SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                   For the fiscal year ended December 31, 1998

                                       OR

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

           For the transition period from ___________ to ____________

                           Commission File No. 0-18605


                         SWIFT TRANSPORTATION CO., INC.
             (Exact name of registrant as specified in its charter)

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

                    2200 South 75th Avenue Phoenix, AZ 85043
               (Address of principal executive offices) (Zip Code)

                                 (602) 269-9700
              (Registrant's telephone number, including area code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                      None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
     Common Stock, $.001 par value                    Nasdaq National Market

Indicate by check mark 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 [X]  No [ ]

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. [ ]

At  March 16,  1999,  the   aggregate  market  value  of  common  stock  held by
non-affiliates of the Registrant was $504,386,574.

The number of shares  outstanding of the Registrant's  common stock on March 16,
1999 was 42,511,914.

                       DOCUMENTS INCORPORATED BY REFERENCE

Materials from the Registrant's  Notice and Proxy Statement relating to the 1999
Annual Meeting of  Stockholders  have been  incorporated  by reference into Part
III, Items 10, 11, 12 and 13.

                                                        Exhibit Index at page 43
                                                                  Total pages 52
<PAGE>
                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I

   Item 1.  Business.....................................................    3
   Item 2.  Properties...................................................   10
   Item 3.  Legal Proceedings............................................   11
   Item 4.  Submission of Matters to a Vote of Security Holders..........   11

PART II

   Item 5.  Market for the Registrant's Common Stock and Related
              Stockholder Matters........................................   11
   Item 6.  Selected Financial and Operating Data........................   13
   Item 7.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations........................   14
   Item 7A. Quantitative and Qualitative Disclosures about Market Risk...   21
   Item 8.  Financial Statements and Supplementary Data..................   21
   Item 9.  Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure........................   42

PART III

   Item 10. Directors and Executive Officers of the Registrant...........   42
   Item 11. Executive Compensation.......................................   42
   Item 12. Security Ownership of Certain Beneficial Owners
              and Management.............................................   42
   Item 13. Certain Relationships and Related Transactions...............   42

PART IV

   Item 14. Exhibits, Financial Statement Schedules and Reports
              on Form 8-K................................................   43

SIGNATURES...............................................................  S-1

                                       2
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                                     PART I

ITEM 1. BUSINESS

GENERAL

         Swift  Transportation Co., Inc. (with its subsidiaries,  "Swift" or the
"Company") is the third largest publicly-held, national truckload carrier in the
United  States.  Swift operates  primarily  throughout  the  continental  United
States,  combining  strong  regional  operations  with  a  transcontinental  van
operation.  The principal  types of freight  transported by Swift include retail
and discount  department store merchandise,  manufactured goods, paper products,
non-perishable food, beverages and beverage containers and building materials.

         By  meeting  its  customers'  specific  needs  for  both  regional  and
transcontinental service and through selective acquisitions, Swift has been able
to achieve  significant  growth in revenues over the past five years.  Operating
revenue has grown at a compound  annual growth rate of 25.8% from $277.0 million
in 1993 to $873.4  million in 1998.  During that same period,  net earnings have
grown at a compound  annual  growth  rate of 35.2%  from $12.3  million to $55.5
million.

         Swift  Transportation Co., Inc., a Nevada corporation  headquartered in
Sparks,  Nevada, is a holding company for the operating corporations named Swift
Transportation Co., Inc. and Swift Transportation  Corporation.  These companies
are collectively referred to herein as the "Company." The Company's headquarters
are located at 2200 South 75th Avenue, Phoenix, Arizona 85043, and its telephone
number is (602) 269-9700.

         This Annual  Report on Form 10-K contains  forward-looking  statements.
Additional written or oral forward-looking statements may be made by the Company
from time to time in filings  with the  Securities  and Exchange  Commission  or
otherwise.  The words  "believe,"  "expect,"  "anticipate,"  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 and plans relating to products or services of the
Company,  as  well  as  assumptions  relating  to  the  foregoing.  The  Company
undertakes  no  obligation  to  publicly  update or revise  any  forward-looking
statements, whether as a result of new information, future events, or otherwise.

         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  and  Related
Stockholder Matters" in this Annual Report.

OPERATING STRATEGY

         Swift focuses on achieving high density for service-sensitive customers
in  short-to-medium  haul traffic  lanes.  Through its network of 30  terminals,
Swift  is able to  provide  regional  service  on a  nationwide  basis.  Swift's
terminal network establishes a local market presence in the regions Swift serves
and  enables  Swift  to  respond  more  rapidly  to  its   customers'   changing
requirements.  This  regional  network  also  enables  Swift to  enhance  driver
recruitment and retention by returning drivers to their homes regularly,  reduce
its  purchases  of higher  priced fuel at truck stops and  expedite  lower cost,

                                       3
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in-house equipment  maintenance.  With an average length of haul of 567 miles in
1998, Swift is able to limit its direct  competition with railroads,  intermodal
services and longer-haul, less specialized truckload carriers.

         Swift seeks to provide premium service with commensurate  rates, rather
than compete primarily on the basis of price. The principal  elements of Swift's
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;  a  fully-integrated  computer system to
monitor shipment status and variations from schedule; an onboard  communications
system  that  enables  the  Company to  dispatch  and  monitor  traffic;  timely
deliveries;  and extra  equipment  to respond  promptly  to  customers'  varying
requirements.

         To manage the higher costs and greater logistical  complexity  inherent
in operating in short-to-medium haul traffic lanes, Swift employs  sophisticated
computerized   management   control  systems  to  monitor  key  aspects  of  its
operations,  such as  availability  of equipment,  truck  productivity  and fuel
consumption. Swift has a three-year replacement program for substantially all of
its  tractors,  which allows Swift to maximize  equipment  utilization  and fuel
economy by capitalizing on improved engine  efficiency and vehicle  aerodynamics
and to minimize  maintenance  expense.  For 1998 and 1997,  Swift  maintained an
operating ratio of 88.7% and 89.6%, respectively.

GROWTH STRATEGY

         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 in recent  years.  The  truckload  industry  remains  highly
fragmented,  and  management  believes  that  overall  growth  in the  truckload
industry and continued  industry  consolidation  will present  opportunities for
well managed,  financially  stable carriers such as Swift to expand. The Company
intends to take  advantage  of growth  opportunities  through a  combination  of
internal growth and selective acquisitions.

         The key elements of Swift's growth strategy are:

        +   Strengthen Core Carrier Relationships.  Swift intends to continue to
            strengthen  its core carrier  relationships,  expand its services to
            its existing  customers  and pursue new customer  relationships.  By
            concentrating  on expanding its services to its existing  customers,
            Swift's  revenues from its top 25 customers of 1996 increased by 50%
            from 1996 to 1998. The largest 25, 10 and 5 customers, respectively,
            accounted for 46%, 33% and 22% of revenues in 1998, with no customer
            accounting  for more than 7% of Swift's  revenues  during  that same
            period. In addition to expanding its services to existing customers,
            Swift  actively  pursues new traffic  commitments  from high volume,
            financially stable shippers for whom it has not previously  provided
            services.

        +   Pursue  Strategic  Acquisitions.  Swift's  revenue  growth  has been
            attributable,  in significant part, to eight acquisitions  completed
            in the last ten years.  These  acquisitions  have  enabled  Swift to
            expand from its  historical  operations  base in the Western  United
            States and develop a strong  regional  presence  in the  Midwestern,
            Eastern and Southeastern  United States.  Swift generally limits its
            consideration of acquisitions to those it believes will be accretive
            to  earnings  within  six  months,   and  historically  all  of  its
            acquisitions have met this objective.

        +   Exploit  Private  Fleet  Outsourcing.  A number  of large  companies
            maintain   their  own   private   trucking   fleets  to   facilitate
            distribution  of  their   products.   Swift  believes  that  a  high
            percentage  of  private  fleet  traffic is  short-to-medium  haul in
            nature, traveling an average of 500 miles or less per round trip. In
            order to reduce  operating costs  associated with private fleets,  a
            number  of  large   companies   have   begun  to   outsource   their
            transportation and logistics requirements. Swift believes that its

                                       4
<PAGE>
            strong  regional  operations and average length of haul of less than
            600 miles  position it to take  advantage  of this trend,  and Swift
            already  serves as a preferred  supplier  or "core  carrier" to many
            major shippers who are  considering,  or may in the future consider,
            outsourcing their transportation and logistics requirements.

OPERATIONS

         In the Western United States, Swift has developed a network of regional
terminals and offices strategically located in areas which have strong,  diverse
economies  and  provide  access  to other key  Western  population  centers.  In
addition to Phoenix,  Swift's Western  terminals are located in the areas of Los
Angeles and San Francisco,  California;  Portland, Oregon; Salt Lake City, Utah;
Lewiston,  Idaho;  Reno,  Nevada;  Pueblo and Denver,  Colorado.  In the Eastern
United  States,  Swift has  terminals  located  in Auburn,  New York;  Carlisle,
Pennsylvania;  Richmond,  Virginia; Eden, North Carolina; Greer, South Carolina;
Ocala, Florida; Atlanta and Albany, Georgia.

         Swift's  Midwest  terminals  are located in Gary and  Shoals,  Indiana;
Monroe and Columbus,  Ohio; Dallas,  Corsicana and Laredo, Texas; Oklahoma City,
Oklahoma; Memphis, Tennessee; Kansas City, Kansas; Plymouth,  Michigan; and Town
of Menasha, Wisconsin.

