##### Table of Contents









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,
    2003                                             
|          
|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(Address of principal executive
    offices) |  | 85043(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 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 an accelerated filer (as defined
in Exchange Act
Rule 12b-2).     Yes þ          No o

At June 30,
2003, the aggregate market value of common stock held by
non-affiliates of the registrant was $977,365,000 based on
$18.61 per share, which is the average of the closing bid and
ask prices of our common stock as reported on the Nasdaq
National Market on June 30, 2003.

The number of
shares outstanding of the registrants common stock on
March 10, 2004 was 83,547,625.

DOCUMENTS INCORPORATED BY REFERENCE

Materials from the
registrants Notice and Proxy Statement relating to the
2004 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

|           |  |                                                                                                                         |     |      |    | 
|---------- |  | ----------------------------------------------------------------------------------------------------------------------- | --- | ---- | -- | 
|           |  |                                                                                                                         |     | Page
|           |  |                                                                                                                         |     |     
|PART I    
|Item 1.    |  | Business                                                                                                                |     |      | 2  | 
|Item 2.    |  | Properties                                                                                                              |     |      | 8  | 
|Item 3.    |  | Legal Proceedings                                                                                                       |     |      | 10 | 
|Item 4.    |  | Submission of Matters to a
    Vote of Security Holders                                                                 |     |      | 10 | 
|PART II   
|Item 5.    |  | Market for the
    Registrants Common Stock, Related Stockholder Matters and
    Issuer Purchases of Equity Securities |     |      | 10 | 
|Item 6.    |  | Selected Financial and
    Operating Data                                                                               |     |      | 12 | 
|Item 7.    |  | Managements Discussion
    and Analysis of Financial Condition and Results of Operations                               |     |      | 13 | 
|Item 7A.   |  | Quantitative and Qualitative
    Disclosures about Market Risk                                                          |     |      | 23 | 
|Item 8.    |  | Financial Statements and
    Supplementary Data                                                                         |     |      | 23 | 
|Item 9.    |  | Changes in and Disagreements
    With Accountants on Accounting and Financial Disclosure                                |     |      | 47 | 
|Item 9A.   |  | Controls and Procedures                                                                                                 |     |      | 47 | 
|PART III  
|Item 10.   |  | Directors and Executive
    Officers of the Registrant                                                                  |     |      | 47 | 
|Item 11.   |  | Executive Compensation                                                                                                  |     |      | 47 | 
|Item 12.   |  | Security Ownership of
    Certain Beneficial Owners and Management and Related Stockholder
    Matters                  |     |      | 47 | 
|Item 13.   |  | Certain Relationships and
    Related Transactions                                                                      |     |      | 48 | 
|Item 14.   |  | Principal Accountant Fees
    and Services                                                                              |     |      | 48 | 
|PART IV   
|Item 15.   |  | Exhibits, Financial
    Statement Schedules, and Reports on Form 8-K                                                    |     |      | 48 | 
|SIGNATURES |  |                                                                                                                         | S-1 |     
|EX-10.9.3 
|EX-14     
|EX-21     
|EX-23     
|EX-31.1   
|EX-31.2   
|EX-32     



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PART I




Item 1.Business

General

Swift Transportation Co., Inc., a Nevada
corporation headquartered in Phoenix, Arizona, is a holding
company for the operating corporations named Swift
Transportation Co., Inc. and Swift Transportation
Corporation, (collectively referred to as Swift,
we, our, us or the
Company) which operate the largest fleet of
truckload carrier equipment in the United States combining
strong regional operations with a transcontinental van
operation. 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. We
operate throughout the continental United States, predominantly
in one industry, road transportation, as a truckload motor
carrier and thus have only one single reportable segment.

This Annual Report on Form 10-K,
including but not limited to the portions hereof entitled
Business  Operations 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 us from time to time
in filings with the Securities and Exchange Commission or
otherwise. The words believe, expect,
anticipate, and 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 may include, but are not limited to:
projections of revenues, income, or loss; capital expenditures;
plans for future operations; financing needs or plans; the
impact of inflation; plans relating to products or services of
the Company; the benefits of our terminal network; the continued
consolidation of the truckload industry and our ability to
capitalize on this trend; the increase in the number of
companies outsourcing their transportation requirements; our
ability to sell our used trucks at favorable prices; our ability
to attract and retain qualified drivers; our ability to pass on
to our customers increased labor and fuel costs and protect
against increases in fuel costs through the use of fuel
efficient equipment; pending or future acquisitions; that our
relationship with Wal-Mart will be enhanced as a result of our
acquisition of Merit; the sufficiency of our capital resources;
our plans to extend our vehicle replacement program to four or
more years; the anticipated impact of receiving a conditional
safety rating from the Federal Motor Carrier Safety
Administration; the outcome of routine litigation incidental to
our business; and the impact of new regulations issued by the
Department of Transportation concerning the maximum number of
hours of service that commercial truck drivers can operate; as
well as assumptions relating to the foregoing. We undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future
events, or otherwise.

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 the Consolidated Financial
Statements 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 Stock, Related
Stockholder Matters and Issuer Repurchases of Equity
Securities in this Annual Report.

Operations

We have developed a network of regional terminals
and offices strategically located in areas that have strong and
diverse economies and provide access to key population centers.
Our terminal network establishes a local market presence in the
regions we serve and enables us to respond more rapidly to our
customers changing requirements. The terminals are located
in close proximity to major customers who provide us with
significant freight volume. To minimize competition with
long-haul truckload carriers and railroads, we

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operate principally within short-to-medium-haul
traffic lanes. With an average length of haul of less than
600 miles, we are able to limit our direct competition with
railroads, intermodal services and longer-haul, less specialized
truckload carriers. (See further discussion under
Competition.) Although our transcontinental division
allows us to serve a broad spectrum of shipper needs, the
primary regions in which we operate are ideally suited to
short-to-medium-haul lanes because of the distribution of
population and economic centers. To manage the higher costs and
greater logistical complexity inherent in operating in
short-to-medium haul traffic lanes, we employ sophisticated
computerized management control systems to monitor key aspects
of our operations, such as matching availability of equipment
with the transportation needs of our customers, truck
productivity, equipment maintenance and fuel consumption. We
have a significant investment in our computer hardware and
utilize state-of-the-art software specially designed for the
trucking industry. Customer Service professionals monitor the
location and delivery schedules of all shipments and equipment
to coordinate routes and maximize equipment utilization. Our
computer system provides immediate access to current information
regarding driver and equipment status and location, specific
load and equipment instructions, routing and dispatching.


We focus on achieving constant availability for
service-sensitive customers in short-to-medium haul traffic
lanes that regularly ship over established routes within our
regional service areas. We seek to provide premium service with
commensurate rates, rather than compete primarily on the basis
of price. This regional network also enables us to enhance
driver recruitment and retention by regularly returning drivers
to their homes, reducing our purchases of higher priced fuel at
truck stops and expediting lower cost, in-house equipment
maintenance. The principal elements of our premium service
include: regional terminals to facilitate single and multiple
pick-ups and deliveries and maintain local contact with
customers; well-maintained, late model equipment that enhances
on-time deliveries and driver satisfaction; a fully-integrated
computer system to monitor shipment status and variations from
schedule; an onboard communications system that enables us to
dispatch and monitor traffic; timely deliveries; specialized
equipment, such as high cubic capacity trailers, to respond
promptly to customers varying requirements; multiple
drops, appointment pick-ups and deliveries; assistance in
loading and unloading; and extra trailers that can be placed for
the convenience of our customers at their shipping locations.

The achievement of significant regular freight
volumes on high-density routes and maintaining consistent
shipment scheduling over these routes are key elements of our
operations. As a result, our operations personnel are better
able to match available equipment to available loads and
schedule regular maintenance and fueling at our terminals,
thereby enhancing productivity and asset utilization and
minimizing empty miles and expensive over-the-road fueling and
repair costs. Consistent scheduling also allows us to be more
responsive to our customers needs. Our regular scheduling
and relatively short length of haul enable drivers to regularly
return to their homes, which helps us with driver recruitment
and retention.

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 has contributed to consolidation
in the truckload industry. Nevertheless, the truckload industry
remains highly fragmented, and we believe that overall growth in
the truckload industry and continued industry consolidation will
present opportunities for well-managed, financially stable
carriers like us to expand.

In addition to expanding our services to existing
customers, we actively pursue new traffic commitments from high
volume, financially stable shippers for whom we have not
previously provided services. Furthermore, a number of large
companies maintain their own private trucking fleets to
facilitate distribution of their products. In order to reduce
operating costs associated with private fleets, a number of
large companies periodically evaluate the opportunity to
outsource their transportation and logistics requirements. We
believe our strong regional operations and average length of
haul of less than 600 miles position allows us to take
advantage of this trend. We already serve as a preferred
supplier, or core carrier for many major shippers
who are considering, or may in the future consider, outsourcing
their private fleet transportation and logistics requirements.

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We intend to take advantage of growth
opportunities through a combination of internal growth and
selective acquisitions. We generally limit our consideration of
acquisitions to those we believe will be accretive to earnings
within six months and produce a double-digit internal rate of
return on investment.

In addition to the domestic operations described
above, we have a growing cross border operation into Mexico that
primarily ships through commercial border crossings from Laredo,
Texas westward to California. In 2000, we augmented our cross
border operation by acquiring 49% of Trans-Mex, a carrier that
focuses on shipments to and from Mexico and we purchased the
remaining 51% in January 2004. For additional information
regarding our purchase of the remaining interest in Trans-Mex as
well as our guarantees of certain Trans-Mex obligations, see the
Notes to Consolidated Financial Statements.

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.com upon its formation. Our interest in
Transplace.com is approximately 29%, reflecting both our initial
investment and that held by out subsidiary, M.S. Carriers. We
report our equity interest in Transplace.com and our share of
the profits and losses of Transplace.com in our consolidated
financial statements using the equity method of accounting. See
the Notes to Consolidated Financial Statements.

As a transportation logistics company, Transplace
matches shippers with trucking companies and receives a fee for
this service. We may receive from Transplace the opportunity to
provide transportation services to shippers. In addition, we may
utilize Transplace to assist in obtaining additional capacity
from other trucking companies for our customers. During the
years ended December 31, 2003, 2002 and 2001, Swift
received less than 3% of its operating revenue from Transplace
and paid less than 1% of its purchased transportation to
Transplace.

Acquisitions

Our growth has been dependent in part upon the
acquisition of trucking companies throughout the United States.
From 1988 through 1997, we completed eight acquisitions through
which we grew from a regional carrier in the Western United
States to a national carrier with operations throughout the
entire country.

In January 2001, we further expanded our
operations in the eastern United States through an agreement
with Cardinal Freight Carriers Inc. (Cardinal
Freight), a van and flatbed carrier based in Concord,
North Carolina. Under this agreement, we hired a number of
Cardinal Freights drivers and subleased a number of
tractors from Cardinal Freight.

In June 2001, we merged with M.S.
Carriers, Inc. (M.S. Carriers), also a
publicly- held truckload carrier operating predominantly in the
eastern United States. In exchange for 19,464,322 shares of
our common stock, M.S. Carriers became a wholly-owned
subsidiary. The transaction was accounted for as a pooling of
interests.

In July 2003, we completed the acquisition of
certain assets of Merit Distribution Services, Inc.
Merits fleet consists of 825 tractors, including 140 owner
operators, and 1,400 trailers of which 455 tractors and 1,100
trailers are 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 is expected to enhance our relationship with
Wal-Mart, our largest customer.

See Factors That May Affect Future Results
and Financial Condition under Item 7.

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.

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The following table shows the type and age of our
owned and leased equipment at December 31, 2003:

|               |  |             |        |              |  |             |        |          |  |              |     |             |  |  |       |  |  |  |       |  |  |  |     | 
|-------------- |  | ----------- | ------ | ------------ |  | ----------- | ------ | -------- |  | ------------ | --- | ----------- |  |  | ----- |  |  |  | ----- |  |  |  | --- | 
|               |  |             |        | 57, 53 and |  | Sets of     |        | Flatbed  |  | Refrigerated |     | Specialized
|Model Year     |  | Tractors(1) |        | 48 Vans     |  | Double Vans |        | Trailers |  | Trailers     |     | Trailers   
|               |  |             |        |              |  |             |        |          |  |              |     |            
|2004           |  |             | 2,537  |              |  |             | 562    |          |  |              |     |             |  |  | 45    |  |  |  | 277   |  |  |  | 55  | 
|2003           |  |             | 2,590  |              |  |             | 2,458  |          |  |              | 145 |             |  |  |       |  |  |  | 700   |  |  |  | 156 | 
|2002           |  |             | 2,922  |              |  |             | 1,463  |          |  |              |     |             |  |  | 264   |  |  |  | 229   |  |  |  | 116 | 
|2001           |  |             | 2,225  |              |  |             | 4,941  |          |  |              |     |             |  |  | 232   |  |  |  | 248   |  |  |  | 48  | 
|2000           |  |             | 2,573  |              |  |             | 10,767 |          |  |              |     |             |  |  | 85    |  |  |  | 80    |  |  |  | 100 | 
|1999           |  |             | 852    |              |  |             | 8,804  |          |  |              |     |             |  |  | 50    |  |  |  | 345   |  |  |  | 9   | 
|1998           |  |             | 147    |              |  |             | 5,552  |          |  |              |     |             |  |  | 21    |  |  |  | 98    |  |  |  | 2   | 
|1997 and prior |  |             | 498    |              |  |             | 11,431 |          |  |              | 325 |             |  |  | 579   |  |  |  | 205   |  |  |  | 97  | 
|               |  |             |        |              |  |             |        |          |  |              |     |             |  |  |       |  |  |  |       |  |  |  |     | 
|Total          |  |             | 14,344 |              |  |             | 45,978 |          |  |              | 470 |             |  |  | 1,276 |  |  |  | 2,182 |  |  |  | 583 | 
|               |  |             |        |              |  |             |        |          |  |              |     |             |  |  |       |  |  |  |       |  |  |  |     | 



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|    |                                        
|--- | ---------------------------------------
|(1) | Excludes 3,692 owner-operator tractors.

Historically, we have purchased tractors and
trailers manufactured to our specifications. Since 1990, we have
predominantly acquired tractors manufactured by Freightliner
powered by Series 60 Detroit Diesel engines. This
standardization of driveline components enhanced our maintenance
program by allowing us to operate with a minimum spare parts
inventory. We historically have had a three-year replacement
program on the majority of our line-haul tractors. After
evaluating the 2002 tractor engines, which were designed to
conform to the emissions standards mandated by the
U.S. Environmental Protection Agency (EPA) that became
effective on October 1, 2002, we have decided to operate
the majority of our equipment for a period of four years.
Furthermore, we may operate some equipment for five years
depending upon mileage and use of the equipment. In the future,
we expect to acquire tractors from two or more manufacturers. We
expect to work with these equipment manufacturers to specify
components that are common to each tractor so that we can
continue the benefits of parts standardization. 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.

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, allowing us to rapidly
alter routes in response to customer requirements and adverse
weather conditions and to eliminate the need for driver stops to
report problems or delays. This system allows drivers to inform
dispatchers and driver managers of the status of routing,
loading and unloading or the need for emergency repairs. We
believe this communications system improves fleet control, the
quality of customer service and driver recruitment and
retention. We intend to continue to install the communication
system in substantially all tractors acquired in the future.

Marketing and Customers

We have targeted the service-sensitive segment of
the truckload market, both common and contract, rather than that
segment that uses price as its primary consideration. We have
chosen to provide premium service with commensurate rates rather
than compete primarily on the basis of price. The principal
elements of our premium service include: regional terminals to
facilitate single and multiple pick-ups and deliveries and
maintain local contact with customers; well-maintained, late
model equipment that enhances on-time deliveries and driver
satisfaction; a fully-integrated computer system to monitor
shipment status and variations from schedule; an onboard
communications system that enables us to dispatch and monitor
traffic; timely deliveries; specialized equipment, such as high
cubic capacity trailers, to respond promptly to customers
varying requirements; multiple drops, appointment pick-ups and
deliveries; assistance in loading and unloading; and extra
trailers that can be placed for the convenience of our
customers. We concentrate our marketing efforts on expanding the
amount of service we provide to existing customers.

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We maintain a strong commitment to marketing. We
have assigned a member of senior management to each of our
largest customers to ensure a high level of customer support. We
solicit new customers from our Phoenix, Arizona headquarters and
each of our regional terminals through a marketing staff of
approximately 50 persons. Once a customer relationship has been
established, regional customer service representatives maintain
contact and solicit additional business. We concentrate on
attracting non-cyclical customers that regularly ship multiple
loads from locations that complement existing traffic flows.
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. This strategy enables us to maximize equipment
utilization.

The largest 25, 10 and 5 customers accounted for
approximately 55%, 39% and 30% respectively, of our revenues
during 2003, 50%, 34% and 25%, respectively, of our revenues
during 2002 and 48%, 33% and 23%, respectively, of our revenues
during 2001. Wal-Mart is our largest customer and accounted for
approximately 12%, 7% and 4% of our operating revenue during
2003, 2002 and 2001. No other customer accounted for more than
6% of operating revenue during the three years ended
December 31, 2003. 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.

Employees

Our larger terminals are staffed with terminal
managers, driver managers and customer service representatives.
Our terminal managers work with the fleet 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 are also responsible for soliciting
new customers and serving existing customers in their areas.
Each driver manager is responsible for the general operation of
approximately 35 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.

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 need for
qualified drivers, we have contracted with driver-training
schools, which are managed by outside organizations including
local community colleges throughout the country. 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
(DOT) physical examination, which includes drug and
alcohol screening. Students are required to complete three weeks
of classroom study and closed driving course time and a six to
eight week, on-the-road training program.

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. In order to attract and retain highly
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. The majority of company drivers are
compensated on the basis of miles driven, loading/unloading and
number of stops or deliveries, plus bonuses. The base pay for
the miles driven by a drive increase with a drivers length
of service. Drivers employed by Swift participate in
company-sponsored health, life and dental insurance plans and
are eligible to participate in our 401(k) Profit Sharing Plan
and an Employee Stock Purchase Plan.

We have adopted a speed limit of 60 miles
per hour for Company tractors (62 miles per hour for team
drivers) and 65 miles per hour for owner-operator tractors,
which is below the speed limits of many states. We

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believe operating at 65 or slower reduces
accidents, enhances fuel mileage and minimizes maintenance
expense. Substantially all of our tractors are equipped with
electronically controlled engines that are set to limit the
speed of the vehicle. M.S. Carriers company drivers who joined
Swift upon the merger continue to operate at 65 miles per
hour.


We enter into contracts with owner-operators.
These owner-operators, unlike drivers we employ, own their
tractors and are responsible for operating costs (for example
fuel and maintenance) as opposed to drivers who are our
employees. The owner-operators operate under our authority and
are generally compensated based upon miles. Owner-operators
currently comprise approximately 20% of our total fleet and we
desire to aggressively expand this level. We believe that owner
operators provide Swift with a noticeably higher return on our
invested assets because owner operators incur the cost of
acquiring their tractor, not Swift.

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. Although 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.

As of December 31, 2003, Swift employed
approximately 21,000 full-time persons, of whom
approximately 16,600 were drivers (including driver trainees),
1,900 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.

Safety

We have an active safety and loss prevention
program at each of our terminals. Supervisors engage in ongoing
training of drivers regarding safe vehicle operations. We have
adopted maximum speed limits. We believe that our insurance and
claims expense, as a percentage of operating revenue is one of
the best in the industry, which is attributable to our overall
strong safety program.

