shares of common
stock to full-time employees, nearly all of whom are eligible to
participate. Under the terms of the Plan, employees can choose
each year to have up to 15 percent of their annual base
earnings withheld to purchase the Companys common stock.
The purchase price of the stock is 85 percent of the lower
of the beginning-of-period or end-of-period (each period being
the first and second six calendar months) market price. Each
employee is restricted to purchasing during each period a
maximum of $12,500 of stock determined by using the
beginning-of-period price. Under the Plan, the Company issued
297,044, 360,360 and 356,646 shares to 2,100, 2,349 and
2,627 employees in 2005, 2004 and 2003, respectively.
Compensation cost

50



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

is calculated as the fair value of the employees purchase
rights, which was estimated using the Black-Scholes model with
the following assumptions:

|                        |  |      |       |      |  |      |       |  |  |  |     | 
|----------------------- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | --- | 
|                        |  | 2005 |       | 2004 |  | 2003
|                        |  |      |       |      |  |     
|Dividend yield          |  |      | 0%    |      |  |      | 0%    |  |  |  | 0%  | 
|                       
|                       
|                       
|                       
|Expected volatility     |  |      | 45%   |      |  |      | 45%   |  |  |  | 40% | 
|                       
|                       
|                       
|                       
|Risk free interest rate |  |      | 2.50% |      |  |      | 2.55% |  |  |  | 1%  | 

The weighted-average fair value of those purchase rights granted
in 2005, 2004 and 2003 was $6.24, $5.42 and $5.12, respectively.



|     |             
|---- | ------------
|(17) | Income Taxes

Income tax expense consists of:

|                            |         |                          |        |        |  |      |        |        |   |   |        |        | 
|--------------------------- | ------- | ------------------------ | ------ | ------ |  | ---- | ------ | ------ | - | - | ------ | ------ | 
|                            |         |                         
|                            |         | Years Ended December 31,
|                            |         |                         
|                            |         | 2005                     |        | 2004   |  | 2003
|                            |         |                          |        |        |  |     
|                            |         |                         
|                            |         | (In thousands)          
|                           
|                           
|                           
|                           
|Current expense:            |         |                          |        |        |  |      |        |        |   |   |        |       
|                           
|                           
|                           
|                           
|                            | Federal |                          | $      | 53,935 |  |      | $      | 32,720 |   |   | $      | 16,279 | 
|                           
|                           
|                           
|                           
|                            | State   |                          |        | 5,129  |  |      |        | 2,192  |   |   |        | 1,395  | 
|                           
|                           
|                           
|                           
|                            | Foreign |                          |        | 457    |  |      |        |        |   |   |        | 371    | 
|                            |         |                          |        |        |  |      |        |        |   |   |        |       
|                            |         |                          | 59,521 |        |  |      | 34,912 |        |   |   | 18,045 |       
|                            |         |                          |        |        |  |      |        |        |   |   |        |       
|Deferred expense (benefit): |         |                          |        |        |  |      |        |        |   |   |        |       
|                           
|                           
|                           
|                           
|                            | Federal |                          |        | 2,027  |  |      |        | 24,086 |   |   |        | 28,153 | 
|                           
|                           
|                           
|                           
|                            | State   |                          |        | 1,012  |  |      |        | (4,562 | ) |   |        | 2,413  | 
|                           
|                           
|                           
|                           
|                            | Foreign |                          |        | 663    |  |      |        | 2,031  |   |   |        |        | 
|                            |         |                          |        |        |  |      |        |        |   |   |        |       
|                            |         |                          | 3,702  |        |  |      | 21,555 |        |   |   | 30,566 |       
|                            |         |                          |        |        |  |      |        |        |   |   |        |       
|                            |         | $                        | 63,223 |        |  | $    | 56,467 |        |   | $ | 48,611 |       
|                            |         |                          |        |        |  |      |        |        |   |   |        |       

The Companys effective tax rate was 38%, 35%, and 38% in
2005, 2004 and 2003, respectively. The actual tax expense
differs from the expected tax expense (computed by
applying the U.S. Federal corporate income tax rate of 35%
to earnings before income taxes) as follows:

|                                                        |                                                           |                          |        |        |   |      |        |        |   |   |        |       | 
|------------------------------------------------------- | --------------------------------------------------------- | ------------------------ | ------ | ------ | - | ---- | ------ | ------ | - | - | ------ | ----- | 
|                                                        |                                                           |                         
|                                                        |                                                           | Years Ended December 31,
|                                                        |                                                           |                         
|                                                        |                                                           | 2005                     |        | 2004   |   | 2003
|                                                        |                                                           |                          |        |        |   |     
|                                                        |                                                           |                         
|                                                        |                                                           | (In thousands)          
|                                                       
|                                                       
|                                                       
|                                                       
|Computed expected tax expense                         |                                                           | $                        | 57,522 |        |   | $    | 55,982 |        |   | $ | 44,794 |      
|                                                       
|                                                       
|                                                       
|                                                       
|Increase (decrease) in income taxes resulting
    from: |                                                           |                          |        |        |   |      |        |        |   |   |        |      
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | State income taxes, net of federal income tax
    benefit |                          |        | 3,992  |   |      |        | 3,209  |   |   |        | 2,496 | 
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Per diem allowances                                       |                          |        | 2,793  |   |      |        | 1,676  |   |   |        |       | 
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | State tax rate change in deferred items                   |                          |        |        |   |      |        | (4,614 | ) |   |        |       | 
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Other, net of tax credits                                 |                          |        | (1,084 | ) |      |        | 214    |   |   |        | 1,321 | 
|                                                        |                                                           |                          |        |        |   |      |        |        |   |   |        |      
|                                                        |                                                           | $                        | 63,223 |        |   | $    | 56,467 |        |   | $ | 48,611 |      
|                                                        |                                                           |                          |        |        |   |      |        |        |   |   |        |      

51



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The net effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities are presented below:

|                          |                                                                            |                                |   |          |          |   |   |          |          |  
|------------------------- | -------------------------------------------------------------------------- | ------------------------------ | - | -------- | -------- | - | - | -------- | -------- | -
|                          |                                                                            |                               
|                          |                                                                            | December 31,                  
|                          |                                                                            |                               
|                          |                                                                            | 2005                           |   | 2004    
|                          |                                                                            |                                |   |         
|                          |                                                                            |                               
|                          |                                                                            | (In thousands)                
|                         
|                         
|                         
|                         
|Deferred tax assets:      |                                                                            |                                |   |          |          |   |   |         
|                         
|                         
|                         
|                         
|                          | Claims accruals                                                            |                                | $ | 94,609   |          |   | $ | 74,664   |         
|                         
|                         
|                         
|                         
|                          | Allowance for doubtful accounts                                            |                                |   | 4,007    |          |   |   | 4,852    |         
|                         
|                         
|                         
|                         
|                          | Accrued liabilities                                                        |                                |   | 1,485    |          |   |   | 3,314    |         
|                         
|                         
|                         
|                         
|                          | Derivative financial instruments                                           |                                |   | 723      |          |   |   | 1,962    |         
|                         
|                         
|                         
|                         
|                          | Equity investments                                                         |                                |   | 4,580    |          |   |   | 2,466    |         
|                         
|                         
|                         
|                         
|                          | Amortization of discount on stock options                                  |                                |   | 3,363    |          |   |   | 2,521    |         
|                         
|                         
|                         
|                         
|                          | Other                                                                      |                                |   | 3,595    |          |   |   | 1,914    |         
|                          |                                                                            |                                |   |          |          |   |   |         
|                          |                                                                            | Total deferred tax assets      |   |          | 112,362  |   |   |          | 91,693   |  
|                          |                                                                            |                                |   |          |          |   |   |         
|Deferred tax liabilities: |                                                                            |                                |   |          |          |   |   |         
|                         
|                         
|                         
|                         
|                          | Property and equipment, principally due to
    differences in depreciation |                                |   | (354,166 | )        |   |   | (329,035 | )       
|                         
|                         
|                         
|                         
|                          | Prepaid taxes, licenses and permits deducted for
    tax purposes          |                                |   | (14,124  | )        |   |   | (8,513   | )       
|                         
|                         
|                         
|                         
|                          | Contractual commitments deducted for tax purposes                          |                                |   | (10,522  | )        |   |   | (16,159  | )       
|                         
|                         
|                         
|                         
|                          | Other                                                                      |                                |   | (10,624  | )        |   |   | (11,358  | )       
|                          |                                                                            |                                |   |          |          |   |   |         
|                          |                                                                            | Total deferred tax liabilities |   |          | (389,436 | ) |   |          | (365,065 | )
|                          |                                                                            |                                |   |          |          |   |   |         
|                          |                                                                            | Net deferred tax liability     |   | $        | (277,074 | ) |   | $        | (273,372 | )
|                          |                                                                            |                                |   |          |          |   |   |         