         The  terminals  are located in close  proximity to major  customers who
tender  significant  traffic  volume  to Swift.  To  minimize  competition  with
long-haul  truckload carriers and railroads,  Swift operates  principally within
short-to-medium-haul  traffic  lanes.  Although the  Company's  transcontinental
division  allows it to serve a broad  spectrum  of shipper  needs,  the  primary
regions in which Swift operates are ideally suited to short-to-medium-haul lanes
because of the distribution of population and economic centers.  During 1998 and
1997, Swift's average length of haul was 567 and 571 miles, respectively.

         Swift focuses the marketing of its services to large, service-sensitive
customers that regularly ship over  established  routes within Swift's  regional
service  areas.   Swift's  service  includes  the  availability  of  specialized
equipment  suitable  for the  requirements  of  certain  industries;  high cubic
capacity trailers;  computerized  tracking of and frequent reporting on customer
shipments; onboard communications that enable instant re-routing or modification
of  traffic;   well-maintained,   late-model  equipment  that  enhances  on-time
deliveries;  multiple drops, appointment pick-ups and deliveries;  assistance in
loading and unloading;  extra trailers that can be placed for the convenience of
customers;  and sufficient  equipment to respond promptly to customers'  varying
requirements.

         The achievement of significant  regular freight volumes on high-density
routes and consistent  shipment scheduling over these routes are key elements of
Swift's  operations.  As a result,  Swift's terminal managers are better able to
match available  equipment to available loads and schedule  regular  maintenance
and  fueling at Company  terminals,  thereby  improving  productivity  and asset
utilization and minimizing empty miles and expensive  over-the-road  fueling and
repair costs.  Consistent  scheduling also allows Swift to be more responsive to
its customers' needs.  Swift's regular scheduling and relatively short length of
haul enable drivers to return to their homes  regularly,  which has helped Swift
improve recruitment.

         In order to reduce the higher operating costs traditionally  associated
with  medium-length  hauls  and  specialized  equipment,   Swift  has  installed
sophisticated  computerized management control systems to monitor key aspects of
its operations.  Swift has a significant investment in its computer hardware and
utilizes state-of-the-art software specially designed for the trucking industry.
The  Company's  fully  integrated   computer  network  allows  its  managers  to
coordinate  available equipment with the transportation  needs of its customers,
monitor truck  productivity and fuel consumption and schedule regular  equipment
maintenance.  Dispatchers  monitor the location  and  delivery  schedules of all
shipments and equipment to coordinate routes and increase equipment utilization.
The Company's computer system provides  immediate access to current  information
regarding driver and equipment  status and location,  special load and equipment
instructions, routing and dispatching.

                                       5
<PAGE>
         Swift's  larger  terminals  are staffed with terminal  managers,  fleet
managers and customer service representatives.  Terminal managers work with both
the fleet  managers and the  customer  service  representatives,  as well as all
other  operations  personnel,  to  coordinate  the needs of both  customers  and
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.

ACQUISITIONS

         The growth of the Company has been, and will continue to be,  dependent
in part upon the acquisition of trucking companies throughout the United States.
In 1988, the Company acquired Cooper Motor Lines  ("Cooper"),  which established
the Company's  operations in the Eastern United States. In September 1991, Swift
further  expanded its eastern  operations  by acquiring  Arthur H. Fulton,  Inc.
("Fulton").  In  June  1993,  the  Company  strengthened  its  presence  in  the
Northwestern  United States with the acquisition of West's Best Freight Systems,
Inc. ("West's Best").

         During 1994, the Company  completed the  acquisitions of both East-West
Transportation,  Inc. ("East-West") and Missouri-Nebraska Express, Inc. ("MNX").
The  MNX  acquisition  established  a  significant  regional  operation  in  the
Midwestern  United  States.  In  September  1996,  the Company  acquired the dry
freight  van  division  of  Navajo  Shippers,  Inc.,  Digby  Leasing,  Inc.  and
Digby-Ringsby Truck Line, Inc. (collectively, "Navajo Shippers"). In April 1997,
the  Company  acquired  certain  assets  of  Direct  Transit,  Inc.  ("DTI"),  a
Debtor-In-Possession  in  United  States  Bankruptcy  Court.  DTI  was a dry van
carrier based in North Sioux City,  South Dakota and operated  predominantly  in
the eastern two-thirds of the United States.

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

REVENUE EQUIPMENT

         Swift  acquires  premium  tractors to help attract and retain  drivers,
promote safe operations and minimize  maintenance  and repair costs.  Management
believes the higher  initial  investment is recovered  through  improved  resale
value.
         The following table shows the type and age of Company-owned  and leased
equipment at December 31, 1998:

                                57', 53' AND    SETS OF    FLATBED   SPECIALIZED
   MODEL YEAR      TRACTORS (1)   48' VANS    DOUBLE VANS  TRAILERS   TRAILERS
   ----------      ------------   --------    -----------  --------   --------
1999 ..............    1,302        1,720                                  51
1998 ..............    1,481        3,187                       20          2
1997 ..............    1,518        3,385          164         308         97
1996 ..............      776        2,191                      202
1995 ..............      245          765                       94
1994 ..............      165        1,399                       40
1993 and prior.....       86        3,914          475         161        173
                      ------       ------       ------      ------     ------
     Total ........    5,573       16,561          639         825        323
                      ======       ======       ======      ======     ======
----------
(1)    Excludes 1,225 owner-operator tractors.

         When  purchasing new revenue  equipment,  Swift  acquires  standardized
tractors and trailers manufactured to the Company's specifications.  Since 1990,

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Swift has acquired  predominantly  tractors manufactured by Freightliner powered
by Series 60 Detroit Diesel engines.  Standardization  of drive-line  components
allows Swift to operate with a minimum spare parts  inventory,  enhances Swift's
maintenance  program  and  simplifies  driver  training.   Swift  adheres  to  a
comprehensive  maintenance  program  that  minimizes  downtime  and enhances the
resale value of its equipment.  In addition to its primary maintenance  facility
in Phoenix,  Arizona,  Swift performs  routine  servicing and maintenance of its
equipment at most of its regional  terminal  facilities,  thus  avoiding  costly
on-road  repairs  and  out-of-route   trips.  Swift  has  adopted  a  three-year
replacement program on the majority of its line-haul tractors.  This replacement
policy enhances Swift's ability to attract drivers, maximize its fuel economy by
capitalizing on improvement in both engine efficiency and vehicle  aerodynamics,
stabilize maintenance expense and maximize equipment utilization.

         Swift  has  installed  Qualcomm  onboard,   two-way  vehicle  satellite
communication  systems in the  majority  of its  tractors.  This  communications
system links drivers to regional terminals and corporate headquarters,  allowing
Swift to alter  rapidly its routes in response to customer  requirements  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. Swift believes
the  communications  system  improves  fleet  control,  the  quality of customer
service  and  driver  retention.  Swift  intends  to  continue  to  install  the
communication system in substantially all tractors acquired in the future.

         In 1998,  Swift  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 to reduce accidents,  enhance fuel mileage and minimize
maintenance expense.  Substantially all of Swift's Company tractors are equipped
with  electronically  controlled  engines that are set to limit the speed of the
vehicle.

MARKETING AND CUSTOMERS

         Swift has  targeted  the  service-sensitive  segment  of the  truckload
market,  both common and  contract,  rather than that segment that uses price as
its primary  consideration.  The Company has chosen to provide  premium  service
with commensurate rates rather than compete primarily on the basis of price. The
principal  elements of Swift's premium service  include:  regional  terminals to
facilitate  single and multiple  pick-ups and  deliveries  and to maintain local
contact with customers;  a fully-integrated  computer system to monitor shipment
location and variations  from  schedule;  an onboard  communication  system that
enables the Company to reroute traffic;  well-maintained,  late model equipment;
timely  deliveries;  extra  equipment for the  convenience  of customers,  which
enables Swift to respond promptly to customers' varying requirements; assistance
in  loading  and  unloading;  and  Company  control  of  revenue  equipment.  By
concentrating on expanding its services to its existing customers, the Company's
revenues from its top 25 customers of 1996 increased 50% from 1996 to 1998.

         Swift maintains a strong commitment to marketing.  Swift has assigned a
member of senior  management  to each of its largest  customers to ensure a high
level of customer  support.  Swift  solicits  new  customers  from its  Phoenix,
Arizona  headquarters  and each of its  regional  terminals  through a marketing
staff  of  approximately  30  persons.  Once a  customer  relationship  has been
established,  regional  customer  service  representatives  maintain contact and
solicit  additional  business.  Swift  concentrates  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,
Swift  attempts to obtain  additional  customers  that will  complement  the new
traffic flow. This strategy enables Swift to maximize equipment utilization.

         The largest 25, ten and five customers accounted for approximately 46%,
33% and 22%  respectively,  of Swift's  revenues  during 1998, 47%, 33% and 23%,
respectively,   of  Swift's   revenues   during  1997  and  44%,  33%  and  23%,
respectively,  of Swift's  revenues during 1996. No customer  accounted for more
than 7% of Swift's  gross  revenues  during any of the three most recent  fiscal
years.  Swift's largest customers  include retail and discount  department store

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chains,  manufacturers,  non-perishable  food  companies,  beverage and beverage
container producers and building materials companies.

DRIVERS AND EMPLOYEES

         All Swift  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 Swift's  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,
Swift has  ongoing  driver  efficiency  and safety  programs  to ensure that its
drivers comply with its safety procedures.

         Senior  management  is  actively  involved  with  the  development  and
retention  of  drivers.  Recognizing  the  need  for  qualified  drivers,  Swift
established its own driver-training school in Phoenix, Arizona in 1987, which is
certified by the Arizona Department of Transportation. Swift also has contracted
with driver-training  schools which are managed by outside organizations as well
as local community colleges  throughout the country.  Candidates for the schools
must be at least 23 years old (21 years old with military service),  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  driving  range time and a six to eight  week,  on-the-road
training program.