Fuel

In order to reduce fuel costs, we purchase
approximately 79% of our fuel in bulk at 33 of our 35 terminals.
We store fuel in underground storage tanks at two 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. From time to time, we, in response
to increases in fuel costs, have implemented fuel surcharges to
pass on to our customers all or substantially all of increased
fuel costs. However, there can be no assurance that such fuel
surcharges could be used to offset 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 have generally 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 seek to provide premium service with
commensurate rates, rather than compete primarily on the basis
of price. 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. There are some
trucking companies with which we compete that have greater
financial resources, and one may own more revenue equipment and
carry a larger volume of freight than us. Long-haul truckload
carriers and railroads also provide competition, but to a lesser
degree. We also compete with other motor carriers for the
services of drivers.

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Regulation

We are regulated by the United States Department
of Transportation. This regulatory authority has broad powers,
generally governing matters such as authority to engage in motor
carrier operations, 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.

Our safety rating has always been and continues
to be satisfactory, the highest rating given by Federal Motor
Carrier Safety Administration (FMCSA). An October 2003
compliance review by the Arizona division of the FMCSA has
resulted in a proposed safety rating of conditional. We have
been in discussions with the FMCSA about the proposed rating and
filed a petition for a stay of the effective date of the
proposed safety rating pending a review as provided for under
the FMCSA regulations. Our petition for a stay was granted by
the FMCSA on December 18, 2003 and the Arizona division of
the FMCSA was ordered to respond to Swifts petition for
review. We received this response on January 19, 2004 and
submitted our reply on February 5, 2004. See
Managements Discussion and Analysis of Financial
Conditions and Results of Operations  Safety Rating
Update for additional discussion about this situation.

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. We believe that our operations
are in substantial compliance with current laws and regulations
and do not know of any existing condition that would cause
compliance with applicable environmental regulations to have 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 reduce
shipments after the winter holiday season. 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.




Item 2.Properties

Swifts headquarters is situated on
approximately 100 acres in the southwestern area of
Phoenix, Arizona. The campus 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 two bay truck wash and an
eight lane fueling facility.

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##### Table of Contents



Swift has terminals throughout the continental
United States. A terminal may include customer service,
marketing, fuel and repair facilities. The following table
provides information regarding our significant facilities or
terminals:

|                                |  |                 |              |             |  |                                          
|------------------------------- |  | --------------- | ------------ | ----------- |  | -----------------------------------------
|Location                        |  | Owned or Leased |              | Description
|                                |  |                 |              |            
|Western Region                  |  |                 |              |             |  |                                          
|Colorado  Denver               |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|Colorado  Pueblo               |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|Idaho  Lewiston                |  |                 | Owned/Leased |             |  | Customer Service, Marketing, Fuel, Repair
|Oklahoma  Oklahoma City        |  |                 | Owned        |             |  | Customer Service, Fuel, Repair           
|Oregon  Troutdale              |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|Texas  Corsicana               |  |                 | Owned        |             |  | Customer Service, Fuel, Repair           
|Texas  Irving                  |  |                 | Leased       |             |  | Customer Service, Marketing, Fuel, Repair
|Texas  Laredo                  |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|Utah  Salt Lake City           |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|Washington  Sumner             |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|Southwest Region                |  |                 |              |             |  |                                          
|Arizona  Phoenix               |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|California  Fontana            |  |                 | Owned/Leased |             |  | Customer Service, Marketing, Fuel, Repair
|California  Lathrop (Bay Area) |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|California  Willows            |  |                 | Owned        |             |  | Fuel, Repair                             
|California  Wilmington         |  |                 | Owned        |             |  | Customer Service, Fuel, Repair           
|Nevada  Sparks                 |  |                 | Owned/Leased |             |  | Customer Service, Fuel, Repair           
|New Mexico  Albuquerque        |  |                 | Owned        |             |  | Fuel, Repair                             
|Texas  El Paso                 |  |                 | Owned        |             |  | Marketing, Fuel, Repair                  
|Central Region                  |  |                 |              |             |  |                                          
|Illinois  Manteno              |  |                 | Owned        |             |  | Customer Service, Fuel, Repair           
|Indiana  Gary                  |  |                 | Owned        |             |  | Customer Service, Fuel, Repair           
|Indiana  Shoals                |  |                 | Owned        |             |  | Fuel, Repair                             
|Kansas  Edwardsville           |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|Michigan  New Boston           |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|Minnesota  Invergrove Heights  |  |                 | Leased       |             |  | Repair                                   
|Ohio  Columbus                 |  |                 | Owned        |             |  | Customer Service, Fuel, Repair           
|Tennessee  Memphis             |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|Wisconsin  Town of Menasha     |  |                 | Owned        |             |  | Customer Service, Repair, Fuel           
|Eastern Region                  |  |                 |              |             |  |                                          
|Florida  Ocala                 |  |                 | Owned        |             |  | Fuel, Repair                             
|Georgia  Decatur               |  |                 | Owned        |             |  | Customer Service, Marketing, Fuel, Repair
|New York  Selkirk              |  |                 | Owned        |             |  | Repair                                   
|New York  Syracuse             |  |                 | Owned        |             |  | 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        |             |  | Fuel, Repair                             

As of December 31, 2003, our aggregate
monthly rent for all leased properties was $264,000.

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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.




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 2003.




PART II






|        |                                                                                                                        
|------- | -----------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for the Registrants Common
    Stock, 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
|               |  |              |       |    
|2003           |  |              |       |     |  |   |       | 
|First Quarter  |  | $            | 20.43 |     |  | $ | 14.81 | 
|Second Quarter |  |              | 21.52 |     |  |   | 15.91 | 
|Third Quarter  |  |              | 24.80 |     |  |   | 18.39 | 
|Fourth Quarter |  |              | 25.64 |     |  |   | 19.80 | 
|2002           |  |              |       |     |  |   |       | 
|First Quarter  |  | $            | 25.58 |     |  | $ | 20.38 | 
|Second Quarter |  |              | 23.48 |     |  |   | 18.11 | 
|Third Quarter  |  |              | 23.90 |     |  |   | 14.94 | 
|Fourth Quarter |  |              | 20.72 |     |  |   | 14.76 | 

On March 10, 2004, the last reported sales price
of our common stock was $20.91 per share. At that date, the
number of stockholder accounts of record of our common stock was
4,800. We estimate there are approximately 6,400 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 and one of our notes
payable include 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 the financial condition, results of
operations, and capital requirements of the Company, as well as
other factors deemed relevant by the Board of Directors.

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
Managements Discussion and Analysis of Financial
Condition and Results of Operations  Factors That May
Affect Future Results and Financial Condition.

Influence by Principal
Stockholder.Trusts established for
the benefit of Jerry C. Moyes and his family beneficially own
approximately 34% of our common stock. Accordingly,
Mr. Moyes will have a significant

10



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##### Table of Contents



influence upon the activities of the Company, as
well as on all matters requiring approval of the stockholders,
including electing members of our Board of Directors and causing
or restricting the sale or merger of the Company. This
concentration of ownership, as well as the ability of the Board
to establish the terms of and issue our preferred stock without
stockholder approval, may have the effect of delaying or
preventing changes in control or management of the Company,
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 the
anticipated or actual results of our 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.

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##### 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, 2003 is derived
from our Consolidated Financial Statements. The selected
consolidated financial data for the years 2000 and 1999 has been
restated to include the financial position, results of
operations, and cash flows of M.S. Carriers (See Pooling of
Interests note to the financial statements). The Consolidated
Financial Statements as of December 31, 2003 and 2002, and
for each of the years in the three-year period ended
December 31, 2003 and the independent auditors report
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,                                            
|                                                      |                  |                                                                     
|                                                      |                  | 2003                                                                 |           | 2002   |  | 2001 |           | 2000   |  | 1999
|                                                      |                  |                                                                      |           |        |  |      |           |        |  |     
|                                                      |                  |                                                                     
|                                                      |                  | (Dollar Amounts in Thousands, Except per Share and per Mile Amounts)
|Consolidated Statements of Earnings
    Data:         |                  |                                                                      |           |        |  |      |           |        |  |      |           |        |  |   |           |        |  |   |           |       
|Operating revenue                                     |                  | $                                                                    | 2,397,655 |        |  | $    | 2,101,472 |        |  | $    | 2,112,221 |        |  | $ | 1,973,839 |        |  | $ | 1,688,954 |       
|Earnings before income taxes                          |                  | $                                                                    | 127,982   |        |  | $    | 96,108    |        |  | $    | 45,369    |        |  | $ | 110,014   |        |  | $ | 155,023   |       
|Net earnings                                          |                  | $                                                                    | 79,371    |        |  | $    | 59,588    |        |  | $    | 27,221    |        |  | $ | 68,943    |        |  | $ | 97,418    |       
|Diluted earnings per share                            |                  | $                                                                    | .94       |        |  | $    | .69       |        |  | $    | .32       |        |  | $ | .82       |        |  | $ | 1.12      |       
|Consolidated Balance Sheet Data (at end of
    year): |                  |                                                                      |           |        |  |      |           |        |  |      |           |        |  |   |           |        |  |   |           |       
|Working capital (deficit)                             |                  | $                                                                    | (24,289   | )      |  | $    | (69,599   | )      |  | $    | (24,299   | )      |  | $ | 29,426    |        |  | $ | 88,962    |       
|Total assets                                          |                  | $                                                                    | 1,820,943 |        |  | $    | 1,654,482 |        |  | $    | 1,556,096 |        |  | $ | 1,573,463 |        |  | $ | 1,390,107 |       
|Long-term obligations, less current portion           |                  | $                                                                    | 257,894   |        |  | $    | 183,470   |        |  | $    | 223,486   |        |  | $ | 377,056   |        |  | $ | 370,558   |       
|Stockholders equity                                  |                  | $                                                                    | 844,615   |        |  | $    | 765,778   |        |  | $    | 735,203   |        |  | $ | 654,879   |        |  | $ | 622,509   |       
|Operating Statistics (at end of
    year):            |                  |                                                                      |           |        |  |      |           |        |  |      |           |        |  |   |           |        |  |   |           |       
|Operating ratio                                       |                  |                                                                      | 94.1      | %      |  |      | 94.4      | %      |  |      | 95.9      | %      |  |   | 92.8      | %      |  |   | 89.7      | %     
|Pre-tax margin(1)                                     |                  |                                                                      | 5.3       | %      |  |      | 4.6       | %      |  |      | 2.1       | %      |  |   | 5.6       | %      |  |   | 9.2       | %     
|Average line haul revenue per loaded mile(2)          |                  | $                                                                    | 1.45      |        |  | $    | 1.41      |        |  | $    | 1.41      |        |  | $ | 1.39      |        |  | $ | 1.35      |       
|Deadhead percentage                                   |                  |                                                                      | 13.8      | %      |  |      | 14.1      | %      |  |      | 15.1      | %      |  |   | 14.1      | %      |  |   | 13.3      | %     
|Average length of haul (in miles)                     |                  |                                                                      | 529       |        |  |      | 552       |        |  |      | 571       |        |  |   | 582       |        |  |   | 616       |       
|Total tractors at end of period:                      |                  |                                                                      |           |        |  |      |           |        |  |      |           |        |  |   |           |        |  |   |           |       
|                                                      | Company-operated |                                                                      |           | 14,344 |  |      |           | 12,939 |  |      |           | 12,748 |  |   |           | 11,460 |  |   |           | 10,223 | 
|                                                      | Owner-operator   |                                                                      |           | 3,692  |  |      |           | 3,152  |  |      |           | 3,048  |  |   |           | 3,383  |  |   |           | 3,053  | 
|Trailers at end of period                             |                  |                                                                      | 50,489    |        |  |      | 48,233    |        |  |      | 45,729    |        |  |   | 43,411    |        |  |   | 38,088    |       



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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##### Table of Contents






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 Factors That
May Affect Future Results and Financial Condition.

OVERVIEW

We operate the largest fleet of truckload carrier
equipment in the United States. As part of the truckload segment
of the trucking industry, we transport freight for shippers in
large quantities who generally pay for our services based upon
the number of miles between pick-up and delivery. Our fleet of
tractors and trailers is as follows:

|                 |                |                    |        |        |        |      |        |        |        |  |        |        |        | 
|---------------- | -------------- | ------------------ | ------ | ------ | ------ | ---- | ------ | ------ | ------ |  | ------ | ------ | ------ | 
|                 |                |                   
|                 |                | As of December 31,
|                 |                |                   
|                 |                | 2003               |        | 2002   |        | 2001
|                 |                |                    |        |        |        |     
|Tractors:*       |                |                    |        |        |        |      |        |        |        |  |        |       
|                 | Company        |                    |        |        |        |      |        |        |        |  |        |        |       
|                 |                | Owned              |        |        | 9,339  |      |        |        | 7,350  |  |        |        | 6,685  | 
|                 |                | Leased             |        |        | 5,005  |      |        |        | 5,589  |  |        |        | 6,063  | 
|                 |                |                    |        |        |        |      |        |        |        |  |        |       
|                 |                | Total company      |        |        | 14,344 |      |        |        | 12,939 |  |        |        | 12,748 | 
|                 | Owner-operator |                    |        | 3,692  |        |      |        | 3,152  |        |  |        | 3,048  |       
|                 |                |                    |        |        |        |      |        |        |        |  |        |       
|                 | Total          |                    |        | 18,036 |        |      |        | 16,091 |        |  |        | 15,796 |       
|                 |                |                    |        |        |        |      |        |        |        |  |        |       
|Average tractors |                |                    | 15,969 |        |        |      | 15,276 |        |        |  | 15,313 |       
|                 |                |                    |        |        |        |      |        |        |        |  |        |       
|Trailers         |                |                    | 50,489 |        |        |      | 48,233 |        |        |  | 45,729 |       
|                 |                |                    |        |        |        |      |        |        |        |  |        |       



---



|  |                                                                                                                                                                                                                                                                                                
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Total tractors owned and leased includes 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.

Our tractors are either owned by us or financed
under leases. Our fleet has operated on a three-year cycle for
many years. Generally, we traded a tractor for a new tractor
every three years. After evaluating the 2002 tractor engines,
which were designed to conform to the emissions standards
mandated by the U.S. Environmental Protection Agency
(EPA) that became effective on October 1, 2002, we
have decided to operate the majority of our equipment for a
minimum of four years. Furthermore, we may operate some
equipment for five years depending upon mileage and use of the
equipment.

The owner-operators own their tractor and are
responsible for operating costs (for example fuel and
maintenance). The owner-operators operate under our authority
and are generally compensated based upon miles. We believe that
owner operators provide Swift with a noticeably higher return on
our invested assets because owner operators incur the cost of
acquiring their tractor, not Swift.

Trucking revenue is generated from freight hauled
by our fleet. There are three factors that significantly impact
our trucking revenue. First, as mentioned above, the truckload
industry in which we operate is generally compensated based upon
miles. Therefore, an increase in miles will increase the
revenue. We monitor utilization of our tractors in the form of
miles per tractor per week. The second factor is revenue per
mile. Increases in revenue per mile will increase revenue. We
monitor our revenue per mile on a daily basis. Finally, the
percentage of miles our tractors travel that do not generate
revenue, known as deadhead, will adversely affect revenue. We
monitor deadhead miles on a daily basis.

In addition to trucking revenue, our operating
revenue includes fuel surcharge revenue and other revenue
primarily for freight moved for our customers on rail or
purchased transportation.

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##### Table of Contents



We are also compensated, in some instances, for
accessorial charges such as loading and unloading freight for
our customers. The Department of Transportation
(DOT), recently revised their regulations to
increase the maximum daily drive time from 10 to 11 hours,
but no longer allow for breaks in the on-duty period. In
situations where productivity losses could occur as a result of
these regulations, we expect to seek compensation from the
shippers and in turn compensate our drivers and owner-operators
accordingly so as to maintain our existing pay structure. If we
are not successful in working with our shippers to adjust for
the impact these new regulations will have on our driver and
owner-operator productivity, it could have a negative impact on
our financial results. See Factors That May Affect Future
Results and Financial Conditions  Regulation
for information on this and other regulatory matters.

We believe our cost structure is evenly divided
between fixed costs, such as overhead and variable costs, such
as driver wages, purchased transportation and fuel. Therefore,
an increase in revenue will generally improve our financial
results through a reduction in our operating ratio.

We have communicated our goal to reduce our
operating ratio by 3% this year. Based on our current view of
the first quarter, we expect to fall significantly below our
improvement objective due to adverse weather, early retirement
charges, driver availability and higher fuel cost.

In 2003, our net earnings rose to
$79.4 million as trucking revenue increased 12% and we were
able to absorb more of our fixed costs.

In 2002, our net earnings increased to
$59.6 million. Although trucking revenue was down 1% from
2001, lower interest expense, the lack of integration
adjustments, and merger related synergies all contributed to our
rise in net earnings.

In the first quarter of 2004, we offered a
voluntary early retirement option to selected employees. This
program includes a severance payment, acceleration of stock
options and COBRA insurance coverage. We estimate the one time
pretax expense of this program, to be recognized in the first
quarter of 2004, will be approximately $3 million. Furthermore,
we expect to realize a reduction in salaries and benefits of
approximately $3 million annually.

CRITICAL ACCOUNTING ESTIMATES

Claims Accruals

We are self-insured for a portion of our
liability, property damage and cargo damage 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.

Revenue Recognition

Operating revenues and related direct costs are
recognized as of the date the freight is picked up for shipment.
M.S. Carriers (see Pooling of Interests note) recognized revenue
on the date freight was delivered. Beginning January 1,
2002, M.S. Carriers was operationally combined with us and
recognizes revenue on the date 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 discussed within EITF 91-9 due to our relatively short
length of haul.

We have discussed the methodology of these
accounting estimates with the audit committee of the Board of
Directors and the audit committee has reviewed our disclosure
relating to it in this Annual Report on Form 10-K.

14



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##### Table of Contents



POOLING OF INTERESTS

On June 29, 2001, we acquired M.S. Carriers
through the merger of a wholly-owned subsidiary with and into
M.S. Carriers (the Merger). The Merger has been
accounted for as a pooling of interests. Accordingly, all
historical financial data discussed below has been restated to
include the financial position, results of operations, and cash
flows of M.S. Carriers.

In addition, the results for 2001 include:



| |   |                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a $7 million increase to M.S. Carriers
    insurance and claims reserves;                                                                                                                                                                                                                                                           
|
| |  | a $10.5 million adjustment, of which
    $8.5 million relates to the impairment of our 50% equity
    investment held by M.S. Carriers in Transportes EASO, the
    largest intra-Mexico truckload carrier, and $2 million is
    associated with the write off of a cash advance made to EASO in
    the third quarter of 2001; and
|
| |  | a $4.0 million adjustment for the change in
    market value of the interest rate derivative agreements of M.S.
    Carriers.                                                                                                                                                                                                       

Prior to the merger, M.S. Carriers calculated a
range of claims reserves and recorded in their financial
statements an amount that they believed was appropriate. We
believed, based upon our experience with historical development
trends, it was more appropriate to record amounts at a higher
level within the range. Upon closing the merger with M.S.
Carriers, we completed our evaluation of the claims exposure of
M.S. Carriers and recorded a $7 million increase in this
accrual.

M.S. Carriers held the equity investment in
Transportes EASO prior to its merger with us. Nothing came to
our attention to indicate there was an impairment of this
investment during the acquisition process or the period
subsequent to the merger and prior to the August 2001 request
from Transportes EASO management for an advance to meet its cash
requirements. The $2 million cash advance to Transportes
EASO was made in August 2001. As a result of this advance, we
began an evaluation of this investment. Based upon our
evaluation, it was our determination that there had been a
significant decline in the value of EASO and that our investment
in it was impaired. Therefore, we adjusted the carrying value of
the investment.