These amounts are presented in the accompanying consolidated
balance sheets as follows:

|                                  |  |                |          |      |  |   |          |  
|--------------------------------- |  | -------------- | -------- | ---- |  | - | -------- | -
|                                  |  |               
|                                  |  | December 31,  
|                                  |  |               
|                                  |  | 2005           |          | 2004
|                                  |  |                |          |     
|                                  |  |               
|                                  |  | (In thousands)
|                                 
|                                 
|                                 
|                                 
|Current deferred tax asset        |  | $              | 22,319   |      |  | $ | 12,839   |  
|                                 
|                                 
|                                 
|                                 
|Noncurrent deferred tax liability |  |                | (299,393 | )    |  |   | (286,211 | )
|                                  |  |                |          |      |  |   |          |  
|Net deferred tax liability        |  | $              | (277,074 | )    |  | $ | (273,372 | )
|                                  |  |                |          |      |  |   |          |  

U.S. income and foreign withholding taxes have not been
provided on approximately $38 million of cumulative
undistributed earnings of foreign subsidiaries. The earnings are
considered to be permanently reinvested outside the U.S..
Because the Company intends to reinvest these earnings
indefinitely outside the U.S., it is not required to provide
U.S. income taxes on them until they are repatriated in the
form of dividends or otherwise.

52



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SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|     |                   
|---- | ------------------
|(18) | Earnings Per Share

The computation of basic and diluted earnings per share is as
follows:

|                                                              |  |                          |         |      |  |      |         |  |  |   |        | 
|------------------------------------------------------------- |  | ------------------------ | ------- | ---- |  | ---- | ------- |  |  | - | ------ | 
|                                                              |  |                         
|                                                              |  | Year Ending December 31,
|                                                              |  |                         
|                                                              |  | 2005                     |         | 2004 |  | 2003
|                                                              |  |                          |         |      |  |     
|                                                              |  |                         
|                                                              |  | (In thousands, except   
|                                                              |  | per share amounts)      
|                                                             
|                                                             
|                                                             
|                                                             
|Net earnings                                                  |  | $                        | 101,127 |      |  | $    | 103,482 |  |  | $ | 79,371 | 
|                                                              |  |                          |         |      |  |      |         |  |  |   |        | 
|Weighted average shares:                                      |  |                          |         |      |  |      |         |  |  |   |        | 
|                                                             
|                                                             
|                                                             
|                                                             
|Common shares outstanding for basic earnings per
    share    |  |                          | 72,540  |      |  |      | 79,306  |  |  |   | 83,474 | 
|                                                             
|                                                             
|                                                             
|                                                             
|Equivalent shares issuable upon exercise of stock
    options |  |                          | 1,283   |      |  |      | 870     |  |  |   | 1,253  | 
|                                                              |  |                          |         |      |  |      |         |  |  |   |        | 
|Diluted shares                                                |  |                          | 73,823  |      |  |      | 80,176  |  |  |   | 84,727 | 
|                                                              |  |                          |         |      |  |      |         |  |  |   |        | 
|Basic earnings per share                                      |  | $                        | 1.39    |      |  | $    | 1.30    |  |  | $ | .95    | 
|                                                              |  |                          |         |      |  |      |         |  |  |   |        | 
|Diluted earnings per share                                    |  | $                        | 1.37    |      |  | $    | 1.29    |  |  | $ | .94    | 
|                                                              |  |                          |         |      |  |      |         |  |  |   |        | 

Equivalent shares issuable upon exercise of stock options
exclude 1,310,000, 3,979,000 and 1,452,000 shares in 2005,
2004 and 2003, respectively, as the effect was antidilutive.



|     |                                     
|---- | ------------------------------------
|(19) | Accumulated Other Comprehensive Loss

In conjunction with the June 2003 private placement of Senior
Notes, the Company entered into a cash flow hedge to lock the
benchmark interest rate used to set the coupon rate for
$50 million of the notes. The Company terminated the hedge
when the coupon rate was set and paid $1.1 million, which
is recorded as accumulated other comprehensive loss in
stockholders equity. This amount will be amortized as a
yield adjustment of the interest rate on the seven-year series
of notes. The Company amortized $152,000, $145,000 and $70,000
into interest expense during the years ended December 31,
2005, 2004 and 2003, respectively.



|     |                         
|---- | ------------------------
|(20) | Settlement of Litigation

In June 2002, the Company entered into a settlement agreement
with an insurance company. Pursuant to this settlement, the
insurance company agreed to provide certain insurance coverage,
at no cost to the Company, through December 2004 in exchange for
the Company releasing all claims that were the subject of the
litigation. The Company recognized this settlement amount as a
reduction of insurance expense as the insurance coverage was
provided during the period from July 1, 2002 through
December 31, 2004. In addition, the Company deferred
$21.1 million of legal expenses, which were paid pursuant
to a contingent fee arrangement based upon the Companys
estimated valuation of the insurance provided of between
$65 million and $74 million. In the event that the
Company did not receive the future insurance coverage due to the
liquidation, rehabilitation, bankruptcy or other similar
insolvency of the insurers, the Company would have received a
reimbursement of its legal expenses on a declining basis ranging
from $15.8 million through December 15, 2002 to
$3.9 million through July 1, 2004. These legal
expenses were amortized on a straight-line basis over the
thirty-month period beginning July 1, 2002 through
December 31, 2004.



|     |                       
|---- | ----------------------
|(21) | Employee Benefit Plans

The Company maintains a 401(k) profit sharing plan for all
employees who are 19 years of age or older and have
completed six months of service. The Plan provides for a
mandatory matching contribution equal to the amount of the
employees salary reduction, but not to exceed 1% of the
employees compensation. Also, the plan provides for a
discretionary contribution not to exceed 4% of the
employees compensation, limited to the amount permitted
under the Internal Revenue Code as deductible expenses. The
Company may also make

53



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

voluntary profit sharing contributions. Beginning in 2006, the
Company will match up to 3% of an employees compensation.
Employees rights to employer contributions vest after five
years from their date of employment. The Companys expense
totaled approximately $10.7 million, $8.1 million and
$8.2 million for 2005, 2004 and 2003, respectively.



|     |             
|---- | ------------
|(22) | Key Customer

Services provided to the Companys largest customer, Wal
Mart, generated 15%, 15% and 12% of operating revenue in 2005,
2004 and 2003, respectively. No other customer accounted for 10%
or more of operating revenue in any reporting period.



|     |                           
|---- | --------------------------
|(23) | Related Party Transactions

On April 1, 2005, Robert W. Cunningham, current Chief
Executive Officer sold his business, Cunningham Commercial
Vehicles, a Freightliner dealership to an unrelated third party
and retains no continuing interest. Prior to the sale of
Cunningham Commercial Vehicles, Swift purchased tractors, parts
and services from this business totaling $20 million,
$25 million and $84 million in 2005, 2004 and 2003,
respectively. At December 31, 2005 Swift owed nothing for
these purchases and at December 31, 2004, Swift owed
$347,000. Mr. Cunningham also owned 50% of Nexuse
Manufacturing, from whom Swift purchased a truck repair facility
(and accompanying parts and equipment) in July 2004. The
facility was purchased for $800,000 and the parts and equipment
purchase totaled $10,825. There were no transactions between
Swift and Nexuse Manufacturing in 2005. Mr. Cunningham is
no longer a part owner of Nexuse.