         Swift bases its drivers at the regional  terminals  and  monitors  each
driver's  location  on its  computer  system.  Swift  uses this  information  to
schedule the routing for its drivers so that they can return home frequently. In
order  to  attract  and  retain  highly  qualified   drivers  and  promote  safe
operations,  the  Company  purchases  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.  Company drivers are compensated on the basis of miles
driven,  loading/unloading and number of stops or deliveries, plus bonuses. Base
pay for miles driven  increases with a driver's  length of service.  The Company
maintains  a  bonus  system  for its  drivers  based  upon  safety  and  driving
performance.  Drivers employed by Swift participate in company-sponsored health,
life and dental  insurance  plans and are  eligible to  participate  in a 401(k)
Profit Sharing Plan and an Employee Stock Purchase Plan.

         Swift  believes  its  innovative   driver-training   programs,   driver
compensation,  regionalized operations, driver tracking and late-model equipment
provide important  incentives to attract and retain qualified drivers.  Although
Swift has 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 the Company in the future.

         As of December 31, 1998, Swift employed  approximately  9,600 full-time
persons,  of whom approximately  7,300 were drivers (including driver trainees),
900 were  mechanics and other  equipment  maintenance  personnel and the balance
were  support  personnel,  such  as  sales  personnel,  corporate  managers  and
administration.  None of Swift's  drivers or other employees is represented by a
collective  bargaining unit. In the opinion of management,  Swift's relationship
with its drivers and employees is good.

SAFETY

         The Company has an active safety and loss prevention program at each of
its  terminals.  Safety  supervisors  engage  in  ongoing  training  of  drivers
regarding  safe  vehicle  operations  and  loading  procedures.  The Company has
adopted maximum speed limits and rewards drivers with bonuses for complying with
the  Company's  safety  policies.  The Company  believes  that its insurance and
claims  expense as a percentage  of operating  revenue is one of the best in the
industry and  attributable  to its overall  strong safety  program.  In December
1997, the Company  received the highest safety rating given to motor carriers by
the United States Department of Transportation.

                                       8
<PAGE>
FUEL

         In order to reduce fuel costs, the Company purchases  approximately 71%
of its fuel in bulk at 23 of its 30 terminals.  Swift stores fuel in underground
storage tanks at two of its bulk fueling  terminals and in above ground  storage
tanks at its other bulk fueling  terminals.  The Company  believes that it is 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 the operations and  profitability of the
Company. From time to time, the Company, in response to increases in fuel costs,
has implemented fuel surcharges to pass on to its customers all or substantially
all of such costs. However,  there can be no assurance that such fuel surcharges
could be used to offset future  increases in fuel prices.  The Company  believes
that its 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.  The Company has not used derivative-type products as a
hedge  against  higher fuel costs in the past but  continues  to  evaluate  this
possibility.

COMPETITION

         The trucking  industry is extremely  competitive  and  fragmented.  The
Company  competes  primarily  with  regional,  medium-haul  truckload  carriers.
Management  believes,  because of its cost  efficiencies,  productive  equipment
utilization  and  financial  resources,  that  the  Company  has  a  competitive
advantage  over most  regional  truckload  carriers.  The Company  believes that
competition  for the freight  transported  by the Company is based,  in the long
term, as much upon service and  efficiency as on freight  rates.  There are some
trucking  companies with which the Company competes that have greater  financial
resources,  own more revenue equipment and carry a larger volume of freight than
the  Company.   Long-haul   truckload   carriers  and  railroads   also  provide
competition,  but to a lesser degree. The Company also competes with other motor
carriers for the services of drivers.

REGULATION

         Prior to December 29, 1995 the Company was regulated by the  Interstate
Commerce  Commission  ("ICC").  On December 29, 1995, the ICC ceased operations.
However,   substantially  all  of  the  jurisdiction  over  motor  carriers  was
transferred to the United States Department of  Transportation,  and most of the
regulatory requirements remain essentially unchanged.  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.  The Company
is also regulated by various state agencies.

         The Company's operations also are subject to various federal, state and
local environmental laws and regulations dealing with  transportation,  storage,
presence,  use,  disposal  and  handling of  hazardous  materials,  discharge of
stormwater and  underground  fuel storage tanks.  The Company  believes that its
operations are in substantial  compliance  with current laws and regulations and
does not  know of any  existing  condition  that  would  cause  compliance  with
applicable  environmental  regulations to have a material  adverse effect on the
Company's 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.
The  Company's  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.

                                       9
<PAGE>
ITEM 2. PROPERTIES

         The  following  table  provides  information  regarding  the  Company's
regional terminals and/or offices:

                             COMPANY                               OWNED
                             LOCATION                            OR LEASED
                             --------                            ---------
         Albany, Georgia....................................       Leased
         Atlanta, Georgia...................................       Leased
         Auburn, New York...................................       Owned
         Carlisle, Pennsylvania.............................       Leased
         Columbus, Ohio.....................................       Leased
         Corsicana, Texas...................................       Leased
         Denver, Colorado...................................       Leased
         Eden, North Carolina...............................       Owned
         Edwardsville, Kansas...............................       Owned
         Fontana, California................................       Owned
         Gary, Indiana......................................       Owned
         Greer, South Carolina..............................       Owned
         Irving, Texas......................................       Leased
         Laredo, Texas......................................       Leased
         Lewiston, Idaho....................................       Leased
         Memphis, Tennessee.................................       Owned
         Monroe, Ohio.......................................       Leased
         Ocala, Florida.....................................       Leased
         Oklahoma City, Oklahoma............................       Owned
         Phoenix, Arizona...................................       Owned
         Plymouth, Michigan.................................       Leased
         Pueblo, Colorado...................................       Owned
         Richmond, Virginia.................................       Owned
         Salt Lake City, Utah...............................       Owned
         Shoals, Indiana....................................       Owned
         Sparks, Nevada.....................................       Owned
         Stockton, California...............................       Leased
         Troutdale, Oregon..................................       Owned
         Town of Menasha, Wisconsin.........................       Owned
         Willows, California................................       Owned
         Wilmington, California.............................       Leased

         Swift's  headquarters is located on approximately 153 acres in Phoenix,
Arizona and contains 83,000 square feet of office space,  106,000 square feet of
shop and  maintenance  facilities,  27,000 square feet of a drivers'  center,  a
recruiting and training center, a warehouse  facility,  a two-bay truck wash and
an eight lane fueling center. The Company's prior headquarters is held for sale.
As of December 31, 1998,  the  Company's  aggregate  monthly rent for all leased
properties was $94,000.

                                       10
<PAGE>
ITEM 3. LEGAL PROCEEDINGS

         The  Company  is a  party  to  routine  litigation  incidental  to  its
business,  primarily  involving  claims for personal  injury or property  damage
incurred in the transportation of freight.  The Company's  insurance program for
liability,  workers'  compensation,  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.  The Company is not aware of any claims or  threatened
claims that might have a material  adverse  effect upon the Company's  financial
condition.

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

         No matters were submitted to a vote of the Company's  security  holders
during the fourth quarter of 1998.

                                     PART II

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

         The Company's  common stock is publicly  traded on the Nasdaq  National
Market  ("Nasdaq")  under the symbol "SWFT".  The following table sets forth the
high and low closing sales prices of the common stock reported by Nasdaq for the
periods shown.

                                                      COMMON STOCK
                                                   -----------------
                                                    HIGH        LOW
                                                    ----        ---
        1998
              First Quarter....................    $17.83     $12.72
              Second Quarter...................     17.17      12.00
              Third Quarter....................     15.33      10.59
              Fourth Quarter...................     19.50      11.29

        1997
              First Quarter....................    $12.45     $10.78
              Second Quarter...................     14.55      11.50
              Third Quarter....................     14.22      12.22
              Fourth Quarter...................     14.78      12.22

         On March 16,  1999,  the last  reported  sales  price of the  Company's
common  stock was  $19.42 per share.  At that  date,  the number of  stockholder
accounts  of  record  of the  Company's  common  stock was  2,100.  The  Company
estimates  there are  approximately  4,800  beneficial  holders of the Company's
common stock.

         The Company has not paid cash  dividends  on its common stock in either
of the two  preceding  fiscal  years  and  one of the  Company's  notes  payable
includes  limitations  on the  payment  of  cash  dividends.  It is the  current
intention  of  management  to  retain  earnings  to  finance  the  growth of the
Company's  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.

         On March 15, 1999, the Company's Board of Directors  approved a 3-for-2
stock split  effected in the form of a stock  dividend  and payable on April 10,
1999 to the  stockholders  of record at the close of business on March 31, 1999.
All share amounts,  share prices and earnings per share in this Annual Report on
Form 10-K have been retroactively adjusted to reflect this 3-for-2 stock split.

                                       11
<PAGE>
FACTORS THAT MAY AFFECT FUTURE STOCK PERFORMANCE

         The performance of the Company's 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  44% of the
Company's common stock. Accordingly, Mr. Moyes will have a significant influence
upon the activities of the Company, as well as on all matters requiring approval
of the  stockholders,  including  electing  members  of the  Company's  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 preferred stock of the Company 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 the Company's
common stock could be subject to significant fluctuations in response to certain
factors, such as, among others,  variations in the anticipated or actual results
of operations of the Company or other companies in the transportation  industry,
changes in conditions  affecting  the economy  generally,  analysts'  reports or
general  trends  in the  industry,  as well as other  factors  unrelated  to the
Company's operating results.