RESULTS OF OPERATIONS FOR 2003, 2002 AND
2001

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

|                    |                                       |      |     |      |   |      |     |      |   |  |     |      |  
|------------------- | ------------------------------------- | ---- | --- | ---- | - | ---- | --- | ---- | - |  | --- | ---- | -
|                    |                                       | 2003 |     | 2002 |   | 2001
|                    |                                       |      |     |      |   |     
|Operating revenue   |                                       |      | 100 | %    |   |      | 100 | %    |   |  | 100 | %   
|Operating expenses: |                                       |      |     |      |   |      |     |      |   |  |     |     
|                    | Salaries, wages and employee benefits |      |     | 36.4 |   |      |     | 36.9 |   |  |     | 37.0 |  
|                    | Operating supplies and expenses       |      |     | 9.7  |   |      |     | 9.2  |   |  |     | 8.8  |  
|                    | Fuel                                  |      |     | 13.6 |   |      |     | 12.4 |   |  |     | 13.0 |  
|                    | Purchased transportation              |      |     | 17.4 |   |      |     | 17.1 |   |  |     | 17.3 |  
|                    | Rental expense                        |      |     | 3.4  |   |      |     | 4.1  |   |  |     | 4.7  |  
|                    | Insurance and claims                  |      |     | 3.9  |   |      |     | 4.1  |   |  |     | 4.5  |  
|                    | Depreciation and amortization         |      |     | 6.3  |   |      |     | 7.0  |   |  |     | 6.8  |  
|                    | Communications and utilities          |      |     | 1.2  |   |      |     | 1.3  |   |  |     | 1.4  |  
|                    | Operating taxes and licenses          |      |     | 2.2  |   |      |     | 2.3  |   |  |     | 2.4  |  
|                    |                                       |      |     |      |   |      |     |      |   |  |     |     
|                    | Total operating expenses              |      |     | 94.1 |   |      |     | 94.4 |   |  |     | 95.9 |  
|                    |                                       |      |     |      |   |      |     |      |   |  |     |     
|                    | Operating income                      |      |     | 5.9  |   |      |     | 5.6  |   |  |     | 4.1  |  
|                    | Net interest expense                  |      |     | .7   |   |      |     | .9   |   |  |     | 1.5  |  
|                    | Other (income) expense, net           |      |     | (.1  | ) |      |     | .1   |   |  |     | .5   |  
|                    |                                       |      |     |      |   |      |     |      |   |  |     |     
|                    | Earnings before income taxes          |      |     | 5.3  |   |      |     | 4.6  |   |  |     | 2.1  |  
|                    | Income taxes                          |      |     | 2.0  |   |      |     | 1.8  |   |  |     | .8   |  
|                    |                                       |      |     |      |   |      |     |      |   |  |     |     
|                    | Net earnings                          |      |     | 3.3  | % |      |     | 2.8  | % |  |     | 1.3  | %
|                    |                                       |      |     |      |   |      |     |      |   |  |     |     

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REVENUE

As discussed above, we believe there are three
factors that have a significant impact on our trucking revenue.
These three factors, along with operating revenue and its
components (dollars in thousands) are shown in the table below
for the last three years.

|                           |  |      |           |      |  |      |           |   |  |   |           |  
|-------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | -
|                           |  | 2003 |           | 2002 |  | 2001
|                           |  |      |           |      |  |     
|Trucking revenue           |  | $    | 2,207,928 |      |  | $    | 1,976,411 |   |  | $ | 1,992,907 |  
|Fuel surcharge revenue     |  |      | 88,865    |      |  |      | 37,817    |   |  |   | 59,449    |  
|Other revenue              |  |      | 100,862   |      |  |      | 87,244    |   |  |   | 59,865    |  
|                           |  |      |           |      |  |      |           |   |  |   |           |  
|Operating revenue          |  | $    | 2,397,655 |      |  | $    | 2,101,472 |   |  | $ | 2,112,221 |  
|                           |  |      |           |      |  |      |           |   |  |   |           |  
|Miles per tractor per week |  |      | 2,123     |      |  |      | 2,049     |   |  |   | 2,084     |  
|Revenue per loaded mile    |  | $    | 1.4524    |      |  | $    | 1.4141    |   |  | $ | 1.4144    |  
|Deadhead percentage        |  |      | 13.76     | %    |  |      | 14.14     | % |  |   | 15.12     | %

Our trucking revenue increased by approximately
12% in 2003 compared to 2002 and decreased 1% in 2002 compared
to 2001. In 2003, we improved our utilization, revenue per
loaded mile and deadhead percentage. Our acquisition of Merit
Distribution Services, Inc. accounted for 3% of this
increase in 2003. Services provided to our largest customer,
Wal-Mart, generated 12% of our revenue in 2003.

Comparing 2002 to 2001, the improvement in
deadhead percentage was offset by a decrease in utilization. We
began 2002 with approximately 650 trucks without drivers. The
number of trucks without drivers decreased throughout 2002 and
we ended the year with approximately 150 trucks without drivers.

Other revenue increased in both 2003 and 2002
primarily due to an increase in freight moved for our customers
on rail and third party carriers for our customers.

OPERATING EXPENSES

Our most significant operating costs are
salaries, wages and employee benefits, fuel and purchased
transportation. Our salaries, wages and employee benefits were
36.4%, 36.9% and 37% of operating revenue in 2003, 2002 and
2001, respectively. The percentage was fairly consistent after
adjusting for fuel surcharge revenue, 37.8% in 2003 and 37.6% in
2002. The percentage decreased slightly in 2002 when compared to
2001 as we experienced some driver attrition that was offset by
an increase in workers compensation costs. Our deductible
amount for workers compensation rose from zero to
$350,000 per incident in 2002. In 2003, this deductible
amount for workers compensation rose from $350,000 to
$500,000 per incident. The deductible will rise in 2004 to
$3,000,000, however, 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 has historically 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.

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Fuel was 13.6%, 12.4% and 13.0% of operating
revenue in 2003, 2002 and 2001, respectively. This percentage is
primarily affected by fuel prices. Fuel as a percentage of
revenue is directly related to our average fuel cost per gallon,
which was $1.39, $1.21 and $1.28, in 2003, 2002 and 2001,
respectively.

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.

Purchased transportation was 17.4%, 17.1% and
17.3% of operating revenue in 2003, 2002 and 2001, respectively.
This percentage increased in 2003 as our owner operator fleet
has increased from 3,048 at December 31, 2001 to 3,692 at
December 31, 2003 and our use of rail increased.

Operating supplies and expenses was 9.7%, 9.2%
and 8.8% of operating revenue in 2003, 2002 and 2001,
respectively, as we experienced an increase in maintenance
costs. This anticipated increase resulted from our extensions of
the life of some of our tractors into the fourth year beginning
in late 2002, which increased maintenance costs. This increase
is offset by a reduction in depreciation expense discussed below.

Insurance and claims was 3.9%, 4.1% and 4.5% of
operating revenue in 2003, 2002 and 2001, respectively. The year
ended December 31, 2001 includes a $7 million increase
to M.S. Carriers insurance and claims reserves and
$4.1 million of increased insurance premiums, with the same
coverage, over the prior year.

As discussed under Critical Accounting Estimates,
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. This increase in our deductible was a part of the
settlement agreement between us and our insurance company that
is discussed in the following paragraph. We believe that the
benefits we will receive from the insurance settlement outweigh
that the additional costs that will result from a higher
deductible. 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.

As we discussed in the notes to our financial
statements, we entered into a settlement agreement with our
insurance company that carries a portion of our transportation
liability insurance. 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 our
releasing all claims that were the subject of the litigation. We
have been recognizing this settlement amount as a reduction of
insurance expense as the insurance coverage is 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 are being amortized on a
straight-line basis over the thirty-month period beginning
July 1, 2002. In the event that we do not receive the
future insurance coverage due to the liquidation,
rehabilitation, bankruptcy or other similar insolvency of the
insurers, we will receive a reimbursement of our legal expenses
on a declining basis ranging from $15.8 million through
December 15, 2002 to $3.9 million through July 1,
2004.

Rental expense was 3.4%, 4.1% and 4.7% of
operating revenue in 2003, 2002 and 2001, respectively. This
decrease is primarily due to a decrease in our average cost per
leased tractor and a decrease in the number of tractors on lease.

Depreciation and amortization expense was 6.3%,
7.0% and 6.8% of operating revenue in 2003, 2002 and 2001. The
decrease in 2003 is primarily due to the extension of the life
of some of our tractors into the fourth year. At the acquisition
date of tractors, we estimate the expected life and depreciate
the cost over this expected life to the expected residual value.
Historically, for most of our tractors, the expected life is
three years. When we chose to extend the life an additional
year, the depreciation for that additional year is equal to the
change in the expected residual value. As with most depreciating
assets, the loss in value in later years is less when compared
to the earlier years of an assets life.

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When it is economically advantageous to do so, we
will purchase and then resell tractors that we currently lease
by exercising a purchase option contained in the lease. Gains on
these activities are recorded as a reduction of rental expense.
We also generate gains from the sale of tractors we own. These
gains are recorded as a reduction of depreciation expense. These
gains are summarized below.

|                                |  |                |       |      |  |      |       |  |  |   |       | 
|------------------------------- |  | -------------- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|                                |  | 2003           |       | 2002 |  | 2001
|                                |  |                |       |      |  |     
|                                |  |               
|                                |  | (In thousands)
|Gain on sale of leased tractors |  | $              | 247   |      |  | $    | 1,817 |  |  | $ | 338   | 
|Gain on sale of owned tractors  |  | $              | 1,464 |      |  | $    | 4,356 |  |  | $ | 1,600 | 

OTHER EXPENSES

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 $419 million,
$402 million and $401 million at December 31,
2003, 2002 and 2001, respectively.

As shown below, our interest expense, net of the
impact of the derivative agreements, increased in 2003. In June
2003, we completed our private placement of Senior Notes, which
have a weighted average interest rate of 4%. Although this fixed
rate is currently higher than our variable rate debt, these
Senior Notes provide us with strategic capital with five and
seven year maturities. We also benefited in 2003 from lower
interest rates and a shift in borrowings from more costly debt
related to capital leases, entered into under M.S. Carriers, to
less costly Swift debt.

Our interest expense decreased in 2002 as we
shifted to lower cost borrowings and interest rates declined.

|                                               |  |                |        |      |  |      |        |   |  |   |        |  
|---------------------------------------------- |  | -------------- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                               |  | 2003           |        | 2002 |  | 2001
|                                               |  |                |        |      |  |     
|                                               |  |               
|                                               |  | (In thousands)
|Interest expense                               |  | $              | 16,202 |      |  | $    | 21,979 |   |  | $ | 33,393 |  
|(Increase) decrease in derivative agreements   |  |                | 2,084  |      |  |      | (5,897 | ) |  |   | (4,050 | )
|                                               |  |                |        |      |  |      |        |   |  |   |        |  
|Interest expense, net of derivative agreements |  | $              | 18,286 |      |  | $    | 16,082 |   |  | $ | 29,343 |  
|                                               |  |                |        |      |  |      |        |   |  |   |        |  

Included in other (income) expense are the equity
earnings of Transplace and Tran-Mex. An additional nonrecurring
charge of $1.3 million within the earnings of our equity
investment in Transplace was recorded in 2002. Other expense in
2001 included an $8.5 million adjustment for the impairment
of the 50% equity investment held by M.S. Carriers in
Transportes EASO, and the equity loss of $3.0 million for
Transplace.

Our effective tax rate was 38%, 38% and 40% in
2003, 2002 and 2001, respectively. The higher rate in 2001 was
primarily due to the nondeductible portion ($5.2 million)
of the EASO impairment adjustment.

LIQUIDITY AND CAPITAL RESOURCES

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

|                                                        |  |                |          |      |  |      |          |   |  |   |          |  
|------------------------------------------------------- |  | -------------- | -------- | ---- |  | ---- | -------- | - |  | - | -------- | -
|                                                        |  | 2003           |          | 2002 |  | 2001
|                                                        |  |                |          |      |  |     
|                                                        |  |               
|                                                        |  | (In thousands)
|Net cash provided by operating activities               |  | $              | 287,889  |      |  | $    | 266,716  |   |  | $ | 262,937  |  
|Net cash used in investing activities                   |  | $              | (287,969 | )    |  | $    | (235,547 | ) |  | $ | (155,154 | )
|Net cash (used in) provided by financing
    activities |  | $              | 11,205   |      |  | $    | (37,930  | ) |  | $ | (113,270 | )

The increase in our net earnings in 2003 was the
primary driver of our increase in cash provided by operating
activities. In 2002, our cash provided by operating activities
increased slightly compared to 2001, despite a substantial
increase in net earnings primarily because our accounts
receivable increased by a comparable amount.

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
$223 million, $219 million and $165 million in
2003,

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2002 and 2001, respectively. In addition, we
expended $81.6 million for the purchase of Merit
Distribution, Inc. in 2003 and we made loans to investment
entities totaling $16 million in 2002.


Regarding our financing activities, in 2003 we
issued $200 million of Senior Notes and repaid
$185 million of debt, net of borrowings under the line of
credit (including capital leases and securitization). Also, we
repurchased $18.9 million and $52 million of our
common stock in 2003 and 2002. In addition, we received
$13.9 million and $13.6 million in stock option
exercise and employee stock purchase plan proceeds in 2003 and
2002, respectively.

In 2001, we repaid a total of $161 million
of long-term debt, capital leases and borrowings under revolving
credit agreement and received $20 million from our public
stock offering and $27 million from issuance of stock to
our employees.

As of December 31, 2003 and 2002 we had a
working capital deficit of $24.3 million and
$69.6 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.

As of December 31, 2003, we had
$30 million of borrowings and $103 million of letters
of credit outstanding on our $300 million line of credit,
leaving $167 million available. 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 62.5 to 137.5 basis points, as defined in the
Credit Agreement (currently 70 basis points). The unused
portion of the line of credit is subject to a commitment fee
ranging from 17.5 to 25 basis points (currently
20 basis points). The Credit Agreement requires us to meet
certain covenants with respect to leverage and fixed charge
coverage ratios and tangible net worth. The Credit Agreement
also requires us to maintain unencumbered assets of not less
than 120% of indebtedness (as defined).

Our accounts receivable securitization allows us
to sell up to $200 million of our eligible trade accounts
receivable to a financial institution. As of December 31,
2003, we had received sales proceeds of $142 million. Under
the terms of our agreement, 65% of our trade receivables
collateralize the securitization arrangement as of
December 31, 2003.

As of December 31, 2003, we had commitments
outstanding to acquire replacement and additional revenue
equipment for approximately $379 million. We have the
option to cancel such commitments upon 60 days notice. We
believe we will be able to support these acquisitions of revenue
equipment through debt and lease financings and cash flows
generated by operating activities. We historically have had a
three-year replacement program on the majority of our line-haul
tractors. After evaluating the 2002 tractor engines, which were
designed to conform to the emissions standards mandated by the
U.S. Environmental Protection Agency (EPA) that became
effective on October 1, 2002, we have decided to operate
the majority of our equipment for a period of four years.
Furthermore, we may operate some equipment for five years
depending upon mileage and use of the equipment. This change has
caused a deferral of our revenue equipment purchases during the
past two years.

During the year ended December 31, 2003, we
incurred approximately $76.8 million of non-revenue
equipment capital expenditures. These expenditures were
primarily for facilities, facilities-related improvements and
equipment.

We anticipate that we will expend approximately
$39 million in 2004 for various facilities upgrades and
acquisition and development of terminal facilities. Factors such
as costs and opportunities for future terminal expansions may
change the amount of such expenditures.

We believe we will be able to finance needs for
working capital, facilities improvements and expansion, as well
as anticipated fleet growth, with cash flows from operations,
borrowings available under the line of credit,

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accounts receivable securitization and with
long-term debt and lease financing believed to be available to
finance revenue equipment purchases. 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.


SAFETY RATING UPDATE

Our safety rating has always been and continues
to be satisfactory, the highest rating given by Federal Motor
Carrier Safety Administration (FMCSA). An October 2003
compliance review by the Arizona division of the FMCSA has
resulted in a proposed safety rating of conditional. We have
been in discussions with the FMCSA about the proposed rating and
filed a petition for a stay of the effective date of the
proposed safety rating pending a review as provided for under
the FMCSA regulations. Our petition for a stay was granted by
the FMCSA on December 18, 2003 and the Arizona division of
the FMCSA was ordered to respond to Swifts petition for
review. We received this response on January 19, 2004 and
submitted our reply on February 5, 2004.

Although the scope of the compliance review
involved many areas within the authority of the FMCSA, there is
only one issue in dispute. This area involves the accuracy of
the documentation of driving logs maintained by our drivers and
owner operators.

We anticipate a positive outcome. We have always
maintained safety as a top priority and have a comprehensive
internal audit program for review of driver log compliance. In
addition, we regulate the speed of our tractors and vigorously
enforce a company speed limit that is lower than many state
speed limits. No operational safety issues have been raised by
the FMCSA compliance review.

There are three safety ratings assigned to motor
carriers: satisfactory, which we have historically
maintained; 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.

Even when a carrier temporarily drops to
conditional status, it does not lose its carrier authority or
ability to transport hazardous materials. Federal regulations do
not preclude a carrier from transporting hazardous materials
unless the carrier has an unsatisfactory safety rating. There
are, however, certain standard industry provisions in our
contracts with our customers that could allow a customer to
reduce or terminate its relationship with us if we do not have a
satisfactory rating. In addition, there is a
possibility that conditional rating could affect our
ability to self-insure for personal injury and property damage
claims relating to the transportation of freight which could
increase our cost of insurance.

Based upon internal data, external data, and
consultation with our regulatory counsel, we believe that if our
rating were changed to conditional, it would be temporary and
any loss of revenue would not be material.

OFF-BALANCE SHEET ARRANGEMENTS

As discussed in the Commitments note to the
financial statements, we have guaranteed certain financing
arrangements of Trans-Mex in which we hold equity interests.
These guarantees were issued to assist Trans-Mex when entering
into its financing arrangements. In January 2004, we completed
an acquisition of an additional 51% interest in Trans-Mex. After
this acquisition, we own 100% of this company and as a result it
will be consolidated in our 2004 financial statements.
Furthermore, 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 over the fair
market value, if any. The maximum potential amount of future
payments the Company would be required to make under these
guarantees is $101 million, although management does not believe
it is likely that we will ultimately be required to fund any
material amount of these guarantees. The Company utilizes
operating leases as an additional financing source.

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##### Table of Contents



CONTRACTUAL OBLIGATIONS

The tables below summarize our contractual
obligations as of December 31, 2003:

|                              |                                   |                        |         |           |  |           |        |           |  |         |         |     |  |   |         |       |  |   |         |       | 
|----------------------------- | --------------------------------- | ---------------------- | ------- | --------- |  | --------- | ------ | --------- |  | ------- | ------- | --- |  | - | ------- | ----- |  | - | ------- | ----- | 
|                              |                                   |                       
|                              |                                   | Payments Due by Period
|                              |                                   |                       
|                              |                                   |                        |         | Less Than |  |           |        | More Than
|                              |                                   | Total                  |         | 1 Year    |  | 1-3 Years |        | 4-5 Years |  | 5 Years
|                              |                                   |                        |         |           |  |           |        |           |  |        
|Long-Term Debt(1)             |                                   | $                      | 241,420 |           |  | $         | 4,573  |           |  | $       | 36,847  |     |  | $ | 100,000 |       |  | $ | 100,000 |      
|Capital Lease Obligations     |                                   |                        | 35,094  |           |  |           | 14,047 |           |  |         | 21,047  |     |  |   |         |       |  |   |         |      
|Operating Leases(2)           |                                   |                        | 171,284 |           |  |           | 67,598 |           |  |         | 79,887  |     |  |   | 23,684  |       |  |   | 115     |      
|Purchase Obligations          |                                   |                        | 31      |           |  |           | 31     |           |  |         |         |     |  |   |         |       |  |   |         |      
|Other Long-Term Obligations:  |                                   |                        |         |           |  |           |        |           |  |         |         |     |  |   |         |       |  |   |         |      
|                              | Fair value of interest rate swaps |                        |         | 7,863     |  |           |        |           |  |         |         | 221 |  |   |         | 5,614 |  |   |         | 2,028 | 
|                              |                                   |                        |         |           |  |           |        |           |  |         |         |     |  |   |         |       |  |   |         |      
|Total Contractual Obligations |                                   | $                      | 455,692 |           |  | $         | 86,249 |           |  | $       | 138,002 |     |  | $ | 129,298 |       |  | $ | 102,143 |      
|                              |                                   |                        |         |           |  |           |        |           |  |         |         |     |  |   |         |       |  |   |         |      



---



|    |                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | We expect to refinance the $30 million line
    of credit included in Long-Term Debt upon maturity.                                                                                                    
|   
|(2) | 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.
|   
|(3) | Deferred taxes and long-term portion of claims
    accruals are excluded from Other Long-Term Obligations in the
    table above.                                                                      
|   
|(4) | The table excludes purchase commitments for
    revenue equipment which are cancellable.                                                                                                               

SUBSEQUENT EVENT  ACQUISITION OF
TRANS-MEX, INC

We completed the acquisition of an additional 51%
interest in Trans-Mex, Inc. S.A. de C.V. in January 2004.
After this acquisition, we own 100% of this Mexican truckload
carrier. The purchase price for this 51% interest was
$31 million consisting of $11 million in cash and
942,155 shares of common stock. We have agreed to file a
registration statement with the Securities and Exchange
Commission for these shares within the next 90 days.
Trans-Mex is one of the top five international trucking
companies operating in Mexico. Through this acquisition, we
become the only United States trucking company with a 100%
ownership interest in a Mexican carrier. We utilize Trans-Mex as
a provider of freight services for our customers and we paid
Trans-Mex $23.7 million in 2003, which is included in
purchase transportation on the consolidated financial statements.