Swift obtains drivers for the owner-operator portion of its
fleet by entering into contractual arrangements either with
individual owner-operators or with fleet operators. Fleet
operators maintain a fleet of tractors and directly negotiate
with a pool of owner-operators and employees whose services the
fleet operator then offers to Swift. One of the largest fleet
operators with whom Swift does business is Interstate Equipment
Leasing, Inc. (IEL), a corporation wholly-owned by
Jerry Moyes, a member of Swifts Board of Directors. Swift
pays the same or comparable rate per mile for purchased
transportation services to IEL that it pays to independent
owner-operators and other fleet operators. During 2005, 2004 and
2003, Swift paid $25.5 million, $13.1 million and
$17.3 million to IEL for purchased transportation services.
Swift owed $444,000 and $536,000 for these purchased
transportation services at December 31, 2005 and 2004,
respectively.

Swift also purchases new tractors and sells them to IEL at a
mark-up over Swifts cost. Both the purchase price of the
tractors and Swifts margin are prepaid by IEL before Swift
acquires the tractors. IEL then leases the tractors to its pool
of owner-operators and employees, including owner-operators that
haul loads for Swift. Swift believes this arrangement allows it
to obtain ready access to IELs pool of owner-operators
while avoiding the carrying and overhead costs associated with
owning the tractors and leasing them to owner-operators. In
2005, 2004 and 2003, Swift acquired new tractors and sold them
to IEL for $1.4 million, $17.2 million and
$54.0 million, respectively and recognized fee income of
$54,000, $600,000 and $1.9 million respectively.

In addition, in prior years Swift sold used tractors to IEL,
however, there were no used equipment sales to IEL in 2005.
During 2004 and 2003 Swift sold used revenue equipment totaling
$89,500 and $319,000 respectively, and recognized a gain of
$41,000 and $23,000 in 2004 and 2003. At December 31, 2005
and 2004 nothing was owed to Swift for this equipment. Swift
also provides drivers and trainees to IEL to operate IEL trucks
on Swift loads. In 2005, 2004 and 2003, respectively, Swift
received $5.2 million, $2.7 million and
$4.9 million from IEL for wages and benefits of drivers and
trainees provided to IEL for this purpose. At December 31,
2005 and 2004, Swift was owed $513,000 and $198,000,
respectively for these services. Swift paid IEL $118,000,
$104,000 and $135,000 during 2005, 2004 and 2003, respectively,
for various other services (including driver security deposits
transferred from MS Carriers to IEL upon drivers obtaining new
leases and

54



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SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

reimbursement to IEL for Prepass usage by their drivers on Swift
loads). Also in 2005, Swift purchased two tractors from IEL,
totaling $88,000. There were no purchases of tractors from IEL
in 2004 or 2003.

Swift Aviation Services, Inc. and Swift Air, Inc. corporations
wholly-owned by Jerry Moyes, provide air transportation services
to Swift. These services totaled $587,000, $395,000, and
$577,000 for the years ended December 31, 2005, 2004, and
2003, respectively. Swift owed nothing for these services at
December 31, 2005 and 2004.

Swift provides transportation, repair, facilities leases and
other services to several trucking companies affiliated with
Jerry Moyes as follows:

Two trucking companies affiliated with Jerry Moyes hire Swift
for truckload hauls for their customers: Central Freight Lines,
Inc. (Central Freight), a publicly traded less-than truckload
carrier and Central Refrigerated Service, Inc. (Central
Refrigerated), a privately held refrigerated truckload carrier.
Jerry Moyes previously owned an approximately 40% interest in
Central Freight and served as its Chairman, and Central
Freights board recently approved a buyout of the company
by Mr. Moyes. Mr. Moyes is the principal stockholder
of Central Refrigerated. Swift also provides repair, facilities
leases and other truck stop services to Central Freight and
Central Refrigerated. Swift recognized $15.7 million,
$14.8 million, and $22.6 million in operating revenue
in 2005, 2004 and 2003, respectively for these services to
Central Freight and Central Refrigerated. At December 31,
2005 and 2004, $543,000 and $1 million, respectively, was
owed to Swift for these services.

Swift also provides freight services for two additional
companies affiliated with Jerry Moyes  SME Industries
and Aloe Splash/ Aloe Splash DIP with total operating revenues
of $132,000, $336,000 and $247,000 recognized for years ended
December 31, 2005, 2004 and 2003, respectively. At
December 31, 2005 and 2004, $24,000 and $115,000,
respectively, was owed to Swift for these services.

The rates that Swift charges each of these companies for
transportation services, in the case of truckload hauls, are
market rates comparable to what it charges its regular
customers, thus providing Swift with an additional source of
operating revenue at its normal freight rates. The rates charged
for repair and other truck stop services are comparable to what
Swift charges its owner operators, which is at a mark up over
Swifts cost. In addition, Swift leases facilities from
Central Freight and paid $240,000, $422,000 and $612,000 to this
carrier for facilities rented in 2005, 2004 and 2003,
respectively.

The Company purchased $499,000, $284,000 and $2.4 million
of refrigeration units and parts in 2005, 2004 and 2003,
respectively, from Thermo King West, a Thermo King dealership
owned by William F. Riley III, an executive officer of
Swift until July 2005, who is also the father of Jeff Riley, a
current executive officer of Swift. Thermo King Corporation, a
unit of Ingersoll-Rand Company Limited, requires that all
purchases of refrigeration units be made through one of its
dealers. Thermo King West is the exclusive dealer in the
southwest. Pricing terms are negotiated directly with Thermo
King Corporation, with additional discounts negotiated between
Swift and Thermo King West once pricing terms are fixed with
Thermo King Corporation. Thermo King Corporation is one of only
two companies that supplies refrigeration units that are
suitable for Swifts needs. In addition, to Thermo King
West, Bill Riley owns Trucks West, operating franchised service
and parts facilities for Volvo tractors. Swift purchased
$706,000, $13,000 and $60,000 in parts and services from Trucks
West in 2005, 2004 and 2003, respectively.

Swift obtained legal services from Scudder Law Firm. Earl
Scudder, a director of Swift until June 30, 2005, is a
member of Scudder Law Firm. The rates charged to Swift for legal
services reflect market rates charged by unrelated law firms for
comparable services. Through June 30, 2005, and all of 2004
and 2003 Swift incurred fees for legal services from Scudder Law
Firm in the amount of $14,000, $217,000 and $341,000,
respectively.

55



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

All of the above related party arrangements were approved by the
independent members of Swifts Board of Directors.



|     |                                    
|---- | -----------------------------------
|(24) | Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 107,
Disclosures about Fair Value of Financial
Instruments, requires that the Company disclose estimated
fair values for its financial instruments. Fair value estimates
are made at a specific point in time and are based on relevant
market information and information about the financial
instrument. These estimates do not reflect any premium or
discount that could result from offering for sale at one time
the Companys entire holdings of a particular financial
instrument. Changes in assumptions could significantly affect
these estimates. Since the fair value is estimated as of
December 31, 2005, the amounts that will actually be
realized or paid at settlement or maturity of the instruments
could be significantly different.

The following summary presents a description of the
methodologies and assumptions used to determine such amounts.



| |                                
| | -------------------------------
| | Accounts Receivable and Payable

Fair value is considered to be equal to the carrying value of
the accounts receivable, accounts payable and accrued
liabilities, as they are generally short-term in nature and the
related amounts approximate fair value or are receivable or
payable on demand.



| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | Long-Term Debt, Obligations Under Capital Leases,
    Borrowings Under Revolving Credit Agreement and Accounts
    Receivable Securitization

The fair value of all of these instruments is assumed to
approximate their respective carrying values given the duration
of the notes, their interest rates and underlying collateral.



| |             
| | ------------
| | Senior Notes

The fair value of the Senior Notes, measured as the present
value of the future cash flows using the current borrowing rate
for comparable maturity notes, is estimated to be
$194.3 million as of December 31, 2005.



|     |                                                 
|---- | ------------------------------------------------
|(25) | Acquisition of Merit Distribution Services, Inc.

On July 1, 2003, the Company completed the acquisition of
certain assets of Merit Distribution Services, Inc.
Merits fleet consisted of 825 tractors, including 140
owner-operators, and 1,400 trailers of which 455 tractors and
1,100 trailers were leased. Merits primary business
consists of a series of dedicated regional trucking fleets that
serve Wal-Marts grocery distribution centers and retail
outlets. This acquisition enhanced our relationship with
Wal-Mart, our largest customer. The results of Merits
operations have been included in the consolidated financial
statements since July 1, 2003.