                                       12
<PAGE>
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, 1998 is
derived from the Company's Consolidated  Financial Statements.  The Consolidated
Financial Statements as of December 31, 1998 and 1997, and for each of the years
in the three-year  period ended December 31, 1998 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.
<TABLE>
<CAPTION>
                                                        YEARS ENDED DECEMBER 31,
                                         --------------------------------------------------
                                         1998     1997(1)     1996(2)     1995      1994(3)
                                         ----     -------     -------     ----      -------
                                                     (DOLLAR AMOUNTS IN THOUSANDS,
                                                EXCEPT PER SHARE AND PER MILE AMOUNTS)
<S>                                    <C>        <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENTS OF
EARNINGS DATA:
Operating revenue .................... $873,433   $713,638   $562,259   $458,165   $365,889
Earnings before income taxes ......... $ 93,306   $ 69,994   $ 47,212   $ 40,070   $ 39,309
Net earnings ......................... $ 55,511   $ 41,644   $ 27,422   $ 23,040   $ 22,629
Diluted earnings per share(5)......... $    .85   $    .64   $    .47   $    .41   $    .40
CONSOLIDATED BALANCE SHEET DATA
(AT END OF YEAR):
Working capital ...................... $ 81,048   $ 64,168   $ 36,938   $  6,735   $ 14,012
Total assets ......................... $636,283   $471,134   $380,605   $311,308   $275,991
Long-term obligations, less
 current portion ..................... $143,208   $ 73,420   $ 40,284   $ 68,954   $ 77,715
Stockholders' equity ................. $327,353   $274,175   $226,666   $134,835   $111,342
OPERATING STATISTICS (AT END OF YEAR):
Operating ratio ......................     88.7%      89.6%      90.5%      89.9%      88.8%
Pre-tax margin (4) ...................     10.7%       9.8%       8.4%       8.7%      10.7%
Average line haul revenue per mile ... $   1.14   $   1.13   $   1.11   $   1.11   $   1.12
Empty mile percentage ................     13.5%      13.7%      14.0%      13.9%      13.2%
Average length of haul (in miles) ....      567        571        576        591        590
Total tractors at end of period:
  Company-operated....................    5,573      4,968      4,166      3,472      3,286
  Owner-operator......................    1,225        910        665        477        188
Trailers at end of period ............   18,348     15,499     12,151      8,788      8,957
</TABLE>
----------
(1) Includes the results of operations from the acquisition of certain assets of
    DTI beginning April 8, 1997.
(2) Includes the results of  operations  from the asset  acquisition  of the dry
    freight van  division of Navajo  Shippers,  Inc.,  Digby  Leasing,  Inc. and
    Digby-Ringsby Truck Line, Inc. beginning on September 12, 1996.
(3) Includes the results of operations from the asset  acquisitions of East-West
    Transportation,  Inc.  beginning  on  July  1,  1994  and  Missouri-Nebraska
    Express, Inc. beginning October 2, 1994.
(4) 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),   the  Company   believes  that  the  most  meaningful
    comparative measure of its operating efficiency is its pre-tax margin, which
    takes into consideration both the Company's total operating expenses and net
    interest expense as a percentage of operating revenue.
(5) As adjusted to reflect  the  3-for-2  stock split  effected in the form of a
    stock dividend and payable on April 10, 1999 to the  stockholders  of record
    at the close of business on March 31, 1999. All share amounts,  share prices
    and  earnings  per  share in this  Annual  Report  on Form  10-K  have  been
    retroactively adjusted to reflect this 3-for-2 stock split.

                                       13
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

OVERVIEW

         Swift's fleet has been  predominantly  comprised of  Company-owned  and
leased  tractors.  The  Company's  decisions  whether  to buy or  lease  new and
replacement  revenue  equipment is based upon the overall economic impact of the
alternative financing methods,  including market prices available and income tax
considerations.  Depending on whether revenue  equipment is purchased or leased,
several  categories of the Company's  operating  expenses have varied,  and will
continue to vary,  as a percentage  of the  Company's  revenues.  Because of the
impact  that  equipment  financing  methods  can  have  on the  operating  ratio
(operating expenses as a percentage of operating revenue),  the Company believes
that the most meaningful  comparative measure of its operating efficiency is its
pre-tax  margin  (earnings  before  income  taxes as a  percentage  of operating
revenue),  which takes into  consideration  both the Company's  total  operating
expenses  and  net  interest  expense  as a  percentage  of  operating  revenue.
Accordingly,  in the discussion and analysis  below,  the Company has focused on
the factors  contributing to operating  revenue increases and to the increase or
decrease  in  its  pre-tax   margin  during  the  periods   presented.   In  the
"forward-looking statements" that may be included herein, important factors such
as the financial  position of the Company,  its customers needs, the cost of new
equipment and new  construction,  the availability of buyers in the marketplace,
fuel costs and other factors may cause actual results to vary.

         Although  the trend of shippers in the  truckload  segment of the motor
carrier industry over the past several years has been towards consolidation, the
truckload industry remains highly fragmented.  Management  believes the industry
trend towards  financially  stable "core  carriers"  will continue and result in
continued  industry  consolidation.  In  response  to this  trend,  the  Company
continues  to expand its fleet with  5,573  tractors  as of  December  31,  1998
compared to 3,472  tractors  as of  December  31,  1995.  This fleet  growth was
accomplished  through a  combination  of internal  growth and through  strategic
acquisitions.  See "Business -- General." During this same period, the Company's
owner  operator  fleet has expanded to 1,225 as of December 31, 1998 from 477 as
of December 31, 1995.

YEAR 2000 ISSUE

         The Company has  completed  its  comprehensive  review of its Year 2000
issues and internal  systems  (information  technology  ("IT") and non-IT).  The
majority of the Company's  application  software programs are purchased from and
maintained  by vendors.  Therefore,  the Company is working with these  software
vendors to verify these  applications  become Year 2000  compliant.  The Company
estimates the status of progress of these internal systems as follows:

                              VENDOR MODIFICATIONS
                                 BEING PERFORMED       TESTING COMMENCED
                                 ---------------       -----------------
IT Systems                             98%                    90%

Non-IT Systems                         90%                    30%

         The Company presently  believes that with  modifications and updates to
existing  software,  the cost of which is not expected to be material,  the Year
2000 problem will not pose  significant  operational  problems for the Company's
internal  systems.  The Company's  contingency  plan in the event of a Year 2000
problem is to perform tasks through telephonic communication,  which the Company
believes will allow it to operate in the short term assuming power and telephone
services are functioning.

                                       14
<PAGE>
         As part of the  Company's  comprehensive  review,  it is  continuing to
verify the Year 2000  readiness of third parties  (vendors and  customers)  with
whom the Company has material  relationships.  At present,  the Company believes
its material vendors and customers will be Year 2000 compliant and the effect on
the Company's results of operations, liquidity, and financial condition will not
be material.  The Company will  continue to monitor the progress of its material
vendors and customers  and  formulate a  contingency  plan at that point in time
when the  Company  does not  believe  a  material  vendor  or  customer  will be
compliant.

RESULTS OF OPERATIONS

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

                                                                DECEMBER 31,
                                                         ----------------------
                                                          1998     1997    1996
                                                         -----    -----   -----

      Operating revenue ..............................   100.0%   100.0%  100.0%
      Operating expenses:
        Salaries, wages and employee benefits ........    36.5     34.5    34.2
        Operating supplies and expenses ..............     9.1      8.9     9.3
        Fuel .........................................    10.7     12.8    13.8
        Purchased transportation .....................    15.5     13.5    12.8
        Rental expense ...............................     4.7      6.5     5.8
        Insurance and claims .........................     2.8      3.2     3.6
        Depreciation and amortization ................     5.3      5.3     6.0
        Communications and utilities .................     1.3      1.5     1.5
        Operating taxes and licenses .................     2.8      3.4     3.5
                                                         -----    -----   -----
        Total operating expenses .....................    88.7     89.6    90.5
                                                         -----    -----   -----
      Operating income ...............................    11.3     10.4     9.5
      Net interest expense ...........................      .7       .7     1.2
      Other (income) expense, net ....................    (0.1)    (0.1)   (0.1)
                                                         -----    -----   -----
      Earnings before income taxes ...................    10.7      9.8     8.4
      Income taxes ...................................     4.3      4.0     3.5
                                                         -----    -----   -----
      Net earnings ...................................     6.4%     5.8%    4.9%
                                                         =====    =====   =====

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

         Operating revenue increased $159.8 million, or 22.4%, to $873.4 million
for the year ended  December 31, 1998 from $713.6 million for the previous year.
The  increase in  operating  revenue is due  primarily  to the  expansion of the
Company's  total  fleet to 6,798  tractors  at  December  31, 1998 from 5,878 at
December 31, 1997, an increase of 920 tractors.

         The  Company's  operating  ratio  was 88.7% and 89.6% in 1998 and 1997,
respectively.  The  Company's  operating  revenue and  operating  ratio for 1998
improved  as a result of strong  shipper  demand  which  caused an  increase  in
operating  revenue and the favorable impact in components of operating  expenses
explained  below.  The  Company's  empty mile factor was 13.5% and 13.7% and the
average rate per mile was $1.143 and $1.118  (excluding  fuel surcharge) for the
years ended December 31, 1998 and 1997, respectively.

         Salaries,  wages and employee  benefits  represented 36.5% of operating
revenue for the year ended  December 31, 1998 compared with 34.5% for 1997.  The
increase is due primarily to an increase in the accrual for the Company's 401(k)
profit sharing  contribution and normal wage increases with associated  benefits
and taxes.

                                       15
<PAGE>
         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,  the
Company's results of operations would be negatively  impacted to the extent that
corresponding rate increases were not obtained.