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.

FACTORS THAT MAY AFFECT FUTURE RESULTS AND
FINANCIAL CONDITION

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.

General Economic and Business
Factors.Our business is dependent
upon a number of factors that may have a material adverse effect
on our results of operations, many of which are beyond our
control. These factors include excess capacity in the trucking
industry and significant increases or rapid fluctuations in fuel
prices, interest rates, fuel taxes, tolls, license and
registration fees and insurance and claims costs, to the extent
not offset by increases in freight rates or fuel surcharges. The
results of operations also are affected by

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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. In
addition, the 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, which causes
higher fuel consumption from increased idle time.


Competition.The
trucking industry is extremely competitive and fragmented. We
compete with many other truckload carriers of varying sizes and,
to a lesser extent, with railroads. There are some trucking
companies with which we compete that have greater financial
resources and carry a larger volume of freight.

Capital
Requirements.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 growth.

Difficulty In Attracting Drivers Could Affect
Our Profitability And Ability To Grow.Periodically, the trucking industry experiences substantial
difficulty in attracting and retaining qualified drivers,
including independent contractors. If we are unable to continue
to attract drivers or contract with independent contractors, we
could be required to adjust our driver compensation package or
let trucks sit idle, which could adversely affect our growth and
profitability.

Acquisitions.Our
growth has been dependent, in part, upon the acquisition of
trucking companies throughout the United States. To date, we
have been successful in identifying trucking companies to
acquire and in integrating such companies operations into
our operations. We may face competition from transportation
companies or other third parties for acquisition opportunities
that become available. There can be no assurance that we will
identify acquisition candidates that will result in successful
combinations in the future. Any future acquisitions by us may
result in the incurrence of additional debt, which could
adversely affect our profitability, or could involve the
potentially dilutive issuance of additional equity securities.
In addition, acquisitions involve numerous risks, including
difficulties in assimilation of the acquired companys
operations particularly in the period immediately following the
consummation of such transactions, the diversion of the
attention of management from other business, and the potential
loss of customers, key employees and drivers of the acquired
company, all of which could have a material adverse effect on
our business and operating results.

Dependence on Key
Personnel.Many of our executive
officers are key to the management of our business and
operations. Our future success depends on our ability to retain
these 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, we may not be able to retain and recruit talented
personnel without incurring substantial costs.

Regulation.We are
regulated by the United States Department of Transportation.
This regulatory authority exercises broad powers, generally
governing activities such as authorization to engage in motor
carrier operations, safety, financial reporting, and certain
mergers, consolidations and acquisitions. We may also become
subject to new or more comprehensive or restrictive regulations
relating to fuel emissions and ergonomics. The increased cost of
complying with such regulations could have a material adverse
effect on our business and operating results.

Recently, a compliance review by the Arizona
division of the Federal Motor Carrier Safety Division
(FMSCA) resulted in a proposed rating status for Swift of
conditional. There are three possible ratings
assigned by FMSCA: satisfactory, conditional and unsatisfactory.
The proposed drop in our rating status relates to the accuracy
of the documentation of driving logs maintained by our drivers
and owner operators. We have appealed this rating and petitioned
FMSCA for a review of our rating status. Until this review is
complete, our the conditional rating is stayed and our rating
remains satisfactory. If FMSCA ultimately determines
our safety rating to be conditional 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 hazardous materials,
certain industry standard provisions in our contracts with our
customers could allow the customer to reduce or

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##### Table of Contents



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.


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 stormwater 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, it could have
a material adverse effect on our business and operating results.

In January 2004, the Department of Transportation
adopted new regulations concerning the maximum number of hours
of service that commercial truck drivers may operate. The
revised regulations increased the maximum daily drive time from
10 to 11 hours, but no longer allow for breaks in the on
on-duty period. These changes could reduce the time that a
driver is available to drive as a result of the calculation of
the on-duty period and productivity losses could occur with
respect to our business. If we are unsuccessful in working with
our shippers to adjust for the impact of these new regulations,
it could have a negative impact on our financial results.

Used Equipment
Market.We rely on the sale of used
equipment to offset the cost of purchasing new equipment. In the
past three years, used tractor values have deteriorated
significantly. Should this trend continue, it could have a
material adverse effect on our business and operating results.

Claims Exposure;
Insurance.We currently 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. 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, would reduce our
profitability.

Dependence on Key
Customers.A significant portion of
our revenue is generated from key customers. During 2003, our
top 25, 10 and 5 customers accounted for 55%, 39% and 30% of
revenues, respectively. Our largest customer, Wal-Mart accounted
for 12% of our revenues in 2003. 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.






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

We have interest rate exposure arising from the
line of credit ($30 million), variable rate capital lease
obligations ($18 million) and the accounts receivable
securitization ($142 million), all of which have variable
interest rates. These variable interest rates are impacted by
changes in short-term interest rates. We manage interest rate
exposure through a mix of variable rate debt, fixed rate lease
financing and $70 million notional amount of interest rate
swaps (weighted average rate of 5.88%). The fair value of our
long-term debt approximates carrying values. Assuming the
current level of borrowings, a hypothetical one-percentage point
increase in interest rates would increase our interest expense
by $1.2 million.






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

Our Consolidated Financial Statements of the
Company as of December 31, 2003 and 2002 for each of the
years in the three-year period ended December 31, 2003,
together with related notes and the report of KPMG LLP,
independent certified public accountants, 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.

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##### Table of Contents



INDEPENDENT AUDITORS REPORT

The Board of Directors

Swift Transportation Co., Inc.:


We have audited the accompanying consolidated
balance sheets of Swift Transportation Co., Inc. and
subsidiaries as of December 31, 2003 and 2002, 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, 2003.
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
auditing standards generally accepted in the United States of
America. 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, 2003 and
2002, and the results of their operations and their cash flows
for each of the years in the three-year period ended
December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America.



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

Phoenix, Arizona

January 27, 2004


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SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |           |         |           | 
|----------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ------------------------------------------------------- | ---------------------------- | --------- | ------- | --------- | --------- | --------- | ------- | --------- | 
|                                                                                                                                                      |                                       |                                                        
|                                                                                                                                                      |                                       | December 31,                                           
|                                                                                                                                                      |                                       |                                                        
|                                                                                                                                                      |                                       | 2003                                                    |                              | 2002     
|                                                                                                                                                      |                                       |                                                         |                              |          
|                                                                                                                                                      |                                       |                                                        
|                                                                                                                                                      |                                       | (In thousands, except                                  
|                                                                                                                                                      |                                       | share data)                                            
|ASSETS                                                                                                                                               
|Current assets:                                                                                                                                       |                                       |                                                         |                              |           |         |           |           |          
|                                                                                                                                                      | Cash                                  |                                                         | $                            | 19,055    |         |           | $         | 7,930     |        
|                                                                                                                                                      | Accounts receivable, net              |                                                         |                              | 289,924   |         |           |           | 272,545   |        
|                                                                                                                                                      | Equipment sales receivables           |                                                         |                              | 5,998     |         |           |           | 11,100    |        
|                                                                                                                                                      | Inventories and supplies              |                                                         |                              | 17,570    |         |           |           | 16,031    |        
|                                                                                                                                                      | Prepaid taxes, licenses and insurance |                                                         |                              | 21,851    |         |           |           | 19,021    |        
|                                                                                                                                                      | Assets held for sale                  |                                                         |                              |           |         |           |           | 8,274     |        
|                                                                                                                                                      | Deferred income taxes                 |                                                         |                              | 3,133     |         |           |           | 2,262     |        
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|                                                                                                                                                      |                                       |                                                         | Total current assets         |           |         | 357,531   |           |           |         | 337,163   | 
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|Property and equipment, at cost:                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|                                                                                                                                                      | Revenue and service equipment         |                                                         |                              | 1,580,581 |         |           |           | 1,476,183 |        
|                                                                                                                                                      | Land                                  |                                                         |                              | 70,107    |         |           |           | 47,855    |        
|                                                                                                                                                      | Facilities and improvements           |                                                         |                              | 259,379   |         |           |           | 213,421   |        
|                                                                                                                                                      | Furniture and office equipment        |                                                         |                              | 76,897    |         |           |           | 70,315    |        
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|                                                                                                                                                      |                                       |                                                         | Total property and equipment |           |         | 1,986,964 |           |           |         | 1,807,774 | 
|Less accumulated depreciation and amortization                                                                                                        |                                       |                                                         | 636,059                      |           |         |           | 548,937   |          
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|                                                                                                                                                      |                                       |                                                         | Net property and equipment   |           |         | 1,350,905 |           |           |         | 1,258,837 | 
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|Investment in Transplace                                                                                                                              |                                       |                                                         | 3,079                        |           |         |           | 4,282     |          
|Notes receivable from Trans-Mex                                                                                                                       |                                       |                                                         | 15,166                       |           |         |           | 11,649    |          
|Deferred legal fees                                                                                                                                   |                                       |                                                         | 8,416                        |           |         |           | 16,892    |          
|Other assets                                                                                                                                          |                                       |                                                         | 21,078                       |           |         |           | 16,759    |          
|Customer relationship intangible, net                                                                                                                 |                                       |                                                         | 39,535                       |           |         |           |           |          
|Goodwill                                                                                                                                              |                                       |                                                         | 25,233                       |           |         |           | 8,900     |          
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|                                                                                                                                                      |                                       | $                                                       | 1,820,943                    |           |         | $         | 1,654,482 |          
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|LIABILITIES AND STOCKHOLDERS
    EQUITY                                                                                                             
|Current liabilities:                                                                                                                                  |                                       |                                                         |                              |           |         |           |           |          
|                                                                                                                                                      |                                       | Accounts payable                                        |                              | $         | 63,898  |           |           | $         | 53,192  |          
|                                                                                                                                                      |                                       | Accrued liabilities                                     |                              |           | 68,509  |           |           |           | 52,161  |          
|                                                                                                                                                      |                                       | Current portion of claims accruals                      |                              |           | 86,637  |           |           |           | 83,188  |          
|                                                                                                                                                      |                                       | Current portion of long-term debt                       |                              |           | 4,573   |           |           |           | 3,389   |          
|                                                                                                                                                      |                                       | Current portion of obligations under capital
    leases |                              |           | 14,047  |           |           |           | 45,832  |          
|                                                                                                                                                      |                                       | Fair value of operating lease guarantees                |                              |           | 2,156   |           |           |           |         |          
|                                                                                                                                                      |                                       | Securitization of accounts receivable                   |                              |           | 142,000 |           |           |           | 169,000 |          
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|                                                                                                                                                      |                                       |                                                         | Total current liabilities    |           |         | 381,820   |           |           |         | 406,762   | 
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|Borrowings under revolving credit agreement                                                                                                           |                                       |                                                         | 30,000                       |           |         |           | 136,400   |          
|Senior Notes                                                                                                                                          |                                       |                                                         | 200,000                      |           |         |           |           |          
|Long-term debt, less current portion                                                                                                                  |                                       |                                                         | 6,847                        |           |         |           | 9,387     |          
|Obligations under capital leases                                                                                                                      |                                       |                                                         | 21,047                       |           |         |           | 37,683    |          
|Claims accruals, less current portion                                                                                                                 |                                       |                                                         | 73,800                       |           |         |           | 65,011    |          
|Deferred income taxes                                                                                                                                 |                                       |                                                         | 254,951                      |           |         |           | 223,514   |          
|Fair value of interest rate swaps                                                                                                                     |                                       |                                                         | 7,863                        |           |         |           | 9,947     |          
|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 91,379,776 and
    90,182,273 shares in 2003 and 2002, respectively |                                       |                                                         | 91                           |           |         |           | 90        |          
|Additional paid-in capital                                                                                                                            |                                       |                                                         | 291,095                      |           |         |           | 272,099   |          
|Retained earnings                                                                                                                                     |                                       |                                                         | 662,851                      |           |         |           | 583,480   |          
|Treasury stock, at cost (7,438,077 and
    6,237,077 shares in 2003 and 2002, respectively)                                                           |                                       |                                                         | (108,760                     | )         |         |           | (89,891   | )        
|Accumulated other comprehensive income and other                                                                                                      |                                       |                                                         | (662                         | )         |         |           |           |          
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|                                                                                                                                                      |                                       |                                                         | Total stockholders equity   |           |         | 844,615   |           |           |         | 765,778   | 
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          
|Commitments and contingencies (Notes 17 and
    28)                                                                                                   |                                       |                                                         |                              |           |         |           |           |          
|                                                                                                                                                      |                                       | $                                                       | 1,820,943                    |           |         | $         | 1,654,482 |          
|                                                                                                                                                      |                                       |                                                         |                              |           |         |           |           |          

See accompanying notes to consolidated financial
statements.

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SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |         |           | 
|-------------------------- | ------------------------------------- | --------------------------------- | --------- | ------- | --------- | ---- | --------- | ------- | --------- | - | --------- | ------- | --------- | 
|                           |                                       |                                  
|                           |                                       | Years Ended December 31,         
|                           |                                       |                                  
|                           |                                       | 2003                              |           | 2002    |           | 2001
|                           |                                       |                                   |           |         |           |     
|                           |                                       |                                  
|                           |                                       | (In thousands, except share data)
|Operating revenue          |                                       | $                                 | 2,397,655 |         |           | $    | 2,101,472 |         |           | $ | 2,112,221 |        
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|Operating expenses:        |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           | Salaries, wages and employee benefits |                                   |           | 872,453 |           |      |           | 776,206 |           |   |           | 782,222 |          
|                           | Operating supplies and expenses       |                                   |           | 233,148 |           |      |           | 192,633 |           |   |           | 185,698 |          
|                           | Fuel                                  |                                   |           | 326,749 |           |      |           | 260,569 |           |   |           | 274,752 |          
|                           | Purchased transportation              |                                   |           | 417,182 |           |      |           | 358,871 |           |   |           | 365,596 |          
|                           | Rental expense                        |                                   |           | 82,405  |           |      |           | 86,166  |           |   |           | 99,387  |          
|                           | Insurance and claims                  |                                   |           | 94,685  |           |      |           | 86,078  |           |   |           | 93,654  |          
|                           | Depreciation and amortization         |                                   |           | 150,602 |           |      |           | 147,401 |           |   |           | 144,312 |          
|                           | Communications and utilities          |                                   |           | 28,149  |           |      |           | 27,473  |           |   |           | 28,221  |          
|                           | Operating taxes and licenses          |                                   |           | 51,241  |           |      |           | 48,936  |           |   |           | 50,755  |          
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           |                                       | Total operating expenses          |           |         | 2,256,614 |      |           |         | 1,984,333 |   |           |         | 2,024,597 | 
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           |                                       | Operating income                  |           |         | 141,041   |      |           |         | 117,139   |   |           |         | 87,624    | 
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|Other (income) expenses:   |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           | Interest expense                      |                                   |           | 16,202  |           |      |           | 21,979  |           |   |           | 33,393  |          
|                           | Interest income                       |                                   |           | (770    | )         |      |           | (2,353  | )         |   |           | (1,200  | )        
|                           | Other                                 |                                   |           | (2,373  | )         |      |           | 1,405   |           |   |           | 10,062  |          
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           |                                       | Other (income) expenses, net      |           |         | 13,059    |      |           |         | 21,031    |   |           |         | 42,255    | 
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           |                                       | Earnings before income taxes      |           |         | 127,982   |      |           |         | 96,108    |   |           |         | 45,369    | 
|                           | Income taxes                          |                                   |           | 48,611  |           |      |           | 36,520  |           |   |           | 18,148  |          
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           |                                       | Net earnings                      |           | $       | 79,371    |      |           | $       | 59,588    |   |           | $       | 27,221    | 
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|Basic earnings per share   |                                       | $                                 | .95       |         |           | $    | .70       |         |           | $ | .32       |        
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|Diluted earnings per share |                                       | $                                 | .94       |         |           | $    | .69       |         |           | $ | .32       |        
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        

See accompanying notes to consolidated financial
statements.

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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME

|                          |                                                                                                        |                          |        |      |   |      |        |  |  |   |        |  | 
|------------------------- | ------------------------------------------------------------------------------------------------------ | ------------------------ | ------ | ---- | - | ---- | ------ |  |  | - | ------ |  | 
|                          |                                                                                                        |                         
|                          |                                                                                                        | Years Ended December 31,
|                          |                                                                                                        |                         
|                          |                                                                                                        | 2003                     |        | 2002 |   | 2001
|                          |                                                                                                        |                          |        |      |   |     
|                          |                                                                                                        |                         
|                          |                                                                                                        | (In thousands)          
|Net earnings              |                                                                                                        | $                        | 79,371 |      |   | $    | 59,588 |  |  | $ | 27,221 | 
|Other comprehensive loss: |                                                                                                        |                          |        |      |   |      |        |  |  |   |        | 
|                          | 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 $26 |                          |        | 44   |   |      |        |  |  |   |        |  | 
|                          |                                                                                                        |                          |        |      |   |      |        |  |  |   |        | 
|Comprehensive income      |                                                                                                        | $                        | 78,709 |      |   | $    | 59,588 |  |  | $ | 27,221 | 
|                          |                                                                                                        |                          |        |      |   |      |        |  |  |   |        | 

See accompanying notes to consolidated financial
statements.