56



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SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table summarizes the estimated fair values of the
assets acquired and liabilities assumed at the date of
acquisition (in thousands):

|                                       |  |   |        |  
|-------------------------------------- |  | - | ------ | -
|                                      
|                                      
|                                      
|                                      
|Customer relationship intangible asset |  | $ | 40,726 |  
|                                      
|                                      
|                                      
|                                      
|Goodwill                               |  |   | 16,333 |  
|                                      
|                                      
|                                      
|                                      
|Revenue equipment                      |  |   | 27,050 |  
|                                      
|                                      
|                                      
|                                      
|Other assets                           |  |   | 1,601  |  
|                                      
|                                      
|                                      
|                                      
|Liabilities assumed                    |  |   | (4,120 | )
|                                       |  |   |        |  
|Cash paid                              |  | $ | 81,590 |  
|                                       |  |   |        |  

The value assigned to the customer relationship intangible asset
was determined by performing a valuation analysis using
historical financial and non-financial information obtained
about Merit. Since we cannot reliably determine the pattern in
which economic benefits of the customer relationship intangible
are consumed, the asset is being amortized on a straight-line
basis over a 15-year period. All of the goodwill will be
deductible for tax purposes.

Information related to the customer relationship intangible
asset is as follows:

|                                        |                          |                    |        |        |   |   |        |        |  
|--------------------------------------- | ------------------------ | ------------------ | ------ | ------ | - | - | ------ | ------ | -
|                                        |                          |                   
|                                        |                          | As of December 31,
|                                        |                          |                   
|                                        |                          | 2005               |        | 2004  
|                                        |                          |                    |        |       
|                                        |                          |                   
|                                        |                          | (In thousands)    
|                                       
|                                       
|                                       
|                                       
|Customer relationship intangible asset: |                          |                    |        |        |   |   |        |       
|                                       
|                                       
|                                       
|                                       
|                                        | Gross carrying amount    |                    | $      | 45,726 |   |   | $      | 45,726 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Accumulated amortization |                    |        | (7,454 | ) |   |        | (4,406 | )
|                                        |                          |                    |        |        |   |   |        |       
|                                        |                          | $                  | 38,272 |        |   | $ | 41,320 |       
|                                        |                          |                    |        |        |   |   |        |       

The aggregate amortization expense related to customer
relationship intangible asset was $3.0 million,
$3.2 million and $1.1 million for the years ended
December 31, 2005, 2004 and 2003, respectively. The
estimated amortization expense for each of the next five years
is approximately $3 million.

The results of operations for the year ended December 31,
2003 as though the Merit acquisition had been completed as of
the beginning of the year is as follows:

|                           |  |                    |           | 
|-------------------------- |  | ------------------ | --------- | 
|                           |  | Year Ended        
|                           |  | December 31, 2003 
|                           |  |                   
|                           |  | (In thousands,    
|                           |  | except share data)
|                          
|                          
|                          
|                          
|Operating revenue          |  | $                  | 2,471,000 | 
|                          
|                          
|                          
|                          
|Net earnings               |  | $                  | 82,954    | 
|                          
|                          
|                          
|                          
|Diluted earnings per share |  | $                  | .98       | 



|     |                                            
|---- | -------------------------------------------
|(26) | Acquisition of Trans-Mex, Inc. S.A. DE C.V.

In January 2004 we completed the acquisition of an additional
51% interest in Trans-Mex, Inc. S.A. de C.V. We now own 100% of
this Mexican truckload carrier. The purchase price for this 51%
interest was $31 million consisting of $10.8 million
in cash and 942,155 shares of Swift common stock. Trans-Mex
is one of the top five international trucking companies
operating in Mexico. Through this acquisition, we became the
only United States trucking company with a 100% ownership
interest in a Mexican carrier. The results of Trans-Mex
operations have been included in our consolidated financial
statements since January 1, 2004.

Trans-Mex was formed in 1990 and we held a 49% interest,
accounted for under the equity method, at formation. Included in
the formation documents was the pricing formula (EBITDA based)
for our option to

57



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SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

purchase the remaining 51%. Since we were purchasing a cash flow
stream and there was no significant adjustment of the existing
Trans-Mex assets to fair value, a significant amount of goodwill
was recorded.

The basis for determining the value assigned to the common stock
issued in connection with the acquisition was the average of the
closing price of our stock for the five days preceding the
closing date as outlined in the purchase agreement. The variance
between this price and the closing price on the acquisition date
was immaterial.

The following table summarizes the estimated fair values of the
assets acquired and liabilities assumed at the date of
acquisition (in thousands):

|                    |  |   |        |  
|------------------- |  | - | ------ | -
|                   
|                   
|                   
|                   
|Goodwill            |  | $ | 30,955 |  
|                   
|                   
|                   
|                   
|Revenue equipment   |  |   | 7,093  |  
|                   
|                   
|                   
|                   
|Other assets        |  |   | 2,433  |  
|                   
|                   
|                   
|                   
|Liabilities assumed |  |   | (9,319 | )
|                    |  |   |        |  
|Purchase price      |  | $ | 31,162 |  
|                    |  |   |        |  

Management believes the goodwill will not be deductible for tax
purposes.

The results of operations for 2004 and 2003 as though the
Trans-Mex acquisition had been completed as of the beginning of
each respective period are as follows:

|                           |  |                         |           |      |  |   |           | 
|-------------------------- |  | ----------------------- | --------- | ---- |  | - | --------- | 
|                           |  |                        
|                           |  | Year Ended December 31,
|                           |  |                        
|                           |  | 2004                    |           | 2003
|                           |  |                         |           |     
|                           |  |                        
|                           |  | (In thousands,         
|                           |  | except share data)     
|                          
|                          
|                          
|                          
|Revenue                    |  | $                       | 2,826,201 |      |  | $ | 2,408,951 | 
|                          
|                          
|                          
|                          
|Net earnings               |  | $                       | 103,514   |      |  | $ | 80,046    | 
|                          
|                          
|                          
|                          
|Diluted earnings per share |  | $                       | 1.29      |      |  | $ | 0.95      | 



|     |                                     
|---- | ------------------------------------
|(27) | Sale of Autohaul Assets and Business

In April 2005, we completed the sale of our autohaul assets and
business for approximately $46.1 million, $25 million
of which was paid in cash at closing, $3.5 million was paid
on July 15, 2005, $0.6 million was paid on
January 15, 2006, and $17 million is payable to Swift
in the form of a note due over a six year period ending April
2011. As part of this transaction, Swift provided certain
bookkeeping and other related services to the buyer on a
transitional basis through December 2005. Swift will continue to
provide certain information technology support through April
2006.

Based on an evaluation in accordance with Statement of Financial
Accounting Standards No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, we estimated
that the transaction would result in a non-cash charge for
impairment to the book value of certain of the assets to be sold
of approximately $4.0 million on a pre-tax basis. This
non-cash charge was recognized under generally accepted
accounting principles in the fourth quarter of 2004 and recorded
in depreciation, amortization and impairment expense.