         Fuel expenses  represented 10.7% and 12.8% of operating revenue in 1998
and 1997,  respectively.  The decrease in fuel as a percentage of revenue is due
primarily to decreased fuel prices and an increase in the owner operator  fleet.
Actual fuel cost per gallon  decreased by  approximately  16 cents per gallon in
1998 versus 1997.

         Increases  in fuel  costs  (including  fuel  taxes),  to the extent not
offset by rate increases or fuel surcharges, could have an adverse effect on the
operations and profitability of the Company.  Management  believes 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.  The Company currently does not use derivative-type  hedging products
but is currently evaluating the possible use of these products.

         Purchased  transportation  represented  15.5%  and  13.5% of  operating
revenue  for the years ended  December  31,  1998 and 1997,  respectively.  This
increase is primarily the result of the growth of the Company's  owner  operator
fleet from 910 at December 31, 1997 to 1,225 at December 31, 1998.

         Rental  expense as a percentage of operating  revenue was 4.7% and 6.5%
for the years ended  December 31, 1998 and 1997,  respectively.  During 1998 and
1997, leased tractors represented approximately 54% and 61%, respectively of the
fleet  (exclusive  of owner  operators).  In  addition to the  reduction  in the
percentage of tractors which were leased, rental expense was positively impacted
by a reduction in the number of leased trailers as well as a slight reduction in
the average lease rate for tractors in 1998 versus 1997. When it is economically
feasible to do so, the Company  will  purchase  then sell  tractors it leases by
exercising the purchase option contained in the lease. Gains on these activities
are  recorded as a reduction  of rent  expense.  During the year ended  December
31,1998 and 1997, respectively, the Company recorded gains of approximately $3.8
million and $770,000 from the sale of leased tractors.

         Depreciation and amortization expense was 5.3% of operating revenue for
the years ended  December 31, 1998 and 1997.  During the year ended December 31,
1998  the  Company   recorded  gains  on  the  sale  of  revenue   equipment  of
approximately  $6.1 million  compared with  approximately  $3.6 million in 1997.
Exclusive of gains,  which reduced  depreciation and amortization  expense,  the
percentage of depreciation  and  amortization  to operating  revenue in 1998 and
1997 was 6.0% and 5.8%, respectively.

         Insurance  and claims  expense  represented  2.8% and 3.2% of operating
revenue  in the  years  ended  December  31,1998  and  1997,  respectively.  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.  The Company  accrues the  estimated  cost of the uninsured
portion of pending  claims.  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  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.

         Interest expense increased to $6.3 million in 1998 from $4.6 million in
1997. This increase was due to increased  borrowings under the Company's line of
credit.

                                       16
<PAGE>
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

         Operating revenue increased $151.3 million, or 26.9%, to $713.6 million
for the year ended  December 31, 1997 from $562.3 million for the previous year.
The  increase in  operating  revenue is due  primarily  to the  expansion of the
Company's  total  fleet to 5,878  tractors  at  December  31, 1997 from 4,831 at
December 31, 1996, an increase of 1,047  tractors.  The  acquisition of tractors
from certain  lessors of DTI in April 1997 accounted for 565 of this increase in
tractors. The Company's freight rates increased by approximately 1% in 1997.

         The  Company's  operating  ratio  was 89.6% and 90.5% in 1997 and 1996,
respectively.  The  Company's  operating  revenue and  operating  ratio for 1997
improved  as a result of strong  shipper  demand  which  caused an  increase  in
operating  revenue and the favorable impact in components of operating  expenses
explained  below.  The  Company's  empty mile factor was 13.7% and 14.0% and the
average rate per mile was $1.118 and $1.103  (excluding  fuel surcharge) for the
years ended December 31, 1997 and 1996, respectively.

         Salaries,  wages and employee  benefits  represented 34.5% of operating
revenue for the year ended  December 31, 1997 compared with 34.2% for 1996.  The
increase is due primarily to driver pay including  retention  bonuses  offset in
part by expansion of the Company's  owner operator fleet.  Effective  January 1,
1997,  the Company  began paying its drivers a bonus of two cents per mile.  For
the first three quarters this bonus was payable  quarterly,  provided the driver
was still employed at the end of the quarter.

         Fuel expenses  represented 12.8% and 13.8% of operating revenue in 1997
and 1996,  respectively.  The decrease in fuel as a percentage of revenue is due
primarily to decreased fuel prices and an increase in the owner operator fleet.

         Purchased  transportation  represented  13.5%  and  12.8% of  operating
revenue  for the years ended  December  31,  1997 and 1996,  respectively.  This
increase is the result of the growth of the Company's  owner operator fleet from
665 at December 31, 1996 to 910 at December 31, 1997.

         Rental  expense as a percentage of operating  revenue was 6.5% and 5.8%
for the years ended December 31, 1997 and 1996,  respectively.  This increase is
partially due to an increase in trailers  under lease.  When it is  economically
feasible to do so, the Company  will  purchase  then sell  tractors it leases by
exercising the purchase option contained in the lease. Gains on these activities
are  recorded as a reduction  of rent  expense.  During the year ended  December
31,1997 and 1996,  respectively,  the Company  recorded  gains of  approximately
$770,000  and $3.3  million  from the sale of leased  tractors.  During 1997 and
1996, leased tractors represented approximately 61% and 55%, respectively of the
fleet (exclusive of owner operators).

         Depreciation and amortization expense was 5.3% of operating revenue for
the year  ended  December  31,  1997  versus  6.0% for 1996.  This  decrease  is
primarily due to expansion of the owner  operator  fleet.  During the year ended
December 31, 1997 the Company recorded gains on the sale of revenue equipment of
approximately  $3.6 million  compared with  approximately  $2.2 million in 1996.
Exclusive of gains,  which reduced  depreciation and amortization  expense,  the
percentage of depreciation  and  amortization  to operating  revenue in 1997 and
1996 was 5.8% and 6.4%, respectively.

         Insurance  and claims  expense  represented  3.2% and 3.6% of operating
revenue  in the year  ended  December  31,  1997  and  1996,  respectively.  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.  The Company  accrues the  estimated  cost of the uninsured
portion of pending  claims.  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  historical  claims  development  trends.
Insurance and claims expense will vary as a percentage of operating revenue from

                                       17
<PAGE>
period to period based on the  frequency  and  severity of claims  incurred in a
given period as well as changes in claims development trends.

         Interest expense decreased to $4.6 million in 1997 from $7.1 million in
1996. This decline is due to a lower  effective  borrowing rate and a lower debt
level  throughout most of the year which resulted from utilizing the proceeds of
the December 1996 common stock offering to reduce outstanding debt.

LIQUIDITY AND CAPITAL RESOURCES

         The continued  growth in the Company's  business  requires  significant
investment  in new revenue  equipment,  upgraded  and expanded  facilities,  and
enhanced computer hardware and software. The funding for this expansion has been
from cash  provided by operating  activities,  proceeds from the sale of revenue
equipment, long-term debt, borrowings on the Company's revolving line of credit,
the use of operating leases to finance the acquisition of revenue  equipment and
from public offerings of common stock.

         Net cash provided by operating  activities  was $114.9  million for the
year ended December 31, 1998 compared to $75.9 million for 1997. The increase is
primarily  attributable  to an  increase  in net  earnings  and an  increase  in
accounts payable,  accrued liabilities and claims accruals offset by an increase
in accounts receivable.

         Prepaid  expenses  increased by $10.1 million from December 31, 1997 to
December 31, 1998.  The increase is primarily due to the payment of 1999 license
fees in December 1998.

         Net cash used in investing  activities  increased to $171.4 million for
the year ended  December 31, 1998 from $104.0  million for 1997. The increase is
due  primarily  to an  increase  in  capital  expenditures  offset by  increased
proceeds from the sale of property and  equipment.  Cash expended for investment
activities  also  includes  $3.7  million  expended  for the purchase of certain
assets of DTI in 1997.

         As of December 31, 1998,  the Company had  commitments  outstanding  to
acquire  replacement and additional  revenue  equipment for  approximately  $247
million.  The  Company has the option to cancel  such  commitments  upon 60 days
notice.  The  Company  believes  it has the  ability  to  obtain  debt and lease
financing  and  generate  sufficient  cash flows from  operating  activities  to
support these acquisitions of revenue equipment.

         During  the  year  ended  December  31,  1998,  the  Company   incurred
approximately $29 million of non-revenue equipment capital  expenditures.  These
expenditures were primarily for facilities and equipment.

         The Company  anticipates that it will expend  approximately $51 million
in 1999 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.

         The  funding  for  capital  expenditures  has  been  and will be from a
combination of cash provided by operating  activities,  amounts  available under
the Company's  $170 million line of credit,  lease and debt financing and equity
offerings.  The availability of capital for revenue  equipment and other capital
expenditures  will be affected by prevailing market conditions and the Company's
financial condition and results of operations.

         Net cash  provided by financing  activities  was $57.3  million in 1998
compared to $32.6  million in 1997.  The increase in cash  provided by financing
activities  is  primarily  due to an  increase in  borrowings  under the line of
credit offset by treasury stock purchases.

         Management  believes  that it will be able to  finance  its  needs  for
working capital,  facilities  improvements and expansion, as well as anticipated
fleet growth through a combination of revenue equipment  purchases and strategic
acquisitions,   as  opportunities   become  available,   with  cash  flows  from
operations,  borrowings  available  under the line of credit and with  long-term

                                       18
<PAGE>
debt and operating lease  financing  believed to be available to finance revenue
equipment  purchases.  Over the long term,  the  Company  will  continue to have
significant  capital  requirements,  which  may  require  the  Company  to  seek
additional  borrowings or equity capital.  The availability of debt financing or
equity capital will depend upon the Company's financial condition and results of
operations  as well as  prevailing  market  conditions,  the market price of the
Company's common stock and other factors over which the Company has little or no
control.