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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY

|                                                                                  |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   |         |        | 
|--------------------------------------------------------------------------------- | ----------------------------- | --------------------------------- | ---------- | ---------- |  | -------- | -- | -------- |  | ------------- | ------- | ---------------- |  | ------ | ------- | ------ |  | - | -------- | - |  | - | ------ | - |  | - | ------- | ------ | 
|                                                                                  |                               |                                   |            |            |  |          |    |          |  | Accumulated   |         |                 
|                                                                                  |                               | Common Stock                      |            | Additional |  |          |    |          |  | Other         |         | Total           
|                                                                                  |                               |                                   |            | Paid-In    |  | Retained |    | Treasury |  | Comprehensive |         | Stockholders   
|                                                                                  |                               | Shares                            |            | Par Value  |  | Capital  |    | Earnings |  | Stock         |         | Income and Other |  | Equity
|                                                                                  |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |       
|                                                                                  |                               |                                  
|                                                                                  |                               | (In thousands, except share data)
|Balances, December 31, 2000                                                       |                               |                                   | 85,375,733 |            |  | $        | 85 |          |  | $             | 198,904 |                  |  | $      | 496,671 |        |  | $ | (37,935  | ) |  | $ | (2,846 | ) |  | $ | 654,879 |       
|Issuance of common stock under stock option and
    employee stock purchase plans |                               |                                   | 2,353,786  |            |  |          | 3  |          |  |               | 27,230  |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   | 27,233  |       
|Issuance of common stock upon public offering                                     |                               |                                   | 1,320,000  |            |  |          | 1  |          |  |               | 20,063  |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   | 20,064  |       
|Income tax benefit arising from the exercise of
    stock options                 |                               |                                   |            |            |  |          |    |          |  |               | 2,491   |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   | 2,491   |       
|Amortization of deferred compensation                                             |                               |                                   |            |            |  |          |    |          |  |               | 722     |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   | 722     |       
|Notes receivable from officers                                                    |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         |        |  |   |          |   |  |   | 852    |   |  |   | 852     |       
|Foreign currency translation                                                      |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         |        |  |   |          |   |  |   | 1,741  |   |  |   | 1,741   |       
|Net earnings                                                                      |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        | 27,221  |        |  |   |          |   |  |   |        |   |  |   | 27,221  |       
|                                                                                  |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   |         |       
|Balances, December 31, 2001                                                       |                               |                                   | 89,049,519 |            |  |          | 89 |          |  |               | 249,410 |                  |  |        | 523,892 |        |  |   | (37,935  | ) |  |   | (253   | ) |  |   | 735,203 |       
|Issuance of common stock under stock option and
    employee stock purchase plans |                               |                                   | 1,132,754  |            |  |          | 1  |          |  |               | 13,567  |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   | 13,568  |       
|Income tax benefit arising from the exercise of
    stock options                 |                               |                                   |            |            |  |          |    |          |  |               | 7,932   |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   | 7,932   |       
|Amortization of deferred compensation                                             |                               |                                   |            |            |  |          |    |          |  |               | 1,190   |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   | 1,190   |       
|Purchase of 3,079,227 shares of treasury
    stock                                |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         |        |  |   | (51,956  | ) |  |   |        |   |  |   | (51,956 | )     
|Foreign currency translation                                                      |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         |        |  |   |          |   |  |   | 253    |   |  |   | 253     |       
|Net earnings                                                                      |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        | 59,588  |        |  |   |          |   |  |   |        |   |  |   | 59,588  |       
|                                                                                  |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   |         |       
|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                                            |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         |        |  |   |          |   |  |   | 44     |   |  |   | 44      |       
|                                                                                  | interest expense Net earnings |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         | 79,371 |  |   |          |   |  |   |        |   |  |   |         | 79,371 | 
|                                                                                  |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   |         |       
|Balances, December 31, 2003                                                       |                               |                                   | 91,379,776 |            |  | $        | 91 |          |  | $             | 291,095 |                  |  | $      | 662,851 |        |  | $ | (108,760 | ) |  | $ | (662   | ) |  | $ | 844,615 |       
|                                                                                  |                               |                                   |            |            |  |          |    |          |  |               |         |                  |  |        |         |        |  |   |          |   |  |   |        |   |  |   |         |       

See accompanying notes to consolidated financial
statements.

28



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |          |         |        |          |  
|------------------------------------------------------------------------ | --------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ------------------------------------------------------------- | ---------------------------------------------------- | ------- | ------- | -------- | -------- | ------- | ------- | -------- | -------- | ------- | ------ | -------- | -
|                                                                         |                                                                                         |                                                                  
|                                                                         |                                                                                         | Years Ended December 31,                                         
|                                                                         |                                                                                         |                                                                  
|                                                                         |                                                                                         | 2003                                                              |                                                               | 2002                                                 |         | 2001   
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |        
|                                                                         |                                                                                         |                                                                  
|                                                                         |                                                                                         | (In thousands)                                                   
|Cash flows from operating activities:                                    |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         | Net earnings                                                                            |                                                                   | $                                                             | 79,371                                               |         |         | $        | 59,588   |         |         | $        | 27,221   |        
|                                                                         | Adjustments to reconcile net earnings to net cash
    provided by operating activities: |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |          |        
|                                                                         |                                                                                         | Depreciation and amortization                                     |                                                               |                                                      | 149,974 |         |          |          | 143,073 |         |          |          | 143,257 |       
|                                                                         |                                                                                         | Deferred income taxes                                             |                                                               |                                                      | 30,566  |         |          |          | 27,379  |         |          |          | 16,066  |       
|                                                                         |                                                                                         | Income tax benefit arising from the exercise of
    stock options |                                                               |                                                      | 3,192   |         |          |          | 7,932   |         |          |          | 2,491   |       
|                                                                         |                                                                                         | Provision for losses on accounts receivable                       |                                                               |                                                      | 8,440   |         |          |          | 6,579   |         |          |          | 4,734   |       
|                                                                         |                                                                                         | Amortization of deferred compensation                             |                                                               |                                                      | 1,839   |         |          |          | 1,190   |         |          |          | 722     |       
|                                                                         |                                                                                         | Fair market value of interest rate swaps                          |                                                               |                                                      | (2,084  | )       |          |          | 5,897   |         |          |          | 4,050   |       
|                                                                         |                                                                                         | EASO impairment adjustment                                        |                                                               |                                                      |         |         |          |          |         |         |          |          | 10,447  |       
|                                                                         |                                                                                         | Impairment of property                                            |                                                               |                                                      |         |         |          |          | 3,100   |         |          |          |         |       
|                                                                         |                                                                                         | Amortization of deferred legal fees                               |                                                               |                                                      | 8,476   |         |          |          | 4,238   |         |          |          |         |       
|                                                                         |                                                                                         | Increase (decrease) in cash resulting from
    changes in:        |                                                               |                                                      |         |         |          |          |         |         |          |          |         |       
|                                                                         |                                                                                         |                                                                   | Accounts receivable                                           |                                                      |         | (24,129 | )        |          |         | (14,092 | )        |          |         | 20,670 |         
|                                                                         |                                                                                         |                                                                   | Inventories and supplies                                      |                                                      |         | (1,056  | )        |          |         | (4,349  | )        |          |         | (1,534 | )       
|                                                                         |                                                                                         |                                                                   | Prepaid expenses and other current assets                     |                                                      |         | 193     |          |          |         | 7,860   |          |          |         | 7,719  |         
|                                                                         |                                                                                         |                                                                   | Other assets                                                  |                                                      |         | (2,065  | )        |          |         | (15,863 | )        |          |         | (4,102 | )       
|                                                                         |                                                                                         |                                                                   | Accounts payable, accrued liabilities and claims
    accruals |                                                      |         | 35,172  |          |          |         | 34,184  |          |          |         | 31,196 |         
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         |                                                                                         |                                                                   |                                                               | Net cash provided by operating activities            |         |         | 287,889  |          |         |         | 266,716  |          |         |        | 262,937  |  
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|Cash flows from investing activities:                                    |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         | Proceeds from sale of property and equipment                                            |                                                                   |                                                               | 91,012                                               |         |         |          | 117,099  |         |         |          | 59,254   |        
|                                                                         | Capital expenditures                                                                    |                                                                   |                                                               | (313,854                                             | )       |         |          | (335,688 | )       |         |          | (224,259 | )      
|                                                                         | Proceeds from sale of assets held for sale                                              |                                                                   |                                                               | 8,740                                                |         |         |          |          |         |         |          |          |        
|                                                                         | Loans to investment entities                                                            |                                                                   |                                                               | (3,377                                               | )       |         |          | (15,851  | )       |         |          |          |        
|                                                                         | Repayment of notes receivables                                                          |                                                                   |                                                               |                                                      |         |         |          | 1,000    |         |         |          | 4,052    |        
|                                                                         | Payments received on equipment sales receivables                                        |                                                                   |                                                               | 11,100                                               |         |         |          | (2,107   | )       |         |          | 5,799    |        
|                                                                         | Payment for purchase of Merit Distribution
    Services, Inc.                           |                                                                   |                                                               | (81,590                                              | )       |         |          |          |         |         |          |          |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         |                                                                                         |                                                                   |                                                               | Net cash used in investing activities                |         |         | (287,969 | )        |         |         | (235,547 | )        |         |        | (155,154 | )
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|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                                         |                                                                   |                                                               | (51,821                                              | )       |         |          | (71,402  | )       |         |          | (122,567 | )      
|                                                                         | Borrowings under line of credit                                                         |                                                                   |                                                               | 120,800                                              |         |         |          | 182,900  |         |         |          | 178,000  |        
|                                                                         | Repayments of borrowings under line of credit                                           |                                                                   |                                                               | (227,200                                             | )       |         |          | (163,500 | )       |         |          | (215,000 | )      
|                                                                         | Change in borrowings under accounts receivable
    securitization                       |                                                                   |                                                               | (27,000                                              | )       |         |          | 53,000   |         |         |          | (1,000   | )      
|                                                                         | Proceeds from public offering                                                           |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          | 20,064   |        
|                                                                         | Proceeds from sale of common stock                                                      |                                                                   |                                                               | 13,913                                               |         |         |          | 13,568   |         |         |          | 27,233   |        
|                                                                         | Accumulated other comprehensive loss                                                    |                                                                   |                                                               | (662                                                 | )       |         |          |          |         |         |          |          |        
|                                                                         | Purchase of treasury stock                                                              |                                                                   |                                                               | (18,869                                              | )       |         |          | (51,956  | )       |         |          |          |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         |                                                                                         |                                                                   |                                                               | Net cash provided (used) by financing
    activities |         |         | 11,205   |          |         |         | (37,390  | )        |         |        | (113,270 | )
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|Net increase (decrease) in cash                                          |                                                                                         |                                                                   | 11,125                                                        |                                                      |         |         | (6,221   | )        |         |         | (5,487   | )       
|Cash at beginning of year                                                |                                                                                         |                                                                   | 7,930                                                         |                                                      |         |         | 14,151   |          |         |         | 19,638   |         
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|Cash at end of year                                                      |                                                                                         | $                                                                 | 19,055                                                        |                                                      |         | $       | 7,930    |          |         | $       | 14,151   |         
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|Supplemental disclosure of cash flow information:                        |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         | Cash paid during the year for:                                                          |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |          |        
|                                                                         | Interest                                                                                |                                                                   | $                                                             | 19,600                                               |         |         | $        | 14,726   |         |         | $        | 29,809   |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         | Income taxes                                                                            |                                                                   | $                                                             | 17,488                                               |         |         | $        |          |         |         | $        | 3,016    |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|Supplemental schedule of noncash investing and
    financing activities: |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         | Equipment sales receivables                                                             |                                                                   | $                                                             | 5,998                                                |         |         | $        | 11,100   |         |         | $        | 2,107    |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         | Direct financing for purchase of equipment                                              |                                                                   | $                                                             |                                                      |         |         | $        |          |         |         | $        | 5,605    |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         | Fair value of operating lease guarantees                                                |                                                                   | $                                                             | 2,156                                                |         |         | $        |          |         |         | $        |          |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         
|                                                                         | Note receivable from property sale                                                      |                                                                   | $                                                             |                                                      |         |         | $        |          |         |         | $        | 1,715    |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                                      |         |         |          |          |         |         |          |         

See accompanying notes to consolidated financial
statements.

29



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

December 31, 2003, 2002 and
2001




|    |                                               
|--- | ----------------------------------------------
|(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
throughout the continental United States. The Company operates a
national terminal network and a fleet of approximately 18,000
tractors, at the end of 2003, 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 intercompany balances and transactions have been
eliminated in consolidation.



| |                          
| | -------------------------
| | 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 from the sale of revenue equipment are included as a
component of depreciation expense. Gains and losses in 2003,
2002 and 2001 were $262,000 and $1.7 million,
$8.1 million and $3.7 million and $3.4 million
and $1.8 million, 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.

To obtain certain tax incentives, the Company
financed the construction of its Edwardsville, Kansas terminal
with municipal bonds issued by the city. Subsequently, the
Company purchased 100% of the bonds and intends to hold them to
maturity, effectively financing the construction with internal
cash flow. The Company has offset the investment in the bonds
($6.1 million) against the related liability and neither is
reflected on the consolidated balance sheet.



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

Goodwill represents the excess of purchase price
over fair value of net assets acquired. Such goodwill was being
amortized on the straight-line method over periods ranging from
5 to 20 years. Accumulated amortization was $8,093,000 at
December 31, 2003 and 2002. The Company adopted Statement
of Financial Standards No. 142 Goodwill and Other
Intangible Assets on January 1, 2002. This standard
eliminates amortization of goodwill and replaces it with a test
for impairment. The Company has $25.2 million and
$8.9 million of goodwill at December 31, 2003 and
2002. The Company amortized $1.4 million of goodwill for
the year ended December 30, 2001. Basic and diluted
earnings per share would have been $.34 per share for

30



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)

the year ended December 31, 2001 without
goodwill amortization. Also, see the footnotes on Equity
Investment  Transplace and Merit Acquisition for
further discussion.



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

Operating revenues and related direct costs are
recognized as of the date the freight is picked up for shipment.
M.S. Carriers (see Pooling of Interests note) recognized revenue
on the date freight was delivered. Beginning January 1,
2002, M.S. Carriers was operationally combined with the Company
and recognizes revenue on the date 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 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.
Accordingly, no compensation cost has been recognized for its
Employee Stock Purchase Plan. The compensation cost that has
been charged against income for its Fixed Stock Option Plans was
$1,839,000, $1,190,000 and $722,000 for 2003, 2002 and 2001,
respectively.

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:

|                            |  |                                                                   |  |      |        |      |  |      |        |   |  |   |        |   |  | 
|--------------------------- |  | ----------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | - |  | 
|                            |  |                                                                   |  | 2003 |        | 2002 |  | 2001
|                            |  |                                                                   |  |      |        |      |  |     
|Net earnings (in thousands) |  | As Reported                                                       |  | $    | 79,371 |      |  | $    | 59,588 |   |  | $ | 27,221 |  
|                            |  | Add: Compensation expense, using intrinsic method, net of tax     |  |      | 1,140  |      |  |      | 738    |   |  |   | 445    |  
|                            |  | Deduct: Compensation expense, using fair value method, net of tax |  |      | (6,020 | )    |  |      | (4,177 | ) |  |   | (3,395 | )
|                            |  |                                                                   |  |      |        |      |  |      |        |   |  |   |        |   |  | 
|                            |  | Pro forma                                                         |  | $    | 74,491 |      |  | $    | 56,149 |   |  | $ | 24,271 |  
|                            |  |                                                                   |  |      |        |      |  |      |        |   |  |   |        |   |  | 
|Basic earnings per share    |  | As Reported                                                       |  | $    | .95    |      |  | $    | .70    |   |  | $ | .32    |  
|                            |  |                                                                   |  |      |        |      |  |      |        |   |  |   |        |   |  | 
|                            |  | Pro forma                                                         |  | $    | .89    |      |  | $    | .66    |   |  | $ | .29    |  
|                            |  |                                                                   |  |      |        |      |  |      |        |   |  |   |        |   |  | 
|Diluted earnings per share  |  | As Reported                                                       |  | $    | .94    |      |  | $    | .69    |   |  | $ | .32    |  
|                            |  |                                                                   |  |      |        |      |  |      |        |   |  |   |        |   |  | 
|                            |  | Pro forma                                                         |  | $    | .88    |      |  | $    | .65    |   |  | $ | .28    |  
|                            |  |                                                                   |  |      |        |      |  |      |        |   |  |   |        |   |  | 

Pro forma net earnings reflect only options
granted in 1995 through 2003. 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 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

31



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)

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.



|    |                     
|--- | --------------------
|(2) | Pooling of Interests

These consolidated financial statements include
the accounts of M.S. Carriers, Inc. (M.S.
Carriers), also a publicly-held truckload carrier, which
merged with a subsidiary of the Company on June 29, 2001
(the Merger). In exchange for 19,464,322 shares
of the Companys common stock, M.S. Carriers became a
wholly-owned subsidiary of the Company. The Merger was accounted
for as a pooling of interests.

The results of operations for the six months
ended June 30, 2001 (period prior to merger) included in
the consolidated financial statements are as follows:

|                     |             |                |           |         |  
|-------------------- | ----------- | -------------- | --------- | ------- | -
|                     |             | (In thousands)
|                     |             |               
|Operating revenue:   |             |                |           |        
|                     | Swift       |                | $         | 677,437 |  
|                     | MS Carriers |                |           | 367,712 |  
|                     |             |                |           |        
|                     |             | $              | 1,045,149 |        
|                     |             |                |           |        
|Net earnings (loss): |             |                |           |        
|                     | Swift       |                | $         | 13,463  |  
|                     | MS Carriers |                |           | (2,073  | )
|                     |             |                |           |        
|                     |             | $              | 11,390    |        
|                     |             |                |           |        

See the Industry Segment footnote for a
reconciliation of the Companys operating revenue and
earnings to those previously reported.



|    |                    
|--- | -------------------
|(3) | Accounts Receivable

Accounts receivable consists of:

|                                     |  |                |         |      |  |   |         | 
|------------------------------------ |  | -------------- | ------- | ---- |  | - | ------- | 
|                                     |  |               
|                                     |  | December 31,  
|                                     |  |               
|                                     |  | 2003           |         | 2002
|                                     |  |                |         |     
|                                     |  |               
|                                     |  | (In thousands)
|Trade customers                      |  | $              | 271,529 |      |  | $ | 259,626 | 
|Equipment manufacturers              |  |                | 3,775   |      |  |   | 5,453   | 
|Income tax receivable                |  |                | 17,616  |      |  |   | 9,968   | 
|Other                                |  |                | 4,987   |      |  |   | 9,683   | 
|                                     |  |                |         |      |  |   |         | 
|                                     |  |                | 297,907 |      |  |   | 284,730 | 
|Less allowance for doubtful accounts |  |                | 7,983   |      |  |   | 12,185  | 
|                                     |  |                |         |      |  |   |         | 
|                                     |  | $              | 289,924 |      |  | $ | 272,545 | 
|                                     |  |                |         |      |  |   |         | 

32



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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 |  | Deductions |       | Balance
|                         |  |                |        |           |  |            |       |        
|                         |  |               
|                         |  | (In thousands)
|Years ended December 31: |  |                |        |           |  |            |       |         |  |   |         |   |  |   |        | 
|2003                     |  | $              | 12,185 |           |  | $          | 8,440 |         |  | $ | (12,642 | ) |  | $ | 7,983  | 
|                         |  |                |        |           |  |            |       |         |  |   |         |   |  |   |        | 
|2002                     |  | $              | 10,660 |           |  | $          | 6,579 |         |  | $ | (5,054  | ) |  | $ | 12,185 | 
|                         |  |                |        |           |  |            |       |         |  |   |         |   |  |   |        | 
|2001                     |  | $              | 13,164 |           |  | $          | 8,483 |         |  | $ | (10,987 | ) |  | $ | 10,660 | 
|                         |  |                |        |           |  |            |       |         |  |   |         |   |  |   |        | 



|    |                     
|--- | --------------------
|(4) | Assets Held for Sale

The Company disposed of two properties in 2003,
which had been identified as of December 31, 2002,
classified 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.

The Company recorded a $3.1 million expense
in 2002 for the estimated excess of carrying value over the fair
value of an office building in Memphis, Tennessee, which
formerly was the corporate office of M.S. Carriers. Although the
Company is currently utilizing some of the building, a sale of
this property is anticipated in the near term. This expense,
which was included in depreciation expense, was based upon a
fair value determined by the Company using sale and asking
prices of comparable properties and an independent appraisal.



|    |                                   
|--- | ----------------------------------
|(5) | 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
matches shippers with trucking companies and receives a fee for
this service. The Company may receive from Transplace the
opportunity to provide transportation services to shippers. In
addition, the Company may utilize Transplace to assist in
obtaining additional capacity for its customers. During the
years ended December 31, 2003, 2002 and 2001, Swift
received less than 3% of its operating revenue from Transplace
and paid less than 1% 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 $1.2 million,
$2.7 million and $3.0 million in other expense during
the years ending December 31, 2003, 2002 and 2001,
respectively for Transplace.