58



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SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|     |                                            
|---- | -------------------------------------------
|(28) | Quarterly Results of Operations (Unaudited)

|                             |  |                                   |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|---------------------------- |  | --------------------------------- | ------- | ------- |  | ------- | ------- | ------- |  | - | ------- |  |  | - | ------- | 
|                             |  | First                             |         | Second  |  | Third   |         | Fourth 
|                             |  | Quarter                           |         | Quarter |  | Quarter |         | Quarter
|                             |  |                                   |         |         |  |         |         |        
|                             |  |                                  
|                             |  | (In thousands, except share data)
|                            
|                            
|                            
|                            
|Year Ended December 31, 2005 |  |                                   |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|                            
|                            
|                            
|                            
|Operating revenue            |  | $                                 | 742,618 |         |  | $       | 798,255 |         |  | $ | 812,934 |  |  | $ | 843,648 | 
|                            
|                            
|                            
|                            
|Operating income             |  |                                   | 31,533  |         |  |         | 56,521  |         |  |   | 28,087  |  |  |   | 71,919  | 
|                            
|                            
|                            
|                            
|Net earnings                 |  |                                   | 19,447  |         |  |         | 29,781  |         |  |   | 12,632  |  |  |   | 39,267  | 
|                            
|                            
|                            
|                            
|Basic earnings per share     |  |                                   | .27     |         |  |         | .41     |         |  |   | .17     |  |  |   | .54     | 
|                            
|                            
|                            
|                            
|Diluted earnings per share   |  |                                   | .26     |         |  |         | .40     |         |  |   | .17     |  |  |   | .53     | 
|                            
|                            
|                            
|                            
|Year Ended December 31, 2004 |  |                                   |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|                            
|                            
|                            
|                            
|Operating revenue            |  | $                                 | 622,374 |         |  | $       | 691,032 |         |  | $ | 727,318 |  |  | $ | 785,477 | 
|                            
|                            
|                            
|                            
|Operating income             |  |                                   | 14,660  |         |  |         | 59,498  |         |  |   | 45,076  |  |  |   | 61,333  | 
|                            
|                            
|                            
|                            
|Net earnings                 |  |                                   | 6,404   |         |  |         | 34,584  |         |  |   | 25,699  |  |  |   | 36,795  | 
|                            
|                            
|                            
|                            
|Basic earnings per share     |  |                                   | .08     |         |  |         | .43     |         |  |   | .32     |  |  |   | .50     | 
|                            
|                            
|                            
|                            
|Diluted earnings per share   |  |                                   | .08     |         |  |         | .43     |         |  |   | .32     |  |  |   | .50     | 



|     |                 
|---- | ----------------
|(29) | Subsequent Event

In February 2006, the Company entered into a settlement
agreement that resolved litigation in which the Company, as the
plaintiff, claimed damages arising from errors and omissions by
a former insurance broker. Under the terms of the settlement
agreement, the Company received $5.15 million, which will
be reflected as a reduction of insurance and claims expense in
the first quarter of 2006.

59



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##### Table of Contents








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure

The Company has never filed a Form 8-K to report a change
in accountants because of a disagreement over accounting
principles or procedures, financial statement disclosure, or
otherwise.






|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company
carried out an evaluation, under the supervision and with the
participation of the Companys management, including the
Companys Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the
Companys disclosure controls and procedures, (as defined
in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the Exchange Act)).

Based upon that evaluation, the Companys Chief Executive
Officer and Chief Financial Officer concluded that the
Companys disclosure controls and procedures are effective
in enabling the Company to record, process, summarize and report
information required to be included in the Companys
periodic SEC filings within the required time period.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the our internal control over
financial reporting (as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the most recent fiscal quarter that have materially
affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.

Managements Report on Internal Control over Financial
Reporting

Management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
for the Company. The Companys internal control system was
designed to provide reasonable assurance to the Companys
management and board of directors regarding the preparation and
fair presentation of published financial statements.

Management has assessed the effectiveness of the Companys
internal control over financial reporting as of
December 31, 2005, based on the criteria for effective
internal control described in Internal Control 
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on its
assessment, management concluded that the Companys
internal control over financial reporting was effective as of
December 31, 2005.

Management has engaged KPMG LLP, the independent registered
public accounting firm that audited the financial statements
included in this Annual Report on Form 10-K, to attest to
and report on managements evaluation of the Companys
internal control over financial reporting. Its report dated
March 6, 2006 is included herein.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders



We have audited managements assessment, included in the
accompanying Managements Report on Internal Control Over
Financial Reporting, that Swift Transportation Co., Inc.
maintained effective internal control over financial reporting
as of December 31, 2005, based on criteria established in
Internal Control  Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Swift Transportation Co., Inc.s management is
responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness
of internal control over financial reporting. Our responsibility
is to express an opinion on managements assessment and an
opinion on the effectiveness of the Companys internal
control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable

60



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##### Table of Contents





A companys internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A companys
internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of
management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the
financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

In our opinion, managements assessment that Swift
Transportation Co., Inc. maintained effective internal control
over financial reporting as of December 31, 2005, is fairly
stated, in all material respects, based on criteria established
in Internal Control  Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Also, in our opinion, Swift Transportation
Co., Inc. maintained, in all material respects, effective
internal control over financial reporting as of
December 31, 2005, based on criteria established in
Internal Control  Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO).

We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
consolidated balance sheets of Swift Transportation Co., Inc.
and subsidiaries as of December 31, 2005 and 2004 and the
related consolidated statements of earnings, comprehensive
income, stockholders equity and cash flows for each of the
years in the three-year period ended December 31, 2005 and
our report dated March 6, 2006 expressed an unqualified
opinion on those consolidated financial statements.



| |         
| | --------
| | KPMG LLP

Phoenix, Arizona








|         |                  
|-------- | -----------------
|Item 9B. | Other Information

None

61



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##### Table of Contents






PART III






|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant

Information with respect to continuing directors and nominees is
set forth under the captions Information Concerning
Directors, Nominees and Officers, Meetings of the
Board of Directors and its Committees, and Director
Compensation in the Registrants Notice and Proxy
Statement relating to its 2006 Annual Meeting of Stockholders
(the 2006 Notice and Proxy Statement) incorporated
by reference into this Form 10-K Report. With the exception
of the foregoing information and other information specifically
incorporated by reference into this Form 10-K Report, the
Registrants 2006 Notice and Proxy Statement is not being
filed as a part hereof.

We have adopted a code of ethics that applies to all directors,
officers and employees, including the Chief Executive Officer,
Chief Financial Officer, and the Corporate Controller. A copy of
our code of ethics has been filed as an exhibit to our 2003
Form 10-K. If we make any amendment to, or grant any
waivers of, a provision of the Code of Ethics that applies to
our principal executive officer, principal financial officer,
principal accounting officer or controller where such amendment
or waiver is required to be disclosed under Item 10 on
Form 8-K or other applicable SEC rules, we intend to
disclose such amendment or waiver and the reasons therefore on
our internet website at www.swifttrans.com.






|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

Information required by this Item with respect to executive
compensation is set forth under the captions Executive
Compensation, and Compensation Committee Interlocks
and Insider Participation in the 2006 Notice and Proxy
Statement and is incorporated herein by reference; provided,
however, that the information set forth under the captions
Compensation Committee Report on Executive
Compensation and Stock Price Performance Graph
contained in the 2006 Notice and Proxy Statement are not
incorporated by reference herein.






|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters

Information required by Item 403 of Regulation S-K
under this Item with respect to security ownership of certain
beneficial owners and management is included under the caption
Security Ownership of Principal Stockholders and
Management and Related Stockholder Matters in the 2006
Notice and Proxy Statement and is incorporated herein by
reference. Information required by Item 201(d) of
Regulation S-K under this Item with respect to equity
compensation plan information is included under the caption
Equity Compensation Plan Information as of
December 31, 2005 in the 2006 Notice and Proxy
Statement and is incorporated herein by reference.






|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions

Information with respect to certain relationships and
transactions of management is set forth under the caption
Certain Transactions and Relationships and
Compensation Committee Interlocks and Insider
Participation in the 2006 Notice and Proxy Statement and
is incorporated herein by reference.






|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accounting Fees and Services

Information required by this Item with respect to the fees and
services of our principal accountant is included under the
caption Principal Accounting Fees and Services in
the 2006 Notice and Proxy Statement and is incorporated herein
by reference.

62



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##### Table of Contents






PART IV






|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules

(a) Financial Statements and Schedules.



| |                         
| | ------------------------
| | (i) Financial Statements

|    |  |                                                                                                                                                                                                                                                                                                                                                                                   |  |                 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------
|    |  |                                                                                                                                                                                                                                                                                                                                                                                   |  | Page or         
|    |  |                                                                                                                                                                                                                                                                                                                                                                                   |  | Method of Filing
|    |  |                                                                                                                                                                                                                                                                                                                                                                                   |  |                 
|   
|   
|   
|   
|(1) |  | Report of KPMG LLP                                                                                                                                                                                                                                                                                                                                                                |  | Page 34         
|   
|   
|   
|   
|(2) |  | Consolidated Financial Statements and Notes to
    Consolidated Financial Statements of the Company, including
    Consolidated Balance Sheets as of December 31, 2005 and
    2004 and related Consolidated Statements of Earnings,
    Comprehensive Income, Stockholders Equity and Cash Flows
    for each of the years in the three-year period ended
    December 31, 2005 |  | Pages 35-59     



| |                                   
| | ----------------------------------
| | (ii) Financial Statement Schedules



| |                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Schedules have been omitted because of the absence of conditions
    under which they are required or because the required material
    information is included in the Consolidated Financial Statements
    or Notes to the Consolidated Financial Statements included
    herein.