INFLATION

         Inflation can be expected to have an impact on the Company's  operating
costs. A prolonged  period of inflation would cause interest rates,  fuel, wages
and other costs to increase and would adversely affect the Company's  results of
operations unless freight rates could be increased correspondingly. However, the
effect of inflation has been minimal over the past three years.

SEASONALITY

         In the transportation industry,  results of operations generally show a
seasonal  pattern as customers reduce shipments after the winter holiday season.
The  Company's  operating  expenses  also tend to be higher in the winter months
primarily  due to increased  operating  costs in colder  weather and higher fuel
consumption due to increased idle time.

FACTORS THAT MAY AFFECT FUTURE RESULTS AND FINANCIAL CONDITION

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

         GENERAL  ECONOMIC  AND  BUSINESS  FACTORS.  The  Company's  business is
dependent  upon a number of factors that may have a material  adverse  effect on
its results of operations, many of which are beyond the Company's control. These
factors include excess capacity in the trucking industry,  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,  and difficulty in attracting
and retaining  qualified  drivers and owner operators.  The Company's results of
operations  also are affected by  recessionary  economic cycles and downturns in
customers' business cycles, particularly in market segments and industries (such
as retail  and paper  products)  in which the  Company  has a  concentration  of
customers.  In addition,  the Company's  results of  operations  are affected by
seasonal  factors.  Customers tend to reduce  shipments after the winter holiday
season  and the  Company's  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.  The Company competes with many other truckload  carriers of varying
sizes and, to a lesser extent, with railroads.  Competition has created downward
pressure on the truckload industry's pricing structure.  There are some trucking
companies with which the Company competes that have greater financial  resources
than the  Company,  own more  revenue  equipment  and  carry a larger  volume of
freight than the Company.

         CAPITAL REQUIREMENTS.  The trucking industry is very capital intensive.
The Company depends on cash from operations, operating leases and debt financing
for funds to expand the size of its fleet and maintain modern revenue equipment.
If the  Company  were  unable in the future to enter into  acceptable  financing
arrangements, it would have to limit its growth and might be required to operate
its revenue  equipment for longer periods,  which could have a material  adverse
effect on the Company's operating results.

                                       19
<PAGE>

         ACQUISITIONS.  The growth of the Company has been, and will continue to
be, dependent in part upon the acquisition of trucking companies  throughout the
United States. To date, the Company has been successful in identifying  trucking
companies to acquire and in  integrating  such  companies'  operations  into the
Company's  operations.  The Company  may face  competition  from  transportation
companies  or other third  parties  for  acquisition  opportunities  that become
available.  There can be no assurance that the Company will identify acquisition
candidates that will result in successful combinations in the future. Any future
acquisitions  by the Company may result in the incurrence of additional debt and
amortization of expenses related to goodwill and intangible assets,  which could
adversely affect the Company's  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 the
Company's  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 the Company's business and operating results.

         DEPENDENCE ON KEY PERSONNEL.  The Company is highly  dependent upon the
services  of Mr.  Jerry  Moyes,  Chairman  of the  Board,  President  and  Chief
Executive Officer, Mr. William F. Riley, III, Executive Vice President and Chief
Financial Officer, Mr. Rodney K. Sartor,  Executive Vice President,  Mr. Patrick
J. Farley,  Executive Vice  President,  and Mr. Kevin H. Jensen,  Executive Vice
President.  Although  the Company  believes it has an  experienced  and talented
management  group, the loss of the services of Mr. Moyes, Mr. Riley, Mr. Sartor,
Mr. Farley or Mr. Jensen could have a material  adverse  effect on the Company's
operations  and  future  profitability.  The  Company  does not have  employment
agreements  with nor does it maintain key man life  insurance on Messrs.  Moyes,
Riley, Sartor, Farley or Jensen.

         REGULATION. The Company is 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.  In  addition,  the  Company's  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 the Company should be involved
in a spill or other accident  involving  hazardous  substances or if the Company
were found to be in violation of applicable laws or regulations, it could have a
material adverse effect on the Company's business and operating results.

         CLAIMS  EXPOSURE;  INSURANCE.  The Company  currently  self-insures for
liability resulting from cargo loss, personal injury and property damage and for
workers' compensation, and maintains insurance with licensed insurance companies
above its limits on self-insurance. To the extent the Company were to experience
an increase in the number of claims for which it is self-insured,  the Company's
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 the Company's profitability.

         DEPENDENCE ON KEY  CUSTOMERS.  A  significant  portion of the Company's
revenue is generated from key  customers.  During 1998, the Company's top 25, 10
and 5 customers  accounted for 46%, 33% and 22% of revenues,  respectively.  The
Company does not have long-term  contractual  relationships with many of its key
customers,  and there can be no assurance that the Company's  relationships with
its key  customers  will  continue as  presently  in effect.  A reduction  in or
termination  of the Company's  services by a key customer  could have a material
adverse effect on the Company's business and operating results.

                                       20
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company has interest rate exposure  arising from the Company's line
of credit which has a variable  interest  rate.  This variable  interest rate is
impacted by changes in short-term  interest rates.  The Company manages interest
rate exposure  through its  conservative  debt ratio target and its mix of fixed
and variable rate debt and lease financing. At December 31, 1998, the fair value
of the Company's long-term debt approximated carrying value.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         Consolidated  Financial  Statements  of the Company as of December  31,
1998 and for each of the years in the three-year period ended December 31, 1998,
together  with related notes and the report of KPMG LLP,  independent  auditors,
are set forth on the following pages. Other required  financial  information set
forth herein is more fully described in Item 14 of this Form 10-K.

                                       21
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


THE BOARD OF DIRECTORS AND STOCKHOLDERS
SWIFT TRANSPORTATION CO., INC.:


         We have audited the accompanying  consolidated  balance sheets of Swift
Transportation  Co., Inc. and subsidiaries as of December 31, 1998 and 1997, and
the related consolidated statements of earnings,  stockholders' equity, and cash
flows for each of the years in the  three-year  period ended  December 31, 1998.
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 generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, the 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, 1998 and 1997, and
the  results of their  operations  and their cash flows for each of the years in
the  three-year  period ended  December 31, 1998 in  conformity  with  generally
accepted accounting principles.



                                            KPMG LLP

Phoenix, Arizona
February 12, 1999, except as to Note 18
which is as of March 15, 1999

                                       22
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)


                                                                DECEMBER 31,
                                                           ---------------------
                         ASSETS                              1998         1997
                                                             ----         ----
Current assets:
 Cash ...............................................      $  6,530     $  5,726
 Accounts receivable, net ...........................       118,555       92,587
 Equipment sales receivables ........................         5,262        3,284
 Inventories and supplies ...........................         4,866        4,509
 Prepaid taxes, licenses and insurance ..............        15,228        5,090
 Assets held for sale ...............................         5,468        5,468
 Deferred income taxes ..............................         4,010        5,280
                                                           --------     --------
    Total current assets ............................       159,919      121,944
                                                           --------     --------
Property and equipment, at cost:
 Revenue and service equipment ......................       487,928      366,223
 Land ...............................................         8,409        7,520
 Facilities and improvements ........................        85,919       62,760
 Furniture and office equipment .....................        15,566       13,949
                                                           --------     --------
    Total property and equipment ....................       597,822      450,452
Less accumulated depreciation and amortization .......      131,045      111,917
                                                           --------     --------
    Net property and equipment .......................      466,777      338,535
Other assets .........................................        1,770        1,976
Goodwill .............................................        7,817        8,679
                                                           --------     --------
                                                           $636,283     $471,134
                                                           ========     ========

See accompanying notes to consolidated financial statements.

                                       23
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)


                                                                DECEMBER 31,
                                                           ---------------------
           LIABILITIES AND STOCKHOLDERS' EQUITY              1998         1997
                                                             ----         ----
Current liabilities:
 Accounts payable ....................................     $ 27,100     $ 14,469
 Accrued liabilities .................................       27,273       20,177
 Current portion of claims accruals ..................       23,788       16,281
 Current portion of long-term debt ...................          710        6,849
                                                           --------     --------
      Total current liabilities ......................       78,871       57,776
                                                           --------     --------
Borrowings under revolving line of credit ............      128,000       56,500
Long-term debt, less current portion .................       15,208       16,920
Claims accruals, less current portion ................       28,091       21,343
Deferred income taxes ................................       58,760       44,420

Stockholders' equity:
 Preferred stock, par value $.001 per share
   Authorized 1,000,000 shares; none issued
 Common stock, par value $.001 per share
 Authorized 75,000,000 shares; issued
 65,044,275 and 64,190,335 shares in 1998
 and 1997, respectively ..............................           65           64
 Additional paid-in capital ..........................      123,386      116,120
 Retained earnings ...................................      216,918      161,407
                                                           --------     --------
                                                            340,369      277,591
 Less treasury stock, at cost (1,323,075 and
   496,575 shares at December 31, 1998 and
   1997, respectively) ...............................       13,016        3,416
                                                           --------     --------
      Total stockholders' equity .....................      327,353      274,175
                                                           --------     --------
Commitments, contingencies and subsequent events      
                                                           $636,283     $471,134
                                                           ========     ========

See accompanying notes to consolidated financial statements.