The Companys equity in the net assets of
Transplace exceeds its investment account by approximately
$30 million as of December 31, 2003 and 2002. 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 $53.8 million,
$57.1 million and $61.4 million in operating revenue
in 2003, 2002 and 2001, respectively, for transportation
services provided to Transplace. At December 31, 2003 and
2002, $4.7 million and $5.8 million, respectively, was
owed to the Company for these services.

33



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)

(6) Note Receivable 
Trans-Mex

The Company has advanced $15.2 million to
Trans-Mex, Inc. S.A. de C. V., a Mexican corporation of
which the Company owns 49% and purchased the remaining 51% in
January 2004. These loans, which are secured by equipment, bear
interest at prime plus 2% with monthly payments of interest plus
amortization of the principal over five years. See Subsequent
Event footnote regarding the Companys purchase of
Trans-Mex.

(7) Equity Investment 
Transportes Easo

In 2001, the Company recorded a
$10.5 million adjustment to other expense in the statement
of earnings, of which $8.5 million relates to the
impairment of its 50% equity investment held by M.S. Carriers in
Transportes EASO, the largest intra-Mexico truckload carrier,
and $2 million is associated with the write off of a cash
advance made to EASO in the third quarter of 2001. The
Companys investment in Transportes EASO is zero as of
December 31, 2003 and 2002.



|    |                    
|--- | -------------------
|(8) | Accrued Liabilities

Accrued liabilities consists of:

|                       |  |                |        |      |  |   |        | 
|---------------------- |  | -------------- | ------ | ---- |  | - | ------ | 
|                       |  |               
|                       |  | December 31,  
|                       |  |               
|                       |  | 2003           |        | 2002
|                       |  |                |        |     
|                       |  |               
|                       |  | (In thousands)
|Employee compensation  |  | $              | 47,346 |      |  | $ | 33,003 | 
|Fuel and mileage taxes |  |                | 2,281  |      |  |   | 1,226  | 
|Other                  |  |                | 18,882 |      |  |   | 17,932 | 
|                       |  |                |        |      |  |   |        | 
|                       |  | $              | 68,509 |      |  | $ | 52,161 | 
|                       |  |                |        |      |  |   |        | 



|    |                                   
|--- | ----------------------------------
|(9) | 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 an unrelated financial
entity. The bankruptcy-remote subsidiary has the right to
repurchase the receivables from the unrelated entity. 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.

Under the amended agreement, the Company can
receive up to a maximum of $200 million of proceeds,
subject to eligible receivables and will pay a program fee
recorded as interest expense, as defined in the agreement. The
Company will pay commercial paper interest rates on the proceeds
received. 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, 2003 and 2002 there were $142 million
and $169 million, respectively, of proceeds received.



|     |                                             
|---- | --------------------------------------------
|(10) | 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. For new arrangements in 2003, the
Company has recorded a liability for the estimated fair value of
the guarantees in the amount of $2.2 million. The maximum
potential amount of future payments the Company would be
required to make under guarantees related to these new 2003
arrangements is $41.5 million.

34



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)



|     |                                                
|---- | -----------------------------------------------
|(11) | Borrowings Under Revolving Credit
    Agreement

The Company has a $300 million unsecured
revolving line of credit under an agreement with nine banks (the
Credit Agreement), which matures on November 21, 2005.
Interest on outstanding borrowings is based upon one of two
options, which the Company selects at the time of borrowing: the
banks prime rate or the London Interbank Offered Rate
(LIBOR) plus applicable margins ranging from 62.5 to
137.5 basis points, as defined in the Credit Agreement
(currently 70 basis points). The unused portion of the line
of credit is subject to a commitment fee ranging from 17.5 to
25 basis points (currently 20 basis points). As of
December 31, 2003 and 2002, there was $30 million and
$136.4 million outstanding under the line of credit.

The Credit Agreement requires the Company to meet
certain covenants with respect to leverage and fixed charge
coverage ratios and tangible net worth. The Credit Agreement
also requires the Company to maintain unencumbered assets of not
less than 120% of indebtedness (as defined).

The Credit Agreement includes financing for
letters of credit up to $150 million. The Company has
outstanding letters of credit primarily for workers
compensation and liability self-insurance purposes totaling
$103 million at December 31, 2003.



|     |               
|---- | --------------
|(12) | Long-Term Debt

Long-term debt consists of the following:

|                                                                                                                                                                                                                                                                                                                                                                                                     |                      |                |       |        |  |   |        |        | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | -------------- | ----- | ------ |  | - | ------ | ------ | 
|                                                                                                                                                                                                                                                                                                                                                                                                     |                      |               
|                                                                                                                                                                                                                                                                                                                                                                                                     |                      | December 31,  
|                                                                                                                                                                                                                                                                                                                                                                                                     |                      |               
|                                                                                                                                                                                                                                                                                                                                                                                                     |                      | 2003           |       | 2002  
|                                                                                                                                                                                                                                                                                                                                                                                                     |                      |                |       |       
|                                                                                                                                                                                                                                                                                                                                                                                                     |                      |               
|                                                                                                                                                                                                                                                                                                                                                                                                     |                      | (In thousands)
|Notes payable to commercial lending institutions
    with varying payments through the year 2005 with fixed interest
    rates ranging from 2.9% to 3.8%                                                                                                                                                                                                                                             |                      | $              | 2,420 |        |  | $ | 776    |       
|Note payable to insurance company bearing
    interest at 6.78% payable monthly with principal payments of
    $3,000,000 due in 2003 through 2006 secured by deed of trust on
    Phoenix facilities. Covenant requirements include minimum debt
    to equity and debt coverage ratios and tangible net worth. The
    covenants include limitations on dividends and treasury stock
    purchases |                      |                | 9,000 |        |  |   | 12,000 |       
|                                                                                                                                                                                                                                                                                                                                                                                                     |                      |                |       |        |  |   |        |       
|                                                                                                                                                                                                                                                                                                                                                                                                     | Total long-term debt |                |       | 11,420 |  |   |        | 12,776 | 
|Less current portion                                                                                                                                                                                                                                                                                                                                                                                 |                      |                | 4,573 |        |  |   | 3,389  |       
|                                                                                                                                                                                                                                                                                                                                                                                                     |                      |                |       |        |  |   |        |       
|Long-term debt, less current portion                                                                                                                                                                                                                                                                                                                                                                 |                      | $              | 6,847 |        |  | $ | 9,387  |       
|                                                                                                                                                                                                                                                                                                                                                                                                     |                      |                |       |        |  |   |        |       

The aggregate annual maturities of long-term debt
as of December 31, 2003 are as follows:

|                          |  |                |        | 
|------------------------- |  | -------------- | ------ | 
|Years Ending December 31, |  | (In thousands)
|                          |  |               
|2004                      |  | $              | 4,573  | 
|2005                      |  |                | 3,847  | 
|2006                      |  |                | 3,000  | 
|                          |  |                |        | 
|Total                     |  | $              | 11,420 | 
|                          |  |                |        | 

For the years ended December 31, 2003, 2002
and 2001, the Company capitalized interest related to
self-constructed assets totaling $507,000, $415,000 and
$784,000, respectively.



|     |             
|---- | ------------
|(13) | 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%

35



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)

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.



|     |               
|---- | --------------
|(14) | Capital Leases

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 $56.5 million and
$140.4 million and accumulated amortization of
$17.5 million and $46.1 million at December 31,
2003 and 2002, respectively. The amortization of the equipment
under capital leases is included in depreciation expense.

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:

|                                        |  |                |        | 
|--------------------------------------- |  | -------------- | ------ | 
|                                        |  | December 31,  
|                                        |  | 2003          
|                                        |  |               
|                                        |  | (In Thousands)
|2004                                    |  | $              | 18,139 | 
|2005                                    |  |                | 17,590 | 
|2006                                    |  |                | 1,815  | 
|                                        |  |                |        | 
|Total minimum lease payments            |  |                | 37,544 | 
|Less: Amount representing interest      |  |                | 2,450  | 
|                                        |  |                |        | 
|Present value of minimum lease payments |  |                | 35,094 | 
|Less current portion                    |  |                | 14,047 | 
|                                        |  |                |        | 
|Capital lease obligations, long-term    |  | $              | 21,047 | 
|                                        |  |                |        | 



|     |                                 
|---- | --------------------------------
|(15) | Derivative Financial Instruments

The Company adopted Statement of Financial
Standards No. 133 (SFAS No. 133),
Accounting for Derivative Instruments and Hedging
Activities, and its amendments, Statements 137 and 138, on
January 1, 2001. SFAS No. 133 requires that all
derivative instruments be recorded on the balance sheet at fair
value.

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, 2003 and
2002, the Company recognized a gain (loss) for the change in
fair market value of the interest rate swap agreements of
$2,084,000 and ($5,897,000). The changes in fair market value of
the interest rate swap agreements are recorded as interest
expense.



|     |                                     
|---- | ------------------------------------
|(16) | 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 $70,000
into interest expense during the year ended December 31,
2003 and expects $145,000 will be amortized into interest
expense during the next twelve months.

36



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)



|     |            
|---- | -----------
|(17) | Commitments



| |                 
| | ----------------
| | Operating Leases

The Company leases various revenue equipment and
terminal facilities under operating leases. At December 31,
2003, the future minimum lease payments under noncancelable
operating leases are as follows:

|                             |  |                |         |            |  |       |       |  |  |   |         | 
|---------------------------- |  | -------------- | ------- | ---------- |  | ----- | ----- |  |  | - | ------- | 
|                             |  | Revenue        |         |            |  |      
|Years Ending December 31,    |  | Equipment      |         | Facilities |  | Total
|                             |  |                |         |            |  |      
|                             |  |               
|                             |  | (In thousands)
|2004                         |  | $              | 65,578  |            |  | $     | 2,020 |  |  | $ | 67,598  | 
|2005                         |  |                | 45,637  |            |  |       | 1,029 |  |  |   | 46,666  | 
|2006                         |  |                | 32,649  |            |  |       | 572   |  |  |   | 33,221  | 
|2007                         |  |                | 23,026  |            |  |       | 418   |  |  |   | 23,444  | 
|2008                         |  |                |         |            |  |       | 240   |  |  |   | 240     | 
|Thereafter                   |  |                |         |            |  |       | 115   |  |  |   | 115     | 
|                             |  |                |         |            |  |       |       |  |  |   |         | 
|Total minimum lease payments |  | $              | 166,890 |            |  | $     | 4,394 |  |  | $ | 171,284 | 
|                             |  |                |         |            |  |       |       |  |  |   |         | 

The revenue equipment leases generally include
purchase options exercisable at the completion of the lease. The
Company recorded gains of approximately $247,000, $1,800,000,
and $338,000 from the sale of leased tractors in 2003, 2002, and
2001, respectively.



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

The Company had commitments outstanding to
acquire revenue equipment for approximately $379 million at
December 31, 2003. 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 60 days
notice.

In addition, the Company had remaining
commitments of $31 million as of December 31, 2003
under contracts relating to acquisition, development and
improvement of facilities.



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

The Company has guaranteed approximately
$2.1 million of debt of Trans-Mex, Inc. S. A. de C.
V., a truckload carrier within the Republic of Mexico of which
the Company owns 49%. This debt, with periods not exceeding five
years, relates to the acquisition of revenue equipment.

Furthermore, 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 $101 million.

37



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##### Table of Contents



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,       
|                                                              |  |                                
|                                                              |  | 2003                            |        | 2002 |  | 2001
|                                                              |  |                                 |        |      |  |     
|                                                              |  |                                
|                                                              |  | (In thousands, except per share
|                                                              |  | amounts)                       
|Net earnings                                                  |  | $                               | 79,371 |      |  | $    | 59,588 |  |  | $ | 27,221 | 
|                                                              |  |                                 |        |      |  |      |        |  |  |   |        | 
|Weighted average shares:                                      |  |                                 |        |      |  |      |        |  |  |   |        | 
|Common shares outstanding for basic earnings per
    share    |  |                                 | 83,474 |      |  |      | 85,502 |  |  |   | 83,781 | 
|Equivalent shares issuable upon exercise of stock
    options |  |                                 | 1,253  |      |  |      | 1,426  |  |  |   | 1,937  | 
|                                                              |  |                                 |        |      |  |      |        |  |  |   |        | 
|Diluted shares                                                |  |                                 | 84,727 |      |  |      | 86,928 |  |  |   | 85,718 | 
|                                                              |  |                                 |        |      |  |      |        |  |  |   |        | 
|Basic earnings per share                                      |  | $                               | .95    |      |  | $    | .70    |  |  | $ | .32    | 
|                                                              |  |                                 |        |      |  |      |        |  |  |   |        | 
|Diluted earnings per share                                    |  | $                               | .94    |      |  | $    | .69    |  |  | $ | .32    | 
|                                                              |  |                                 |        |      |  |      |        |  |  |   |        | 

Equivalent shares issuable upon exercise of stock
options exclude 1,452,000, 436,000 and 453,000 shares in
2003, 2002 and 2001, respectively, as the effect was
antidilutive.



|     |                      
|---- | ---------------------
|(19) | Public Stock Offering

The Company completed a public offering of
1,200,000 shares of its common stock on June 27, 2001.
This offering generated proceeds of $18.2 million, net of
expenses. An option by the underwriters to purchase an
additional 120,000 shares was exercised on July 2,
2001 and generated additional proceeds of $1.8 million.



|     |                     
|---- | --------------------
|(20) | Stockholders Equity

The Company purchased 1,201,000 and
3,079,227 shares of its common stock for a total cost of
$18.9 million and $52.0 million during 2003 and 2002,
respectively. All of the shares purchased are being held as
treasury stock and may be used for issuances under the
Companys employee stock option and purchase plans or for
other general corporate purposes.

The Board of Directors has authorized the Company
to repurchase up to $100 million of its common stock,
subject to criteria established by the Board. The stock may be
purchased on the open market or in privately negotiated
transactions at any time until February 28, 2005, unless
the period is extended by the Board.

Stock Option
Plans

The Company has a number of stock options under
various plans. Options granted by M.S. Carriers have generally
been granted with an exercise price equal to the market price on
the grant date and expire on the tenth anniversary of the grant
date. The options granted to M.S. Carriers employees vested on
June 29, 2001. Options granted by Swift to employees have
been granted with an exercise price equal to 85 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 of the market price on the grant date, vest
beginning on the grant date and expire on the sixth anniversary
of the grant date.

As of December 31, 2003, the Company is
authorized to grant an additional 7.0 million shares.

38



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)

The fair value of each option grant is estimated
on the date of grant using the Black-Scholes option-pricing
model with the following weighted-average assumptions used for
grants in 2001 through 2003:

|                                         |  |      |     |      |  |      |     |   |  |  |     |  
|---------------------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                         |  | 2003 |     | 2002 |  | 2001
|                                         |  |      |     |      |  |     
|Dividend yield                           |  |      | 0   | %    |  |      | 0   | % |  |  | 0   | %
|Expected volatility                      |  |      | 40  | %    |  |      | 45  | % |  |  | 45  | %
|Risk free interest rate                  |  |      | 4.2 | %    |  |      | 3.9 | % |  |  | 5   | %
|Expected lives (days after vesting date) |  |      | 172 |      |  |      | 150 |   |  |  | 110 |  

A summary of the status of the Companys
fixed stock option plans as of December 31, 2003, 2002 and
2001, and changes during the years then ended on those dates is
presented below:

|                                                                   |  |        |           |           |  |        |       |           |  |        |           |           |  |   |       |  |  |   |            |   |  |   |       | 
|------------------------------------------------------------------ |  | ------ | --------- | --------- |  | ------ | ----- | --------- |  | ------ | --------- | --------- |  | - | ----- |  |  | - | ---------- | - |  | - | ----- | 
|                                                                   |  |        |           |           |  |       
|                                                                   |  | 2003   |           | 2002      |  | 2001  
|                                                                   |  |        |           |           |  |       
|                                                                   |  |        |           | Weighted- |  |        |       | Weighted- |  |        |           | Weighted-
|                                                                   |  |        |           | Average   |  |        |       | Average   |  |        |           | Average  
|                                                                   |  |        |           | Exercise  |  |        |       | Exercise  |  |        |           | Exercise 
|                                                                   |  | Shares |           | Price     |  | Shares |       | Price     |  | Shares |           | Price    
|                                                                   |  |        |           |           |  |        |       |           |  |        |           |          
|Outstanding at beginning of year                                   |  |        | 6,944,487 |           |  | $      | 12.41 |           |  |        | 6,142,239 |           |  | $ | 10.89 |  |  |   | 7,962,604  |   |  | $ | 10.59 | 
|Granted below market value                                         |  |        | 2,527,000 |           |  | $      | 18.42 |           |  |        | 2,059,500 |           |  | $ | 16.51 |  |  |   | 587,450    |   |  | $ | 16.83 | 
|Exercised                                                          |  |        | (840,857  | )         |  | $      | 9.85  |           |  |        | (809,479  | )         |  | $ | 9.78  |  |  |   | (2,031,817 | ) |  | $ | 10.88 | 
|Forfeited                                                          |  |        | (331,907  | )         |  | $      | 12.48 |           |  |        | (447,773  | )         |  | $ | 15.68 |  |  |   | (375,998   | ) |  | $ | 13.16 | 
|                                                                   |  |        |           |           |  |        |       |           |  |        |           |           |  |   |       |  |  |   |            |   |  |   |       | 
|Outstanding at end of year                                         |  |        | 8,298,723 |           |  | $      | 14.50 |           |  |        | 6,944,487 |           |  | $ | 12.41 |  |  |   | 6,142,239  |   |  | $ | 10.94 | 
|                                                                   |  |        |           |           |  |        |       |           |  |        |           |           |  |   |       |  |  |   |            |   |  |   |       | 
|Options exercisable at year-end                                    |  |        | 1,238,305 |           |  | $      | 12.41 |           |  |        | 1,245,367 |           |  |   |       |  |  |   | 1,740,948  |   |  |   |       | 
|Weighted-average fair value of options granted
    during the year |  | $      | 12.97     |           |  |        |       |           |  | $      | 12.10     |           |  |   |       |  |  | $ | 8.07       |   |  |   |       | 
|                                                                   |  |        |           |           |  |        |       |           |  |        |           |           |  |   |       |  |  |   |            |   |  |   |       | 

The following table summarizes information about
fixed stock options outstanding at December 31, 2003:

|                         |  |                     |           |                     |  |           |      |             |  |           |       |  |  |  |           |  |  |   |       | 
|------------------------ |  | ------------------- | --------- | ------------------- |  | --------- | ---- | ----------- |  | --------- | ----- |  |  |  | --------- |  |  | - | ----- | 
|                         |  |                     |           |                     |  |          
|                         |  | 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    
|                         |  |                     |           |                     |  |           |      |             |  |          
|$4.86 to $10.81          |  |                     | 1,495,043 |                     |  |           | 3.41 |             |  | $         | 9.30  |  |  |  | 531,503   |  |  | $ | 8.62  | 
|$11.10                   |  |                     | 1,757,200 |                     |  |           | 6.41 |             |  | $         | 11.10 |  |  |  | 59,001    |  |  | $ | 11.10 | 
|$11.17 to $16.79         |  |                     | 2,079,180 |                     |  |           | 7.63 |             |  | $         | 15.56 |  |  |  | 475,251   |  |  | $ | 14.43 | 
|$17.14 to $18.42         |  |                     | 445,850   |                     |  |           | 8.13 |             |  | $         | 17.19 |  |  |  | 43,350    |  |  | $ | 17.43 | 
|$18.54 to $20.15         |  |                     | 2,521,450 |                     |  |           | 9.38 |             |  | $         | 18.59 |  |  |  | 129,200   |  |  | $ | 19.44 | 
|                         |  |                     |           |                     |  |           |      |             |  |           |       |  |  |  |           |  |  |   |       | 
|                         |  |                     | 8,298,723 |                     |  |           | 7.17 |             |  | $         | 14.50 |  |  |  | 1,238,305 |  |  | $ | 12.41 | 
|                         |  |                     |           |                     |  |           |      |             |  |           |       |  |  |  |           |  |  |   |       | 