(b) Exhibits.

|        |    |             |  |                                                                                        |  |                                                                                                                                                                    
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  | Page or                                                                               
|Number  |    | Description |  | Method of Filing                                                                      
|        |    |             |  |                                                                                       
|        | 3  | .1          |  | Form of Amended and Restated Articles of
    Incorporation of the Registrant           |  | Incorporated by reference to Annex A of the
    Registrants Definitive Proxy Statement on Form DEF
    14A dated April 30, 2002                                   
|       
|        | 3  | .2          |  | Amended and Restated Bylaws of the Registrant                                          |  | Incorporated by reference to Exhibit 3.1 of
    the Registrants Current Report on Form 8-K dated
    October 27, 2005                                             
|       
|        | 4  | .1          |  | Specimen of Common Stock Certificate                                                   |  | Incorporated by reference to Exhibit 4 of
    the Companys Annual Report on Form 10-K for the year
    ended December 31, 1992                                    
|       
|        | 10 | .1          |  | Stock Option Plan, as amended through
    November 18, 1994*                           |  | Incorporated by Reference to Exhibit 10.7 of
    the Companys Annual Report on Form 10-K for the year
    ended December 31, 1994 (the 1994
    Form 10-K)      
|       
|        | 10 | .2          |  | Non-Employee Directors Stock Option Plan, as
    amended through November 18, 1994*    |  | Incorporated by reference to Exhibit 10.8 of
    the 1994 Form 10-K                                                                                                
|        | 10 | .3          |  | Employee Stock Purchase Plan, as amended through
    November 18, 1994*                |  | Incorporated by reference to Exhibit 10.9 of
    the 1994 Form 10-K                                                                                                
|       
|        | 10 | .3.1        |  | Amendment to the Swift Transportation Co., Inc.
    1994 Employee Stock Purchase Plan* |  | Incorporated by reference to Exhibit D of
    the Registrants Definitive Proxy Statement on
    Form DEF 14A dated April 12, 2004 (the 2004
    Proxy Statement)
|       
|        | 10 | .4          |  | Swift Transportation Co., Inc. Retirement
    (401(k)) Plan dated January 1, 1992*     |  | Incorporated by reference to Exhibit 10.14
    of the Companys Form S-1 Registration Statement
    No. #33-52454                                                  
|       
|        | 10 | .5          |  | 1999 Stock Option Plan, as amended*                                                    |  | Incorporated by reference to Exhibit 4.3 of
    the Registrants Form S-8 Registration Statement No.
    Registration No. 333-53566                                
|       
|        | 10 | .6          |  | Non-Employee Directors Stock Option Plan*                                              |  | Incorporated by reference to the
    Registrants Definitive Proxy Statement on Form DEF
    14A dated April 24, 2000                                              

63



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##### Table of Contents



|        |    |             |  |                                                                                                                                        |  |                                                                                                                                                                                
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  | Page or                                                                                                                               
|Number  |    | Description |  | Method of Filing                                                                                                                      
|        |    |             |  |                                                                                                                                       
|       
|        | 10 | .7          |  | Swift Transportation Co., Inc. 2005 Non- Employee
    Director Stock Option Plan*                                                      |  | Incorporated by reference to Appendix A to
    the Registrants Definitive Proxy Statement on
    Form DEF 14A dated April 15, 2005                                            
|       
|        | 10 | .8          |  | Swift Transportation Co., Inc. 2003 Stock
    Incentive Plan*                                                                          |  | Incorporated by reference to Annex A of the
    Registrants Definitive Proxy Statement on Form DEF
    14A dated April 18, 2003                                               
|       
|        | 10 | .9          |  | 2004 Executive Management Incentive Plan*                                                                                              |  | Incorporated by reference to Exhibit E of
    the Companys 2004 Proxy Statement                                                                                               
|       
|        | 10 | .10         |  | Swift Transportation Corporation Deferred
    Compensation Plan*                                                                       |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2002                                         
|       
|        | 10 | .11         |  | Nonqualified Deferred Compensation Agreement*                                                                                          |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2000 (the 2000 First Quarter
    Form 10-Q)
|       
|        | 10 | .11.1       |  | First Amendment to Nonqualified Deferred
    Compensation Agreement Dated October 19, 2004*                                            |  | Incorporated by reference to Exhibit 10.9.1
    of the Companys Annual Report on Form 10-K for the
    year ended December 31, 2004                                           
|       
|        | 10 | .11.2       |  | Second Amendment to Nonqualified Deferred
    Compensation Agreement Dated October 19, 2004*                                           |  | Incorporated by reference to Exhibit 10.1 of
    the Registrants Current Report on Form 8-K dated
    May 26, 2005                                                            
|       
|        | 10 | .11.3       |  | Third Amendment to Nonqualified Deferred
    Compensation Agreement Dated October 19, 2004*                                            |  | Filed herewith                                                                                                                                                                 
|       
|        | 10 | .12         |  | Employment Agreement for Robert Cunningham*                                                                                            |  | Incorporated by reference to Exhibit 10.1 of
    the Registrants Current Report on Form 8-K dated
    November 3, 2004                                                        
|       
|        | 10 | .13         |  | Non-Statutory Stock Option Agreement, dated
    November 3, 2004, between Swift Transportation Co., Inc.
    and Robert W. Cunningham* |  | Incorporated by reference to Exhibit 10.2 of
    the Registrants Current Report on Form 8-K dated
    November 3, 2004                                                        
|       
|        | 10 | .14         |  | Form of Indemnification Agreement                                                                                                      |  | Incorporated by reference to Exhibit 10.2 of
    the Registrants Current Report on Form 8-K dated
    November 3, 2004                                                        
|       
|        | 10 | .15         |  | Offer Letter for Glynis Bryan*                                                                                                         |  | Incorporated by reference to Exhibit 10.1 of
    the Registrants Current Report on Form 8-K dated
    March 28, 2005                                                          
|       
|        | 10 | .16         |  | Offer Letter for Sam Cowley*                                                                                                           |  | Incorporated by reference to Exhibit 10.2 of
    the Registrants Current Report on Form 8-K dated
    March 28, 2005                                                          
|       
|        | 10 | .17         |  | Change in Control Agreement, dated
    October 27, 2005, between Swift Transportation Co., Inc.
    and Robert Cunningham*             |  | Incorporated by reference to Exhibit 10.1 of
    the Registrants Current Report on Form 8-K dated
    October 27, 2005                                                        
|       
|        | 10 | .18         |  | Form of Change in Control Agreement for
    Mr. Cowley, Ms. Bryan and Ms. Calbi*                                                       |  | Incorporated by reference to Exhibit 10.2 of
    the Registrants Current Report on Form 8-K dated
    October 27, 2005                                                        
|       
|        | 10 | .19         |  | Form of Change in Control Agreement for
    Messrs. Stocking, Riley, Martin and Attwood and
    Ms. Kennedy*                           |  | Incorporated by reference to Exhibit 10.3 of
    the Registrants Current Report on Form 8-K dated
    October 27, 2005                                                        