                                       24
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF EARNINGS
                        (IN THOUSANDS, EXCEPT SHARE DATA)


                                                  YEARS ENDED DECEMBER 31,
                                               ---------------------------------
                                                 1998        1997        1996
                                                 ----        ----        ----

Operating revenue ..........................   $873,433    $713,638    $562,259
                                               --------    --------    --------
Operating expenses:
 Salaries, wages and employee benefits......    318,992     246,231     192,572
 Operating supplies and expenses ...........     79,556      63,622      52,362
 Fuel ......................................     93,023      91,257      77,063
 Purchased transportation ..................    135,453      96,107      72,040
 Rental expense ............................     41,447      46,545      32,599
 Insurance and claims ......................     24,094      23,161      20,358
 Depreciation and amortization .............     46,033      37,849      33,883
 Communications and utilities ..............     11,433      10,695       8,219
 Operating taxes and licenses ..............     24,710      24,132      19,584
                                               --------    --------    --------
     Total operating expenses ..............    774,741     639,599     508,680
                                               --------    --------    --------
     Operating income ......................     98,692      74,039      53,579
                                               --------    --------    --------
Other (income) expenses:
 Interest expense ..........................      6,277       4,647       7,106
 Interest income ...........................       (269)       (183)       (107)
 Other .....................................       (622)       (419)       (632)
                                               --------    --------    --------
     Other (income) expenses, net ..........      5,386       4,045       6,367
                                               --------    --------    --------
     Earnings before income taxes ..........     93,306      69,994      47,212
 Income taxes ..............................     37,795      28,350      19,790
                                               --------    --------    --------
     Net earnings ..........................   $ 55,511    $ 41,644    $ 27,422
                                               ========    ========    ========
Basic earnings per share ...................   $    .87    $    .66    $    .49
                                               ========    ========    ========
Diluted earnings per share .................   $    .85    $    .64    $    .47
                                               ========    ========    ========

See accompanying notes to consolidated financial statements.

                                       25
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                        (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                               COMMON STOCK     ADDITIONAL                          TOTAL
                                            ------------------   PAID-IN   RETAINED    TREASURY  STOCKHOLDERS'
                                            SHARES   PAR VALUE   CAPITAL   EARNINGS     STOCK      EQUITY
                                            ------   ---------   -------   --------     -----      ------
<S>                                      <C>          <C>      <C>        <C>        <C>         <C>
Balance, January 1, 1996 ...............  55,974,451   $ 56     $ 45,854   $ 92,341   $ (3,416)   $134,835
Issuance of common stock under
 stock option and employee stock
 purchase plans ........................     657,338               1,676                             1,676
Issuance of common stock upon
 public offering, net of issuance
 costs of $300 .........................   6,468,750      7       59,407                            59,414
Issuance of common stock for
 Navajo Shippers acquisition ...........     202,500               1,918                             1,918
Income tax benefit arising from
 the exercise of stock options .........                           1,330                             1,330
Amortization of deferred
 compensation  .........................                              71                                71
Net earnings ...........................                                     27,422                 27,422
                                          ----------   ----     --------   --------   --------    --------
Balance, December 31, 1996 .............  63,303,039     63      110,256    119,763     (3,416)    226,666
Issuance of common stock under
 stock option and employee stock
 purchase plans ........................     887,296      1        2,963                             2,964
Income tax benefit arising from the
  exercise of stock options ............                           2,765                             2,765
Amortization of deferred
 compensation  .........................                             136                               136
Net earnings ...........................                                     41,644                 41,644
                                          ----------   ----     --------   --------   --------    --------
Balance, December 31, 1997 .............  64,190,335     64      116,120    161,407     (3,416)    274,175

Issuance of common stock under
 stock option and employee stock
 purchase plans ........................     853,940      1        3,726                             3,727
Income tax benefit arising from
 the exercise of stock options .........                           3,349                             3,349
Amortization of deferred
 compensation  .........................                             212                               212
Payment of stock split fractional
 share ................................                              (21)                              (21)
Purchase of 826,500 shares of
 treasury stock ........................                                                (9,600)     (9,600)
Net earnings ...........................                                     55,511                 55,511
                                          ----------   ----     --------   --------   --------    --------
Balance, December 31, 1998 .............  65,044,275   $ 65     $123,386   $216,918   $(13,016)   $327,353
                                          ==========   ====     ========   ========   ========    ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       26
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

                                                    YEARS ENDED DECEMBER 31,
                                              ---------------------------------
                                                 1998        1997        1996
                                                 ----        ----        ----
Cash flows from operating activities:
 Net earnings ............................... $  55,511   $  41,644   $  27,422
 Adjustments to reconcile net earnings to
  net cash provided by operating activities:
  Depreciation and amortization .............    42,568      37,104      33,883
  Deferred income taxes .....................    15,610       4,830       3,510
  Income tax benefit arising from the
   exercise of stock options ................     3,349       2,765       1,330
  Provision for losses on accounts
   receivable................................     1,110         240         616
  Amortization of deferred compensation .....       212         136          71
  Change in assets and liabilities (net of
   effects of acquisitions in 1997 and 1996):
   Increase in accounts receivable ..........   (27,056)    (14,890)    (22,637)
   Increase in inventories and supplies .....      (357)       (512)       (774)
   Decrease (increase) in prepaid expenses
    and other current assets ................   (10,138)     (1,636)      1,912
   Decrease (increase) in other assets ......        78        (720)        416
   Increase in accounts payable, accrued
    liabilities and claims accruals .........    33,982       6,932      13,035
                                              ---------   ---------   ---------
      Net cash provided by operating
       activities ...........................   114,869      75,893      58,784
                                              ---------   ---------   ---------
Cash flows from investing activities:
 Proceeds from sale of property and
  equipment .................................    63,233      30,680      36,692
 Capital expenditures .......................  (238,002)   (131,310)   (111,820)
 Payments received on equipment sales
  receivables................................     3,407         389         106
 Business acquisitions ......................                (3,749)     (5,148)
                                              ---------   ---------   ---------
      Net cash used in investing
       activities ...........................  (171,362)   (103,990)    (80,170)
                                              ---------   ---------   ---------
Cash flows from financing activities:
 Repayments of long-term debt ...............    (8,287)    (10,332)    (60,897)
 Proceeds from issuance of long-term debt ...                            15,026
 Increase in borrowings under
    revolving line of credit ................    71,500      40,000       4,750
 Payment of stock split fractional shares ...       (21)
 Proceeds from sale of common stock,
    net of issuance costs ...................     3,705       2,945      61,090
 Purchase of treasury stock .................    (9,600)
                                              ---------   ---------   ---------
      Net cash provided by financing
       activities ...........................    57,297      32,613      19,969
                                              ---------   ---------   ---------
Net increase (decrease) in cash .............       804       4,516      (1,417)
Cash at beginning of year ...................     5,726       1,210       2,627
                                              ---------   ---------   ---------
Cash at end of year ......................... $   6,530   $   5,726   $   1,210
                                              =========   =========   =========

See accompanying notes to consolidated financial statements.

                                       27
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
                                 (IN THOUSANDS)


                                                      YEARS ENDED DECEMBER 31,
                                                   -----------------------------
                                                     1998        1997       1996
                                                     ----        ----       ----
Supplemental disclosure of cash flow
 information:
 Cash paid during the year for:
  Interest .....................................   $ 5,842    $ 4,568   $ 7,112
                                                   =======    =======   =======
  Income taxes .................................   $27,404    $23,059   $14,163
                                                   =======    =======   =======

Supplemental schedule of noncash investing
 and financing activities:
  Equipment sales receivables ..................   $ 5,385    $ 3,284   $   362
                                                   =======    =======   =======
  Direct financing for purchase of equipment ...   $   436
                                                   =======
During 1997 and 1996, in connection with
 business acquisitions, assets were acquired
 and liabilities were incurred as follows:
  Current assets ...............................              $   180   $   222
  Property and equipment .......................                2,554     5,644
  Intangibles ..................................                1,015     1,200
  Issuance of common stock .....................                         (1,918)
                                                              -------   -------
  Cash paid ....................................              $ 3,749   $ 5,148
                                                              =======   =======

See accompanying notes to consolidated financial statements.

                                       28
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 1998, 1997 AND 1996


(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

         The  consolidated  financial  statements  include the accounts of Swift
Transportation  Co.,  Inc.,  a  Nevada  holding  company,  and its  wholly-owned
subsidiaries   (the  Company).   All  significant   intercompany   balances  and
transactions have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS

         For purposes of the statement of cash flows, 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.
Net gains in 1998,  1997 and 1996 were  $6,105,000,  $3,626,000 and  $2,185,000,
respectively.

         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 against the related liability and
neither is reflected on the consolidated balance sheet.

         For the years  ended  December  31,  1998,  1997 and 1996,  the Company
capitalized  interest  related to  self-constructed  assets  totaling  $894,000,
$586,000 and $428,000, respectively.

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

                                       29
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

GOODWILL

         Goodwill represents the excess of purchase price over fair value of net
assets acquired.  Such goodwill is being amortized on the  straight-line  method
over  periods  ranging  from  15  to  20  years.  Accumulated  amortization  was
$3,762,000  and  $2,901,000  at December  31, 1998 and 1997,  respectively.  The
Company  continually  evaluates whether events and  circumstances  have occurred
that  indicate the  remaining  estimated  useful life of goodwill and other long
lived  assets may  warrant  revision  or that the  remaining  balance may not be
recoverable.  When  factors  indicate  that the asset  should be  evaluated  for
possible  impairment,  the Company uses an estimate of the undiscounted net cash
flows over the remaining life of the asset in  determining  whether the asset is
impaired.

REVENUE RECOGNITION

         Operating  revenues and related  direct costs are  recognized as of the
date the freight is picked up for shipment.

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  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.

EARNINGS PER SHARE

         Basic earnings per share is computed using the weighted  average number
of common shares  outstanding  during each period  (64,005,000,  63,363,000  and
56,151,000 for 1998, 1997, and 1996, respectively).  Diluted earnings per common
share  includes the impact of stock  options  assumed to be exercised  using the
treasury stock method. The denominator for diluted earnings per share is greater
than  the  denominator  used in the  basic  earnings  per  share  by  1,245,000,
1,413,000,  and 1,603,000  shares in 1998,  1997,  and 1996,  respectively.  The
numerator is the same for both basic and diluted earnings per share.