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

Under the 1994 Employee Stock Purchase Plan, the
Company is authorized to issue up to 4.5 million shares of
common stock to full-time employees, nearly all of who 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
356,646, 324,155 and

39



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)

322,329 shares to 2,627, 2,469 and 2,475
employees in 2003, 2002 and 2001, respectively. Compensation
cost is calculated as the fair value of the employees
purchase rights, which was estimated using the Black-Scholes
model with the following assumptions:

|                        |  |      |    |      |  |      |     |   |  |  |    |  
|----------------------- |  | ---- | -- | ---- |  | ---- | --- | - |  |  | -- | -
|                        |  | 2003 |    | 2002 |  | 2001
|                        |  |      |    |      |  |     
|Dividend yield          |  |      | 0  | %    |  |      | 0   | % |  |  | 0  | %
|Expected volatility     |  |      | 40 | %    |  |      | 45  | % |  |  | 45 | %
|Risk free interest rate |  |      | 1  | %    |  |      | 1.5 | % |  |  | 5  | %

The weighted-average fair value of those purchase
rights granted in 2003, 2002 and 2001 was $5.12, $6.12 and
$5.24, respectively.



|     |             
|---- | ------------
|(21) | Income Taxes

Income tax expense consists of:

|                 |                   |                          |        |      |        |      |        |   |        |   |        |   |        | 
|---------------- | ----------------- | ------------------------ | ------ | ---- | ------ | ---- | ------ | - | ------ | - | ------ | - | ------ | 
|                 |                   |                         
|                 |                   | Years Ended December 31,
|                 |                   |                         
|                 |                   | 2003                     |        | 2002 |        | 2001
|                 |                   |                          |        |      |        |     
|                 |                   |                         
|                 |                   | (In thousands)          
|Current expense: |                   |                          |        |      |        |      |        |   |        |   |        |  
|                 |                   | Federal                  |        | $    | 16,279 |      |        | $ | 16,904 |   |        | $ | 1,095  | 
|                 |                   | State                    |        |      | 1,395  |      |        |   | 1,000  |   |        |   | 186    | 
|                 |                   | Foreign                  |        |      | 371    |      |        |   |        |   |        |   |        | 
|                 |                   |                          |        |      |        |      |        |   |        |   |        |  
|                 |                   |                          | 18,045 |      |        |      | 17,904 |   |        |   | 1,281  |  
|                 |                   |                          |        |      |        |      |        |   |        |   |        |  
|                 | Deferred expense: |                          |        |      |        |      |        |   |        |   |        |   |       
|                 |                   | Federal                  |        |      | 28,153 |      |        |   | 17,147 |   |        |   | 14,779 | 
|                 |                   | State                    |        |      | 2,413  |      |        |   | 1,469  |   |        |   | 2,088  | 
|                 |                   |                          |        |      |        |      |        |   |        |   |        |  
|                 |                   |                          | 30,566 |      |        |      | 18,616 |   |        |   | 16,867 |  
|                 |                   |                          |        |      |        |      |        |   |        |   |        |  
|                 |                   | $                        | 48,611 |      |        | $    | 36,520 |   |        | $ | 18,148 |  
|                 |                   |                          |        |      |        |      |        |   |        |   |        |  

The Companys effective tax rate was 38%,
38% and 40% in 2003, 2002 and 2001, 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,                                           
|                                                        |                                                           |                                                                    
|                                                        |                                                           | 2003                                                                |        | 2002  |       | 2001
|                                                        |                                                           |                                                                     |        |       |       |     
|                                                        |                                                           |                                                                    
|                                                        |                                                           | (In thousands)                                                     
|Computed expected tax expense                         |                                                           | $                                                                   | 44,794 |       |       | $    | 33,638 |       |     | $ | 15,879 |      
|Increase (decrease) in income taxes resulting
    from: |                                                           |                                                                     |        |       |       |      |        |       |     |   |        |      
|                                                        | State income taxes, net of federal income tax
    benefit |                                                                     |        | 2,496 |       |      |        | 2,166 |     |   |        | 1,250 |      
|                                                        |                                                           | Nondeductible portion of Transportes EASO
    investment adjustment |        |       |       |      |        |       |     |   |        |       | 1,951 |  
|                                                        |                                                           | Other, net                                                          |        |       | 1,321 |      |        |       | 716 |   |        |       | (932  | )
|                                                        |                                                           |                                                                     |        |       |       |      |        |       |     |   |        |      
|                                                        |                                                           | $                                                                   | 48,611 |       |       | $    | 36,520 |       |     | $ | 18,148 |      
|                                                        |                                                           |                                                                     |        |       |       |      |        |       |     |   |        |      

40



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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,                  
|                          |                                                                            |                               
|                          |                                                                            | 2003                           |   | 2002    
|                          |                                                                            |                                |   |         
|                          |                                                                            |                               
|                          |                                                                            | (In thousands)                
|Deferred tax assets:      |                                                                            |                                |   |          |          |   |   |         
|                          | Claims accruals                                                            |                                | $ | 61,286   |          |   | $ | 56,690   |         
|                          | Accounts receivable due to allowance for doubtful
    accounts             |                                |   | 3,050    |          |   |   | 3,820    |         
|                          | Nondeductible accruals                                                     |                                |   | 2,486    |          |   |   | 2,331    |         
|                          | Derivative financial instruments                                           |                                |   | 3,004    |          |   |   | 3,800    |         
|                          | Other                                                                      |                                |   | 3,440    |          |   |   | 2,869    |         
|                          |                                                                            |                                |   |          |          |   |   |         
|                          |                                                                            | Total deferred tax assets      |   |          | 73,266   |   |   |          | 69,510   |  
|                          |                                                                            |                                |   |          |          |   |   |         
|Deferred tax liabilities: |                                                                            |                                |   |          |          |   |   |         
|                          | Property and equipment, principally due to
    differences in depreciation |                                |   | (286,041 | )        |   |   | (254,155 | )       
|                          | Prepaid taxes, licenses and permits deducted for
    tax purposes          |                                |   | (7,926   | )        |   |   | (7,266   | )       
|                          | Contested liabilities                                                      |                                |   | (17,116  | )        |   |   | (22,532  | )       
|                          | Other                                                                      |                                |   | (14,001  | )        |   |   | (6,809   | )       
|                          |                                                                            |                                |   |          |          |   |   |         
|                          |                                                                            | Total deferred tax liabilities |   |          | (325,084 | ) |   |          | (290,762 | )
|                          |                                                                            |                                |   |          |          |   |   |         
|                          |                                                                            | Net deferred tax liability     |   | $        | (251,818 | ) |   | $        | (221,252 | )
|                          |                                                                            |                                |   |          |          |   |   |         

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

|                                  |  |                |          |      |  |   |          |  
|--------------------------------- |  | -------------- | -------- | ---- |  | - | -------- | -
|                                  |  |               
|                                  |  | December 31,  
|                                  |  |               
|                                  |  | 2003           |          | 2002
|                                  |  |                |          |     
|                                  |  |               
|                                  |  | (In thousands)
|Current deferred tax asset        |  | $              | 3,133    |      |  | $ | 2,262    |  
|Noncurrent deferred tax liability |  |                | (254,951 | )    |  |   | (223,514 | )
|                                  |  |                |          |      |  |   |          |  
|Net deferred tax liability        |  | $              | (251,818 | )    |  | $ | (221,252 | )
|                                  |  |                |          |      |  |   |          |  



|     |                         
|---- | ------------------------
|(22) | 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 will recognize this
settlement amount as a reduction of insurance expense as the
insurance coverage is 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. These legal
expenses are being amortized on a straight-line basis over the
thirty-month period beginning July 1, 2002. In the event
that the Company does not receive the future insurance coverage
due to the liquidation, rehabilitation, bankruptcy or other
similar insolvency of the insurers, the Company will receive 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.

41



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)



|     |                
|---- | ---------------
|(23) | Claims Accruals

The Companys 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 adequate.

Claims accruals represent accruals for the
uninsured portion of pending claims at December 31, 2003
and 2002. 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.



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



| |                                      
| | -------------------------------------
| | Accounts Receivables and
    Payables

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
$195,700,000 as of December 31, 2003.



| |            
| | -----------
| | Limitations

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, 2003, the amounts that will
actually be realized or paid at settlement or maturity of the
instruments could be significantly different.



|     |                       
|---- | ----------------------
|(25) | 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 one year 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

42



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)

voluntary profit sharing contributions.
Employees rights to employer contributions vest after five
years from their date of employment. The Companys expense
totaled approximately $8.2 million, $6.0 million and
$6.5 million for 2003, 2002 and 2001, respectively.



|     |             
|---- | ------------
|(26) | Key Customer

Services provided to our largest customer,
Wal-Mart, generated 12% of operating revenue in 2003. No other
customer accounted for 10% or more of our operating revenue in
any reporting period.



|     |                           
|---- | --------------------------
|(27) | Related Party Transactions

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 whose services the
fleet operator then offers to Swift. The largest single fleet
operator with whom Swift does business is Interstate Equipment
Leasing, Inc. (IEL), a corporation wholly-owned by
Jerry Moyes, Swifts Chief Executive Officer. 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 2003, 2002 and
2001, Swift paid $17.3 million, $23.4 million and
$26.8 million to IEL for purchased transportation services.
At December 31, 2003 and 2002, $255,000 and $131,000,
respectively, was owed for these purchased transportation
services.

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, 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
2003, 2002 and 2001, Swift acquired new tractors and sold them
to IEL for $54.0 million, $35.7 million and
$27.6 million, respectively, and recognized fee income of
$1.9 million, $1.3 million and $1.0 million,
respectively.

In addition, Swift sells used tractors and
provides repair services and driver trainees to IEL. During
2003, 2002 and 2001, Swift sold used revenue equipment to IEL
totaling $319,000, $1.1 million and $20,000 respectively,
and recognized a gain of $23,000 and $83,000 in 2003 and 2002,
respectively, and a loss of $1,000 in 2001. At December 31,
2003 and 2002, nothing was owed to Swift for this equipment. In
2003, 2002 and 2001, respectively, Swift received
$4.9 million, $4.2 million and $3.6 million from
IEL for repair services and was paid $135,000, $116,000, and
$104,000 by IEL for various other services (including
reimbursement of driver trainee salary). At December 31,
2003 and 2002, $388,000 and $592,000, respectively, was owed to
Swift and zero was owed by Swift for these services.

Swift Aviation Services, Inc. and Swift Air,
Inc., corporations wholly-owned by Jerry Moyes, provide air
transportation services to Swift. These services totaled
$577,000, $764,000 and $860,000 for the years ended
December 31, 2003, 2002 and 2001, respectively. At
December 31, 2003 and 2002, $0 and $48,000, respectively,
was owed by Swift for these services.

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

In 2002 and 2001, Swift provided transportation,
repair and other services to Simon Transportation Services,
Inc., which is majority owned by Jerry Moyes. There was no
activity in 2003. Swift recognized $380,000 and $944,000 in
operating revenue in 2002 and 2001, respectively, related to the
services provided. At December 31, 2003 and 2002, nothing
was owed to Swift for these services.

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

43



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)

Refrigerated Service, Inc. (Central
Refrigerated), a privately held refrigerated truckload carrier.
Jerry Moyes owns an approximately 40% interest in Central
Freight and serves as its Chairman. Mr. Moyes is the
principal stockholder of Central Refrigerated. Swift also
provides repair, facilities leases and other truckstop services
to Central Freight and Central Refrigerated. Swift recognized
$22.6 million, $20.5 million and $10.9 million in
operating revenue in 2003, 2002 and 2001, respectively, for
these services to Central Freight and Central Refrigerated. At
December 31, 2003 and 2002, $957,000 and $2.8 million,
respectively, was owed to Swift for these services.

The rates that Swift charges Central Freight and
Central Refrigerated 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 truckstop services is
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 $612,000, $417,000 and
$492,000 to the carrier for facilities rental in 2003, 2002 and
2001, respectively.

The Company purchased $2.4 million,
$4.3 million and $466,000 of refrigeration units and parts
in 2003, 2002 and 2001, respectively, from Thermo King West, a
Thermo King franchise owned by William F. Riley III, an
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 franchisees.
Thermo King West is the exclusive franchisee 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. For 2004, Swift intends to negotiate
with both suppliers and award the contract to one of them based
on such negotiations.

In 2001, M.S. Carriers agreed to sell its
interest in an aircraft to Michael Starnes, who is also a
current member of the Board of Directors. The sale price was
$3,240,000 and M.S. Carriers recognized a loss of $430,000.

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



|     |              
|---- | -------------
|(28) | Contingencies

The Company is involved in certain claims and
pending litigation 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.



|     |                                                     
|---- | ----------------------------------------------------
|(29) | 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 consists of 825 tractors,
including 140 owner operators, and 1,400 trailers of which 455
tractors and 1,100 trailers are 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 is expected to enhance 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.

44



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##### Table of Contents



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 customer relationship intangible asset is
being amortized on a straight-line basis over a 15-year period
at $2.7 million per year. All of the goodwill will be
deductible for tax purposes.

The results of operations for the years ended
December 31, 2003, 2002 and 2001 as though the Merit
acquisition had been completed as of the beginning of each
respective period are as follows:

|                           |  |                                   |           |      |  |      |           |  |  |   |           | 
|-------------------------- |  | --------------------------------- | --------- | ---- |  | ---- | --------- |  |  | - | --------- | 
|                           |  |                                  
|                           |  | Year Ended December 31,          
|                           |  |                                  
|                           |  | 2003                              |           | 2002 |  | 2001
|                           |  |                                   |           |      |  |     
|                           |  |                                  
|                           |  | (In thousands, except share data)
|Operating revenue          |  | $                                 | 2,471,000 |      |  | $    | 2,245,000 |  |  | $ | 2,240,000 | 
|Net earnings               |  | $                                 | 82,954    |      |  | $    | 64,204    |  |  | $ | 28,909    | 
|Diluted earnings per share |  | $                                 | .98       |      |  | $    | .74       |  |  | $ | .34       | 



|     |                             
|---- | ----------------------------
|(30) | Industry Segment Information

The Company operates predominantly in one
industry, road transportation, as a truckload motor carrier
subject to regulation by the Department of Transportation and
various state regulatory authorities.

The Companys two reportable segments are
Swift Transportation and M.S. Carriers. Beginning
January 1, 2002, these segments were operationally combined
and are no longer separate reportable segments.

|                    |             |                   |           |           |  
|------------------- | ----------- | ----------------- | --------- | --------- | -
|                    |             | Year Ended       
|                    |             | December 31, 2001
|                    |             |                  
|                    |             | (In thousands)   
|Operating revenue:  |             |                   |           |          
|                    | Swift       |                   | $         | 1,403,897 |  
|                    | MS Carriers |                   |           | 708,324   |  
|                    |             |                   |           |          
|                    |             | $                 | 2,112,221 |          
|                    |             |                   |           |          
|Net earning (loss): |             |                   |           |          
|                    | Swift       |                   | $         | 42,645    |  
|                    | MS Carriers |                   |           | (15,424   | )
|                    |             |                   |           |          
|                    |             | $                 | 27,221    |          
|                    |             |                   |           |          

45



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS   (Continued)

(31) Quarterly Results of Operations
(Unaudited)

|                             |  |                                   |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|---------------------------- |  | --------------------------------- | ------- | ------- |  | ------- | ------- | ------- |  | - | ------- |  |  | - | ------- | 
|                             |  | First                             |         | Second  |  | Third   |         | Fourth 
|                             |  | Quarter                           |         | Quarter |  | Quarter |         | Quarter
|                             |  |                                   |         |         |  |         |         |        
|                             |  |                                  
|                             |  | (In thousands, except share data)
|Year Ended December 31, 2003 |  |                                   |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|Operating revenue            |  | $                                 | 551,303 |         |  | $       | 584,909 |         |  | $ | 623,875 |  |  | $ | 637,568 | 
|Operating income             |  |                                   | 18,345  |         |  |         | 34,702  |         |  |   | 42,152  |  |  |   | 45,842  | 
|Net earnings                 |  |                                   | 8,897   |         |  |         | 19,161  |         |  |   | 24,576  |  |  |   | 26,737  | 
|Basic earnings per share     |  |                                   | .11     |         |  |         | .23     |         |  |   | .29     |  |  |   | .32     | 
|Diluted earnings per share   |  |                                   | .10     |         |  |         | .23     |         |  |   | .29     |  |  |   | .31     | 
|Year Ended December 31, 2002 |  |                                   |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|Operating revenue            |  | $                                 | 475,780 |         |  | $       | 528,595 |         |  | $ | 536,955 |  |  | $ | 560,142 | 
|Operating income             |  |                                   | 17,752  |         |  |         | 35,766  |         |  |   | 33,601  |  |  |   | 30,020  | 
|Net earnings                 |  |                                   | 9,410   |         |  |         | 17,682  |         |  |   | 16,340  |  |  |   | 16,156  | 
|Basic earnings per share     |  |                                   | .11     |         |  |         | .20     |         |  |   | .19     |  |  |   | .19     | 
|Diluted earnings per share   |  |                                   | .11     |         |  |         | .20     |         |  |   | .19     |  |  |   | .19     | 



|     |                                                     
|---- | ----------------------------------------------------
|(32) | Subsequent Event  Acquisition of
    Trans-Mex, Inc

The Company completed its acquisition of an
additional 51% interest in Trans-Mex, Inc. S.A. de C.V. in
January 2004. After this acquisition, the Company owns 100% of
this Mexican truckload carrier. The purchase price for this 51%
interest was $31 million consisting of $11 million in
cash and 942,155 shares of Company common stock. The
Company has agreed to file a registration statement with the
Securities and Exchange Commission for these shares within the
next 90 days. Trans-Mex is one of the top five
international trucking companies operating in Mexico. Through
this acquisition, the Company becomes the only United States
trucking company with a 100% ownership interest in a Mexican
carrier. The Company utilized Trans-Mex as a provider of freight
services for our customers and paid Trans-Mex
$23.7 million, $15.1 million, and $9.0 million in
2003, 2002 and 2001, respectively, which is included in
purchased transportation on the consolidated financial
statements.

46



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##### Table of Contents








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

We have 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

We carried out an evaluation as of the end of the
period covered by this Form 10-K, under the supervision and
with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation,
our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are
effective in enabling us to record, process, summarize, and
report information required to be included in our periodic SEC
filings within the required time period. There have been no
significant changes in our internal control over financial
reporting or in other factors that could significantly affect
internal controls subsequent to the date we carried out our
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.




PART III






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

Information required by this Item with respect to
our continuing directors, nominees and executive officers is set
forth under the captions Information Concerning Directors,
Nominees and Officers, Executive Officers of
Swift and Section 16(a) Beneficial Ownership
Reporting Compliance in the our Notice and Proxy Statement
relating to our 2004 Annual Meeting of Stockholders (the
2004 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, our
2004 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 of the Company, 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 hereto. 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 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 2004
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 2004 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 2004 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 Compensa-

47



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##### Table of Contents



tion Plan Information as of December 31,
2003 in the 2004 Notice and Proxy Statement and is
incorporated herein by reference.







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

Information required by this Item 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 2004 Notice and Proxy
Statement and is incorporated herein by reference.






|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal Accountant 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 Accountant Fees and
Services in the 2004 Notice and Proxy Statement and is
incorporated herein by reference.