64



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                      
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  | Page or                                                                                                                                                                                                                                                                                                                              
|Number  |    | Description |  | Method of Filing                                                                                                                                                                                                                                                                                                                     
|        |    |             |  |                                                                                                                                                                                                                                                                                                                                      
|       
|        | 10 | .20         |  | Second Amended and Restated Revolving Credit
    Agreement dated December 16, 2005 among Swift
    Transportation Co., Inc., an Arizona Corporation, As Borrower,
    Swift Transportation Co., Inc., a Nevada Corporation, as
    Holdings, the Lenders From Time to Time Party Hereto and
    SunTrust Bank as Administrative Agent |  | Filed herewith                                                                                                                       
|       
|        | 10 | .21         |  | Amended and Restated Receivables Sale Agreement
    Dated December 21, 2005 Among Swift Receivables
    Corporation, Swift Transportation Corporation, ABN AMRO Bank
    N.V., and SunTrust Capital Markets                                                                                                                           |  | Filed herewith                                                                                                                       
|       
|        | 10 | .21.1       |  | Purchase and Sale Agreement Dated
    December 30, 1999 between Swift Transportation Corporation
    and Swift Receivables Corporation                                                                                                                                                                                                |  | Incorporated by reference to Exhibit 10.17
    of the Companys Annual Report on Form 10-K for the
    year ended December 31, 1999  
|       
|        | 10 | .22         |  | Swift Transportation Co., Inc. $100,000,000
    3.73% Senior Guaranteed Notes, Series A, Due
    June 27, 2008 And $100,000,000 4.33% Senior Guaranteed
    Notes, Series B, Due June 27, 2010 Note Purchase
    Agreement Dated as of June 27, 2003                                                                                  |  | Incorporated by reference to Exhibit 10.22
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2003
|       
|        | 10 | .22.1       |  | First Amendment Dated July 8, 2004 to Swift
    Transportation Co., Inc. $100,000,000 3.73% Senior
    Guaranteed Notes, Series A, Due June 27, 2008, and
    $100,000,000 4.33% Senior Guaranteed Notes, Series B,
    Due June 27, 2010 Note Purchase Agreement Dated as of
    June 27, 2003                                       |  | Incorporated by reference to Exhibit 10.24
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2004
|       
|        | 10 | .23         |  | Operating Agreement of Transplace.com, LLC                                                                                                                                                                                                                                                                                            |  | Incorporated by reference to Exhibit 10.19
    of the 2000 First Quarter Form 10-Q                                                   
|       
|        | 10 | .24         |  | Initial Subscription Agreement of Transplace.com,
    LLC                                                                                                                                                                                                                                                                             |  | Incorporated by reference to Exhibit 10.20
    of the 2000 First Quarter Form 10-Q                                                   
|       
|        | 14 |             |  | Code of Ethics                                                                                                                                                                                                                                                                                                                        |  | Incorporated by reference to Exhibit 14 of
    the Companys Annual Report on Form 10-K for the year
    ended December 31, 2003     
|       
|        | 21 |             |  | Subsidiaries of Registrant                                                                                                                                                                                                                                                                                                            |  | Filed herewith                                                                                                                       
|       
|        | 23 |             |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                   |  | Filed herewith                                                                                                                       
|       
|        | 31 | .1          |  | Section 302 Certification of Robert W.
    Cunningham, Chief Executive Officer and President                                                                                                                                                                                                                                          |  | Filed herewith                                                                                                                       
|       
|        | 31 | .2          |  | Section 302 Certification of Glynis A.
    Bryan, Chief Financial Officer                                                                                                                                                                                                                                                             |  | Filed herewith                                                                                                                       
|       
|        | 32 |             |  | Certification of CEO and CFO Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                         |  | Furnished herewith                                                                                                                   



---



|  |                              
|- | -----------------------------
|* | Indicates a compensation plan

65



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##### Table of Contents






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 on Form 10-K to be signed on its behalf by the
undersigned, thereunto duly authorized, this 6th day of March,
2006.



| |                                
| | -------------------------------
| | SWIFT TRANSPORTATION CO., INC.,
| | a Nevada corporation           



| |    |                         
| | -- | ------------------------
| | By | /s/ Robert W. Cunningham

| |                            
| | ---------------------------
| |                            
| | Robert W. Cunningham       
| | Chief Executive Officer and
| | President                  

Pursuant to the requirements of the Securities Exchange Act of
1934, this report on Form 10-K has been signed below by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated:

|                                             |  |                                                                                                           |  |               |  | 
|-------------------------------------------- |  | --------------------------------------------------------------------------------------------------------- |  | ------------- |  | 
|                                             |  |                                                                                                           |  |              
|Signature                                    |  | Title                                                                                                     |  | Date         
|                                             |  |                                                                                                           |  |              
|                                            
|/s/ Jock PattonJock Patton                   |  | Chairman of the Board                                                                                     |  | March 6, 2006
|                                            
|/s/ Robert W. CunninghamRobert W. Cunningham |  | Chief Executive Officer, President and Director
    (Principal Executive Officer)                         |  | March 6, 2006
|                                            
|/s/ Glynis A. BryanGlynis A. Bryan           |  | Executive Vice President
    and Chief Financial Officer
    (Principal Financial and Accounting Officer) |  | March 6, 2006
|                                            
|/s/ Samuel C. CowleySamuel C. Cowley         |  | Executive Vice President,
    General Counsel, and Director                                               |  | March 6, 2006
|                                            
|/s/ Karl EllerKarl Eller                     |  | Director                                                                                                  |  | March 6, 2006
|                                            
|/s/ Alphonse E. FreiAlphonse E. Frei         |  | Director                                                                                                  |  | March 6, 2006
|                                            
|/s/ David GoldmanDavid Goldman               |  | Director                                                                                                  |  | March 6, 2006
|                                            
|/s/ Paul M. MecrayPaul M. Mecray III         |  | Director                                                                                                  |  | March 6, 2006
|                                            
|/s/ Jerry C. MoyesJerry C. Moyes             |  | Director                                                                                                  |  | March 6, 2006
|                                            
|/s/ Karen E. RasmussenKaren E. Rasmussen     |  | Director                                                                                                  |  | March 6, 2006

66



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##### Table of Contents



EXHIBIT INDEX

|        |    |             |  |                                                                                             |  |                                                                                                                                                                                
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  | Page or                                                                                    
|Number  |    | Description |  | Method of Filing                                                                           
|        |    |             |  |                                                                                            
|        | 3  | .1          |  | Form of Amended and Restated Articles of
    Incorporation of the Registrant                |  | Incorporated by reference to Annex A of the
    Registrants Definitive Proxy Statement on Form DEF
    14A dated April 30, 2002                                               
|       
|        | 3  | .2          |  | Amended and Restated Bylaws of the Registrant                                               |  | Incorporated by reference to Exhibit 3.1 of
    the Registrants Current Report on Form 8-K dated
    October 27, 2005                                                         
|       
|        | 4  | .1          |  | Specimen of Common Stock Certificate                                                        |  | Incorporated by reference to Exhibit 4 of
    the Companys Annual Report on Form 10-K for the year
    ended December 31, 1992                                                
|       
|        | 10 | .1          |  | Stock Option Plan, as amended through
    November 18, 1994*                                |  | Incorporated by Reference to Exhibit 10.7 of
    the Companys Annual Report on Form 10-K for the year
    ended December 31, 1994 (the 1994
    Form 10-K)                  
|       
|        | 10 | .2          |  | Non-Employee Directors Stock Option Plan, as
    amended through November 18, 1994*         |  | Incorporated by reference to Exhibit 10.8 of
    the 1994 Form 10-K                                                                                                            
|        | 10 | .3          |  | Employee Stock Purchase Plan, as amended through
    November 18, 1994*                     |  | Incorporated by reference to Exhibit 10.9 of
    the 1994 Form 10-K                                                                                                            
|       
|        | 10 | .3.1        |  | Amendment to the Swift Transportation Co., Inc.
    1994 Employee Stock Purchase Plan*      |  | Incorporated by reference to Exhibit D of
    the Registrants Definitive Proxy Statement on
    Form DEF 14A dated April 12, 2004 (the 2004
    Proxy Statement)            
|       
|        | 10 | .4          |  | Swift Transportation Co., Inc. Retirement
    (401(k)) Plan dated January 1, 1992*          |  | Incorporated by reference to Exhibit 10.14
    of the Companys Form S-1 Registration Statement
    No. #33-52454                                                              
|       
|        | 10 | .5          |  | 1999 Stock Option Plan, as amended*                                                         |  | Incorporated by reference to Exhibit 4.3 of
    the Registrants Form S-8 Registration Statement No.
    Registration No. 333-53566                                            
|       
|        | 10 | .6          |  | Non-Employee Directors Stock Option Plan*                                                   |  | Incorporated by reference to the
    Registrants Definitive Proxy Statement on Form DEF
    14A dated April 24, 2000                                                          
|       
|        | 10 | .7          |  | Swift Transportation Co., Inc. 2005 Non- Employee
    Director Stock Option Plan*           |  | Incorporated by reference to Appendix A to
    the Registrants Definitive Proxy Statement on
    Form DEF 14A dated April 15, 2005                                            
|       
|        | 10 | .8          |  | Swift Transportation Co., Inc. 2003 Stock
    Incentive Plan*                               |  | Incorporated by reference to Annex A of the
    Registrants Definitive Proxy Statement on Form DEF
    14A dated April 18, 2003                                               
|       
|        | 10 | .9          |  | 2004 Executive Management Incentive Plan*                                                   |  | Incorporated by reference to Exhibit E of
    the Companys 2004 Proxy Statement                                                                                               
|       
|        | 10 | .10         |  | Swift Transportation Corporation Deferred
    Compensation Plan*                            |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2002                                         
|       
|        | 10 | .11         |  | Nonqualified Deferred Compensation Agreement*                                               |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2000 (the 2000 First Quarter
    Form 10-Q)
|       
|        | 10 | .11.1       |  | First Amendment to Nonqualified Deferred
    Compensation Agreement Dated October 19, 2004* |  | Incorporated by reference to Exhibit 10.9.1
    of the Companys Annual Report on Form 10-K for the
    year ended December 31, 2004                                           