PART IV




Item 15.Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K

(a) Financial Statements and
Schedules.



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

|    |  |                                                                                                                                                                                                                                                                                                                                                         |  |                  |            | 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ---------- | 
|    |  |                                                                                                                                                                                                                                                                                                                                                         |  | Page or         
|    |  |                                                                                                                                                                                                                                                                                                                                                         |  | Method of Filing
|    |  |                                                                                                                                                                                                                                                                                                                                                         |  |                 
|(1) |  | Report of KPMG LLP                                                                                                                                                                                                                                                                                                                                      |  |                  | Page 24    | 
|(2) |  | Consolidated Financial Statements and Notes to
    Consolidated Financial Statements of the Company, including
    Consolidated Balance Sheets as of December 31, 2003 and
    2002 and related Consolidated Statements of Earnings,
    Stockholders Equity and Cash Flows for each of the years
    in the three-year period ended December 31, 2003 |  |                  | Page 25-46 | 



| |                                   
| | ----------------------------------
| | (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) Reports on Form 8-K



| |                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A Report on Form 8-K was filed on
    February 3, 2004, which furnished, under Item 12, a
    press release announcing financial results for the quarter ended
    December 31, 2003.

48



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##### Table of Contents



(c) Exhibits.

|        |    |             |  |                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                    
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  |                                                                                                                                                                                                                                                                                                                         
|Number  |    | Description |  | Page or Method of Filing                                                                                                                                                                                                                                                                                                
|        |    |             |  |                                                                                                                                                                                                                                                                                                                         
|        | 2  | .1          |  | Merger Agreement, dated as of December 11,
    2000, among Swift Transportation Co., Inc., a Nevada
    corporation, Sun Merger, Inc., a Tennessee corporation and
    wholly-owned subsidiary of Swift Transportation Co., Inc.,
    and M.S. Carriers, Inc., a Tennessee corporation                                   |  | Incorporated by reference to Exhibit 2.1 of
    the Registrants Current Report on Form 8-K dated
    December 11, 2000 (the 12/11/2000 8-K)                                     
|        | 3  | .1          |  | Amended and Restated Articles of Incorporation of
    the Registrant                                                                                                                                                                                                                                                     |  | Incorporated by reference to Exhibit 4.1 of
    the Registrants Registration Statement on Form S-8
    (Registration No. 333-85940)                                               
|        | 3  | .2          |  | Bylaws of the Registrant                                                                                                                                                                                                                                                                                                 |  | Incorporated by reference to Exhibit 3.2 of
    the Registrants Registration Statement on Form S-3
    (Registration No. 33-66034)                                                
|        | 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 (the 1992 Form 10-K)                             
|        | 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 | .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          |  | Note agreement dated February 26, 1996 by
    and between Swift Transportation Co., Inc. and Great-West
    Life & Annuity Insurance Company                                                                                                                                                                             |  | Incorporated by reference to Exhibit 10.12
    of the Companys Annual Report on Company Form 10-K for the
    year ended December 31,1995 (the 1995 Form 10-K)                  
|        | 10 | .6          |  | Note agreement dated January 16, 1997 by and
    between Swift Transportation Co., Inc. and Wells Fargo
    Bank, N.A., ABN Amro Bank N.V., The Chase Manhattan Bank and The
    First National Bank of Chicago                                                                                                          |  | Incorporated by reference to Exhibit 10.11
    of the Companys Annual Report on Form 10-K for the year
    ended December 31,1996 (the 1996 Form 10-K)                          
|        | 10 | .6.1        |  | First Modification Agreement to
    Note Agreement dated January 16, 1997 by and between
    Swift Transportation Co., Inc. and Wells Fargo Bank, N.A.,
    ABN Amro Bank N.V., The Chase Manhattan Bank and The First
    National Bank of Chicago                                                                      |  | Incorporated by Reference to Exhibit 10.13
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 1998 (the 1998 Third
    Quarter Form 10-Q)
|        | 10 | .6.2        |  | Second Modification Agreement to
    Note Agreement dated January 17, 1997 by and between
    Swift Transportation Co., Inc. and Wells Fargo Bank, N.V.,
    ABN Amro Bank N.V., The First National Bank of Chicago, Norwest
    Bank Arizona, N.A., Keybank National Association and Union Bank
    of California, N.A. |  | Incorporated by reference to Exhibit 10.14
    of the 1998 Third Quarter Form 10-Q                                                                                                 

49



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                   |  |                                                                                                                                                                                
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  |                                                                                                                                                                                                                                                  
|Number  |    | Description |  | Page or Method of Filing                                                                                                                                                                                                                         
|        |    |             |  |                                                                                                                                                                                                                                                  
|        | 10 | .7          |  | 1999 Stock Option Plan, as amended*                                                                                                                                                                                                               |  | Incorporated by reference to Exhibit 4.3 of
    the Registrants Registration Statement on Form S-8
    (Registration No. 333-53566)                                           
|        | 10 | .8          |  | Non-Employee Directors Stock Option Plan (Amended
    and Restated as of June 7, 2000)*                                                                                                                                                           |  | Incorporated by reference to Notice and Proxy
    Statement For Annual Meeting of Stockholders to be held on
    June 7, 2000 (the 2000 Proxy Statement)                     
|        | 10 | .9          |  | Receivables Sales Agreement Dated As Of
    December 30, 1999 Among Swift Receivables Corporation,
    Swift Transportation Corporation, ABN AMRO Bank N.V., and
    Amsterdam Funding Corporation                                                |  | Incorporated by reference to Exhibit 10.16
    of the Companys Annual Report on Form 10-K for the year
    ended December 31, 1999 (the 1999 Form 10-K)                     
|        | 10 | .9.1        |  | Second Amendment Dated December 27, 2001 to
    Receivables Sale Agreement Dated As Of December 30, 1999
    Among Swift Receivables Corporation, Swift Transportation
    Corporation, ABN AMRO Bank N.V., and Amsterdam Funding
    Corporation |  | Incorporated by reference to Exhibit 10.17
    of the Companys Annual Report on Form 10-K for the year
    ended December 31, 2001 (the 2001
    Form 10-K)                 
|        | 10 | .9.2        |  | Fourth Amendment Dated December 26, 2002 to
    Receivables Sale Agreement Dated As Of December 30, 1999
    Among Swift Receivables Corporation, Swift Transportation
    Corporation, ABN AMRO Bank N.V., and Amsterdam Funding
    Corporation |  | Incorporated by reference to Exhibit 10.21
    of the Companys Annual Report on Form 10-K for the year
    ended December 31, 2002 (the 2002
    Form 10-K)                 
|        | 10 | .9.3        |  | Fifth Amendment Dated December 24, 2003 to
    Receivables Sale Agreement Dated As Of December 30, 1999
    Among Swift Receivables Corporation, Swift Transportation
    Corporation, ABN AMRO Bank N.V., and Amsterdam Funding
    Corporation  |  | Filed herewith                                                                                                                                                                 
|        | 10 | .10         |  | 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 1999 Form 10-K                                                                                                           
|        | 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 | .12         |  | Operating Agreement of Transplace.com, LLC                                                                                                                                                                                                        |  | Incorporated by reference to Exhibit 10.19
    of the 2000 First Quarter Form 10-Q                                                                                             
|        | 10 | .13         |  | Initial Subscription Agreement of Transplace.com,
    LLC                                                                                                                                                                                         |  | Incorporated by reference to Exhibit 10.20
    of the 2000 First Quarter Form 10-Q                                                                                             
|        | 10 | .14         |  | 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 (the 2002 First Quarter
    Form 10-Q)
|        | 10 | .15         |  | Offer of Employment Letter to Gary Enzor                                                                                                                                                                                                          |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2002 (the 2002 Second Quarter
    Form 10-Q)

50



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                           
|------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Number  |    | Description |  | Page or Method of Filing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 10 | .16         |  | Revolving Credit Agreement, dated as of
    November 21, 2002, 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, SunTrust
    Bank, as Administrative Agent, Wells Fargo Bank, N.A. and
    KeyBank National Association, as Co-Syndication Agents, and
    U.S. Bank National Association and LaSalle National
    Association, as Co-Documentation Agents |  | Incorporated by reference to Exhibit 10.1 of
    the Companys Current Report on Form 8-K dated
    November 25, 2002 (the 11/25/02 8-K)
|        | 10 | .17         |  | 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     
|        | 14 |             |  | Code of Ethics                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Filed herewith                                                                                                                            
|        | 21 |             |  | Subsidiaries of Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | Filed herewith                                                                                                                            
|        | 23 |             |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Filed herewith                                                                                                                            
|        | 24 |             |  | Powers of Attorney                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | See signature page                                                                                                                        
|        | 31 | .1          |  | Rule 13a-14(a)/15d-14(a) Certificate of
    Jerry Moyes, Chairman, President and Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                        |  | Filed herewith                                                                                                                            
|        | 31 | .2          |  | Rule 13a-14(a)/15d-14(a) Certificate of
    Gary R. Enzor, Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Filed herewith                                                                                                                            
|        | 32 |             |  | Certification pursuant to 18 U.S.C.
    section 1350, as adopted pursuant to section 906 of
    the Sarbanes-Oxley Act of 2002  Jerry Moyes and Gary
    R. Enzor                                                                                                                                                                                                                                                                                                                                              |  | Furnished herewith                                                                                                                        



---



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

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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
15th day of March, 2004.



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



| |    |                   
| | -- | ------------------
| | By | /s/ JERRY C. MOYES

| |                                     
| | ------------------------------------
| |                                     
| | Jerry C. Moyes                      
| | Chairman of the Board, President and
| | Chief Executive Officer             

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS,each of the undersigned persons
constitutes and appoints Jerry Moyes and Gary R. Enzor, and each
of them, his true and lawful attorney-in-fact and agent with
full power of substitution and resubstitution, for him and in
his name, place, and stead, in any and all capacities, to sign
the Annual Report on Form 10-K for the fiscal year ended
December 31, 2003, for filing with the Securities and
Exchange Commission by Swift Transportation Co., Inc., a
Nevada corporation, together with any and all amendments to such
Form 10-K, and to file the same with all exhibits thereto,
and all documents in connection therewith, with the Securities
and Exchange Commission, granting to such attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully and to all intents
and purposes as he might or could do in person, hereby ratifying
and confirming all that said such attorneys-in-fact and agents,
or each of them, may lawfully do or cause to be done by virtue
hereof.

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/ JERRY C. MOYESJerry C. Moyes             |  | Chairman of the Board, President and Chief
    Executive Officer (Principal Executive Officer) |  | March 15, 2004
|                                            
|/s/ WILLIAM F. RILEY IIIWilliam F. Riley III |  | Senior Executive Vice President, Secretary, and
    Director                                   |  | March 15, 2004
|                                            
|/s/ MICHAEL S. STARNESMichael S. Starnes     |  | President of M.S. Carriers, Inc. and Director                                                  |  | March 15, 2004
|                                            
|/s/ ALPHONSE E. FREIAlphonse E. Frei         |  | Director                                                                                       |  | March 15, 2004
|                                            
|/s/ DAVID GOLDMANDavid Goldman               |  | Director                                                                                       |  | March 15, 2004
|                                            
|/s/ DALE M. JENSENDale M. Jensen             |  | Director                                                                                       |  | March 15, 2004

S-1



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|                                         |  |                         |  |                |  | 
|---------------------------------------- |  | ----------------------- |  | -------------- |  | 
|                                         |  |                         |  |               
|Signature                                |  | Title                   |  | Date          
|                                         |  |                         |  |               
|                                        
|/s/ EARL H. SCUDDEREarl H. Scudder       |  | Director                |  | March 15, 2004
|                                        
|/s/ GARY R. ENZORGary R. Enzor           |  | Chief Financial Officer |  | March 15, 2004
|                                        
|/s/ STEPHEN R. ATTWOODStephen R. Attwood |  | Corporate Controller    |  | March 15, 2004

S-2



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##### Table of Contents



EXHIBIT INDEX

|        |    |             |  |                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                    
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  |                                                                                                                                                                                                                                                                                                                         
|Number  |    | Description |  | Page or Method of Filing                                                                                                                                                                                                                                                                                                
|        |    |             |  |                                                                                                                                                                                                                                                                                                                         
|        | 2  | .1          |  | Merger Agreement, dated as of December 11,
    2000, among Swift Transportation Co., Inc., a Nevada
    corporation, Sun Merger, Inc., a Tennessee corporation and
    wholly-owned subsidiary of Swift Transportation Co., Inc.,
    and M.S. Carriers, Inc., a Tennessee corporation                                   |  | Incorporated by reference to Exhibit 2.1 of
    the Registrants Current Report on Form 8-K dated
    December 11, 2000 (the 12/11/2000 8-K)                                     
|        | 3  | .1          |  | Amended and Restated Articles of Incorporation of
    the Registrant                                                                                                                                                                                                                                                     |  | Incorporated by reference to Exhibit 4.1 of
    the Registrants Registration Statement on Form S-8
    (Registration No. 333-85940)                                               
|        | 3  | .2          |  | Bylaws of the Registrant                                                                                                                                                                                                                                                                                                 |  | Incorporated by reference to Exhibit 3.2 of
    the Registrants Registration Statement on Form S-3
    (Registration No. 33-66034)                                                
|        | 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 (the 1992 Form 10-K)                             
|        | 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 | .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          |  | Note agreement dated February 26, 1996 by
    and between Swift Transportation Co., Inc. and Great-West
    Life & Annuity Insurance Company                                                                                                                                                                             |  | Incorporated by reference to Exhibit 10.12
    of the Companys Annual Report on Company Form 10-K for the
    year ended December 31,1995 (the 1995 Form 10-K)                  
|        | 10 | .6          |  | Note agreement dated January 16, 1997 by and
    between Swift Transportation Co., Inc. and Wells Fargo
    Bank, N.A., ABN Amro Bank N.V., The Chase Manhattan Bank and The
    First National Bank of Chicago                                                                                                          |  | Incorporated by reference to Exhibit 10.11
    of the Companys Annual Report on Form 10-K for the year
    ended December 31,1996 (the 1996 Form 10-K)                          
|        | 10 | .6.1        |  | First Modification Agreement to
    Note Agreement dated January 16, 1997 by and between
    Swift Transportation Co., Inc. and Wells Fargo Bank, N.A.,
    ABN Amro Bank N.V., The Chase Manhattan Bank and The First
    National Bank of Chicago                                                                      |  | Incorporated by Reference to Exhibit 10.13
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 1998 (the 1998 Third
    Quarter Form 10-Q)
|        | 10 | .6.2        |  | Second Modification Agreement to
    Note Agreement dated January 17, 1997 by and between
    Swift Transportation Co., Inc. and Wells Fargo Bank, N.V.,
    ABN Amro Bank N.V., The First National Bank of Chicago, Norwest
    Bank Arizona, N.A., Keybank National Association and Union Bank
    of California, N.A. |  | Incorporated by reference to Exhibit 10.14
    of the 1998 Third Quarter Form 10-Q                                                                                                 



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|        |    |             |  |                                                                                                                                                                                                                                                   |  |                                                                                                                                                                                
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  |                                                                                                                                                                                                                                                  
|Number  |    | Description |  | Page or Method of Filing                                                                                                                                                                                                                         
|        |    |             |  |                                                                                                                                                                                                                                                  
|        | 10 | .7          |  | 1999 Stock Option Plan, as amended*                                                                                                                                                                                                               |  | Incorporated by reference to Exhibit 4.3 of
    the Registrants Registration Statement on Form S-8
    (Registration No. 333-53566)                                           
|        | 10 | .8          |  | Non-Employee Directors Stock Option Plan (Amended
    and Restated as of June 7, 2000)*                                                                                                                                                           |  | Incorporated by reference to Notice and Proxy
    Statement For Annual Meeting of Stockholders to be held on
    June 7, 2000 (the 2000 Proxy Statement)                     
|        | 10 | .9          |  | Receivables Sales Agreement Dated As Of
    December 30, 1999 Among Swift Receivables Corporation,
    Swift Transportation Corporation, ABN AMRO Bank N.V., and
    Amsterdam Funding Corporation                                                |  | Incorporated by reference to Exhibit 10.16
    of the Companys Annual Report on Form 10-K for the year
    ended December 31, 1999 (the 1999 Form 10-K)                     
|        | 10 | .9.1        |  | Second Amendment Dated December 27, 2001 to
    Receivables Sale Agreement Dated As Of December 30, 1999
    Among Swift Receivables Corporation, Swift Transportation
    Corporation, ABN AMRO Bank N.V., and Amsterdam Funding
    Corporation |  | Incorporated by reference to Exhibit 10.17
    of the Companys Annual Report on Form 10-K for the year
    ended December 31, 2001 (the 2001
    Form 10-K)                 
|        | 10 | .9.2        |  | Fourth Amendment Dated December 26, 2002 to
    Receivables Sale Agreement Dated As Of December 30, 1999
    Among Swift Receivables Corporation, Swift Transportation
    Corporation, ABN AMRO Bank N.V., and Amsterdam Funding
    Corporation |  | Incorporated by reference to Exhibit 10.21
    of the Companys Annual Report on Form 10-K for the year
    ended December 31, 2002 (the 2002
    Form 10-K)                 
|        | 10 | .9.3        |  | Fifth Amendment Dated December 24, 2003 to
    Receivables Sale Agreement Dated As Of December 30, 1999
    Among Swift Receivables Corporation, Swift Transportation
    Corporation, ABN AMRO Bank N.V., and Amsterdam Funding
    Corporation  |  | Filed herewith                                                                                                                                                                 
|        | 10 | .10         |  | 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 1999 Form 10-K                                                                                                           
|        | 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 | .12         |  | Operating Agreement of Transplace.com, LLC                                                                                                                                                                                                        |  | Incorporated by reference to Exhibit 10.19
    of the 2000 First Quarter Form 10-Q                                                                                             
|        | 10 | .13         |  | Initial Subscription Agreement of Transplace.com,
    LLC                                                                                                                                                                                         |  | Incorporated by reference to Exhibit 10.20
    of the 2000 First Quarter Form 10-Q                                                                                             
|        | 10 | .14         |  | 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 (the 2002 First Quarter
    Form 10-Q)
|        | 10 | .15         |  | Offer of Employment Letter to Gary Enzor                                                                                                                                                                                                          |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2002 (the 2002 Second Quarter
    Form 10-Q)



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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                           
|------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Number  |    | Description |  | Page or Method of Filing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 10 | .16         |  | Revolving Credit Agreement, dated as of
    November 21, 2002, 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, SunTrust
    Bank, as Administrative Agent, Wells Fargo Bank, N.A. and
    KeyBank National Association, as Co-Syndication Agents, and
    U.S. Bank National Association and LaSalle National
    Association, as Co-Documentation Agents |  | Incorporated by reference to Exhibit 10.1 of
    the Companys Current Report on Form 8-K dated
    November 25, 2002 (the 11/25/02 8-K)
|        | 10 | .17         |  | 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     
|        | 14 |             |  | Code of Ethics                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Filed herewith                                                                                                                            
|        | 21 |             |  | Subsidiaries of Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | Filed herewith                                                                                                                            
|        | 23 |             |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Filed herewith                                                                                                                            
|        | 24 |             |  | Powers of Attorney                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | See signature page                                                                                                                        
|        | 31 | .1          |  | Rule 13a-14(a)/15d-14(a) Certificate of
    Jerry Moyes, Chairman, President and Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                        |  | Filed herewith                                                                                                                            
|        | 31 | .2          |  | Rule 13a-14(a)/15d-14(a) Certificate of Gary
    R. Enzor, Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Filed herewith                                                                                                                            
|        | 32 |             |  | Certification pursuant to 18 U.S.C.
    section 1350, as adopted pursuant to section 906 of
    the Sarbanes-Oxley Act of 2002  Jerry Moyes and Gary
    R. Enzor                                                                                                                                                                                                                                                                                                                                              |  | Furnished herewith                                                                                                                        



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