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                    
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  | Page or                                                                                                                                                                                                                                                                                                                              
|Number  |    | Description |  | Method of Filing                                                                                                                                                                                                                                                                                                                     
|        |    |             |  |                                                                                                                                                                                                                                                                                                                                      
|       
|        | 10 | .11.2       |  | Second Amendment to Nonqualified Deferred
    Compensation Agreement Dated October 19, 2004*                                                                                                                                                                                                                                          |  | Incorporated by reference to Exhibit 10.1 of
    the Registrants Current Report on Form 8-K dated
    May 26, 2005                
|       
|        | 10 | .11.3       |  | Third Amendment to Nonqualified Deferred
    Compensation Agreement Dated October 19, 2004*                                                                                                                                                                                                                                           |  | Filed herewith                                                                                                                     
|       
|        | 10 | .12         |  | Employment Agreement for Robert Cunningham*                                                                                                                                                                                                                                                                                           |  | Incorporated by reference to Exhibit 10.1 of
    the Registrants Current Report on Form 8-K dated
    November 3, 2004            
|       
|        | 10 | .13         |  | Non-Statutory Stock Option Agreement, dated
    November 3, 2004, between Swift Transportation Co., Inc.
    and Robert W. Cunningham*                                                                                                                                                                                                |  | Incorporated by reference to Exhibit 10.2 of
    the Registrants Current Report on Form 8-K dated
    November 3, 2004            
|       
|        | 10 | .14         |  | Form of Indemnification Agreement                                                                                                                                                                                                                                                                                                     |  | Incorporated by reference to Exhibit 10.2 of
    the Registrants Current Report on Form 8-K dated
    November 3, 2004            
|       
|        | 10 | .15         |  | Offer Letter for Glynis Bryan*                                                                                                                                                                                                                                                                                                        |  | Incorporated by reference to Exhibit 10.1 of
    the Registrants Current Report on Form 8-K dated
    March 28, 2005              
|       
|        | 10 | .16         |  | Offer Letter for Sam Cowley*                                                                                                                                                                                                                                                                                                          |  | Incorporated by reference to Exhibit 10.2 of
    the Registrants Current Report on Form 8-K dated
    March 28, 2005              
|       
|        | 10 | .17         |  | Change in Control Agreement, dated
    October 27, 2005, between Swift Transportation Co., Inc.
    and Robert Cunningham*                                                                                                                                                                                                            |  | Incorporated by reference to Exhibit 10.1 of
    the Registrants Current Report on Form 8-K dated
    October 27, 2005            
|       
|        | 10 | .18         |  | Form of Change in Control Agreement for
    Mr. Cowley, Ms. Bryan and Ms. Calbi*                                                                                                                                                                                                                                                      |  | Incorporated by reference to Exhibit 10.2 of
    the Registrants Current Report on Form 8-K dated
    October 27, 2005            
|       
|        | 10 | .19         |  | Form of Change in Control Agreement for
    Messrs. Stocking, Riley, Martin and Attwood and
    Ms. Kennedy*                                                                                                                                                                                                                          |  | Incorporated by reference to Exhibit 10.3 of
    the Registrants Current Report on Form 8-K dated
    October 27, 2005            
|       
|        | 10 | .20         |  | Second Amended and Restated Revolving Credit
    Agreement dated December 16, 2005 among Swift
    Transportation Co., Inc., an Arizona Corporation, As Borrower,
    Swift Transportation Co., Inc., a Nevada Corporation, as
    Holdings, the Lenders From Time to Time Party Hereto and
    SunTrust Bank as Administrative Agent |  | Filed herewith                                                                                                                     
|       
|        | 10 | .21         |  | Amended and Restated Receivables Sale Agreement
    Dated December 21, 2005 Among Swift Receivables
    Corporation, Swift Transportation Corporation, ABN AMRO Bank
    N.V., and SunTrust Capital Markets                                                                                                                           |  | Filed herewith                                                                                                                     
|       
|        | 10 | .21.1       |  | Purchase and Sale Agreement Dated
    December 30, 1999 between Swift Transportation Corporation
    and Swift Receivables Corporation                                                                                                                                                                                                |  | Incorporated by reference to Exhibit 10.17
    of the Companys Annual Report on Form 10-K for the
    year ended December 31, 1999



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                      
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  | Page or                                                                                                                                                                                                                                                                                        
|Number  |    | Description |  | Method of Filing                                                                                                                                                                                                                                                                               
|        |    |             |  |                                                                                                                                                                                                                                                                                                
|       
|        | 10 | .22         |  | Swift Transportation Co., Inc. $100,000,000
    3.73% Senior Guaranteed Notes, Series A, Due
    June 27, 2008 And $100,000,000 4.33% Senior Guaranteed
    Notes, Series B, Due June 27, 2010 Note Purchase
    Agreement Dated as of June 27, 2003                                            |  | Incorporated by reference to Exhibit 10.22
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2003
|       
|        | 10 | .22.1       |  | First Amendment Dated July 8, 2004 to Swift
    Transportation Co., Inc. $100,000,000 3.73% Senior
    Guaranteed Notes, Series A, Due June 27, 2008, and
    $100,000,000 4.33% Senior Guaranteed Notes, Series B,
    Due June 27, 2010 Note Purchase Agreement Dated as of
    June 27, 2003 |  | Incorporated by reference to Exhibit 10.24
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2004
|       
|        | 10 | .23         |  | Operating Agreement of Transplace.com, LLC                                                                                                                                                                                                                                                      |  | Incorporated by reference to Exhibit 10.19
    of the 2000 First Quarter Form 10-Q                                                   
|       
|        | 10 | .24         |  | Initial Subscription Agreement of Transplace.com,
    LLC                                                                                                                                                                                                                                       |  | Incorporated by reference to Exhibit 10.20
    of the 2000 First Quarter Form 10-Q                                                   
|       
|        | 14 |             |  | Code of Ethics                                                                                                                                                                                                                                                                                  |  | Incorporated by reference to Exhibit 14 of
    the Companys Annual Report on Form 10-K for the year
    ended December 31, 2003     
|       
|        | 21 |             |  | Subsidiaries of Registrant                                                                                                                                                                                                                                                                      |  | Filed herewith                                                                                                                       
|       
|        | 23 |             |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                             |  | Filed herewith                                                                                                                       
|       
|        | 31 | .1          |  | Section 302 Certification of Robert W.
    Cunningham, Chief Executive Officer and President                                                                                                                                                                                                    |  | Filed herewith                                                                                                                       
|       
|        | 31 | .2          |  | Section 302 Certification of Glynis A.
    Bryan, Chief Financial Officer                                                                                                                                                                                                                       |  | Filed herewith                                                                                                                       
|       
|        | 32 |             |  | Certification of CEO and CFO Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                   |  | Furnished herewith                                                                                                                   



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|  |                              
|- | -----------------------------
|* | Indicates a compensation plan