USE OF ESTIMATES

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

ACCOUNTING STANDARDS NOT YET ADOPTED BY THE COMPANY

         The  Financial  Accounting  Standards  Board has issued  Statements  of
Financial  Accounting  Standards for which the required  implementation date has
not yet become  effective.  None of these  accounting  standards are expected to
have a material impact on the Company's consolidated financial statements.

                                       30
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2) ACCOUNTS RECEIVABLE

         Accounts receivable consists of:

                                                                DECEMBER 31,
                                                           -------------------
                                                             1998       1997
                                                             ----       ----
                                                             (IN THOUSANDS)
             Trade customers ........................      $112,290   $ 88,373
             Equipment manufacturers ................         1,050      2,657
             Income tax receivable ..................         3,645
             Other ..................................         2,686      1,848
                                                           --------   --------
                                                            119,671     92,878
             Less allowance for doubtful accounts ...         1,116        291
                                                           --------   --------
                                                           $118,555   $ 92,587
                                                           ========   ========


         The schedule of allowance for doubtful accounts is as follows:

                                       BEGINNING                        ENDING
                                        BALANCE  ADDITIONS  DEDUCTIONS  BALANCE
                                        -------  ---------  ----------  -------
                                                     (IN THOUSANDS)
             Year ended December 31:
             1998 ...................   $  291     $1,110     $ (285)    $1,116
                                        ======     ======     ======     ======
             1997 ...................   $  553     $  240     $ (502)    $  291
                                        ======     ======     ======     ======
             1996 ...................   $  927     $  616     $ (990)    $  553
                                        ======     ======     ======     ======

(3) ASSETS HELD FOR SALE

         Assets held for sale consist of land, land  improvements,  building and
equipment  related to the Company's former  corporate  headquarters and terminal
located in Phoenix,  Arizona and is stated at the lower of  depreciated  cost or
fair value less costs to sell.

(4) ACCRUED LIABILITIES

         Accrued liabilities consists of:

                                                           DECEMBER 31,
                                                      ---------------------
                                                        1998          1997
                                                        ----          ----
                                                          (IN THOUSANDS)

             Employee compensation ............       $16,741       $12,400
             Fuel and mileage taxes ...........         3,789         2,662
             Income taxes payable .............                       1,575
             Other ............................         6,743         3,540
                                                      -------       -------
                                                      $27,273       $20,177
                                                      =======       =======

                                       31
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(5) BORROWINGS UNDER REVOLVING LINE OF CREDIT

         The Company has a $170 million unsecured  revolving line of credit (the
line of credit) under an agreement  with six major banks (the Credit  Agreement)
which matures on January 16, 2003.  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,  as defined in the Credit Agreement.  The unused portion of the line of
credit is subject to a commitment fee.

         The Credit  Agreement  requires the Company to meet  certain  covenants
with respect to debt to equity and debt coverage  ratios.  The Credit  Agreement
also requires the Company to maintain  unencumbered assets of not less than 120%
of unsecured indebtedness (as defined).

         The Credit  Agreement  includes  financing  for letters of credit.  The
Company has outstanding  letters of credit  primarily for workers'  compensation
and liability self-insurance purposes totaling $14 million at December 31, 1998.

(6) LONG-TERM DEBT

         Long-term debt consists of the following:
                                                                 DECEMBER 31,
                                                              -----------------
                                                                1998      1997
                                                                ----      ----
                                                                (IN THOUSANDS)
Notes payable to commercial lending institutions
with varying payments through the year 2001:
  Fixed interest rates ranging from 2.8% to 7.3% ..........   $   918   $ 2,206
  Floating interest rate based on LIBOR plus .45%
   to .625% (effective rates ranging from 6.2% to
   6.32% at December 31, 1997) ............................               6,563
Note payable to insurance company bearing interest at
  6.78% payable monthly with principal payments of
  $3,000,000 due in 2002 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 ................................    15,000    15,000
                                                              -------   -------
          Total long-term debt ............................    15,918    23,769
Less current portion ......................................       710     6,849
                                                              -------   -------
Long-term debt, less current portion ......................   $15,208   $16,920
                                                              =======   =======

                                       32
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

         The aggregate annual  maturities of long-term debt exclusive of amounts
due under the revolving  line of credit (see note 5) as of December 31, 1998 are
as follows:

         YEAR ENDING
         DECEMBER 31                                       (IN THOUSANDS)
         -----------                                        ------------
         1999...........................................     $      710
         2000...........................................            150
         2001...........................................             58
         2002...........................................          3,000
         2003...........................................          3,000
         Thereafter.....................................          9,000
                                                             ----------
                                                             $   15,918
                                                             ==========
(7) COMMITMENTS

LEASES

         The Company leases various  revenue  equipment and terminal  facilities
under operating  leases. At December 31, 1998, the future minimum lease payments
under noncancelable operating leases are as follows:

         YEAR ENDING                                        REVENUE
         DECEMBER 31,                         EQUIPMENT    FACILITIES     TOTAL
         ------------                         ---------    ----------     -----
                                                        (IN THOUSANDS)
         1999 ...........................      $33,574      $   848      $34,422
         2000 ...........................       19,933          484       20,417
         2001 ...........................       11,557          266       11,823
         2002 ...........................        1,324          163        1,487
         2003 ...........................                        18           18
         Thereafter .....................                       296          296
                                               -------      -------      -------
         Total minimum lease payments ...      $66,388      $ 2,075      $68,463
                                               =======      =======      =======

         The  revenue   equipment  leases  generally  include  purchase  options
exercisable  at the  completion  of the lease.  The  Company  recorded  gains of
approximately $3.8 million,  $770,000,  and $3.3 million from the sale of leased
tractors in 1998, 1997, and 1996, respectively.

PURCHASE COMMITMENTS

         The Company had commitments  outstanding to acquire  revenue  equipment
for  approximately  $247  million at December  31,  1998.  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.

                                       33
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(8) STOCKHOLDERS' EQUITY

         On March 12,1998,  the Company  completed a  three-for-two  stock split
effected  in the form of a dividend  of one share of common  stock for every two
shares  of  common  stock   outstanding.   All  share  and  per  share   amounts
retroactively  reflect the effect of this split for all periods presented in the
consolidated financial statements.

         The Company  purchased  826,500  shares of its common stock during 1998
for a total cost of $9.6 million.  These shares 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.

STOCK COMPENSATION PLANS

         At December 31, 1998,  the Company has three  stock-based  compensation
plans,  which are described  below.  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  $212,000,  $136,000  and  $71,000  for  1998,  1997 and 1996,
respectively.

         Had compensation cost for the Company's three 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:

                                                1998      1997      1996
                                                ----      ----      ----
Net earnings ...................  As Reported  $55,511   $41,644   $27,422
                                               =======   =======   =======
                                  Pro forma    $54,755   $41,147   $27,154
                                               =======   =======   =======
Basic earnings per share .......  As Reported  $   .87   $   .66   $   .49
                                               =======   =======   =======
                                  Pro forma    $   .86   $   .65   $   .48
                                               =======   =======   =======
Diluted earnings per share .....  As Reported  $   .85   $   .64   $   .47
                                               =======   =======   =======
                                  Pro forma    $   .84   $   .64   $   .47
                                               =======   =======   =======

         Pro forma net earnings  reflect  only  options  granted in 1995 through
1998.  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 of 9 years and  compensation  cost for options  granted prior to
January 1, 1995 is not considered under SFAS No. 123.

FIXED STOCK OPTION PLANS

         The Company has two fixed stock option  plans.  Under the 1990 Employee
Stock Option  Plan,  the Company may grant  options to  employees  for up to 6.3
million shares of common stock. Under the 1994 Non-Employee  Directors Plan, the
Company may grant options to non-employee  directors for up to 135,000 shares of
common  stock.  Under both plans,  the exercise  price of each option  equals 85
percent of the market price of the Company's stock on the date of the grant, and
an option's  maximum term is ten years.  Options under the Employee Stock Option
Plan generally  vest 20 percent after five years and 20 percent each  succeeding
year. Options under the Non-Employee Directors Plan vest on the grant date.

                                       34
<PAGE>
                 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 1996 through 1998:

                                                1998     1997      1996
                                                ----     ----      ----
   Dividend yield ............................    0%       0%        0%
   Expected volatility .......................   45%      35%     46.5%
   Risk free interest rate ...................    5%       6%      6.5%
   Expected lives (days after vesting date)...   51       36        42

         A summary of the status of the  Company's  two fixed stock option plans
as of December 31, 1998,  1997 and 1996, and changes during the years then ended
on those dates is presented below:
<TABLE>
<CAPTION>
                                              1998                   1997                1996
                                     ---------------------   ------------------   -------------------
                                                 WEIGHTED-             WEIGHTED-             WEIGHTED-
                                                 AVERAGE               AVERAGE               AVERAGE
                                                 EXERCISE              EXERCISE              EXERCISE
                                       SHARES     PRICE      SHARES     PRICE      SHARES     PRICE
                                       ------     -----      ------     -----      ------     -----
<S>                                  <C>         <C>        <C>         <C>          <C>         <C>
Outstanding at beginning of year ...  3,681,360   $ 5.27    3,673,800   $ 2.91    4,169,362   $ 2.67
Granted ............................    812,400   $10.15    1,006,312   $10.19      112,500   $ 7.35
Exercised ..........................   (615,262)  $ 1.55     (691,852)  $ 1.37     (501,075)  $ 1.41
Forfeited ..........................    (52,673)  $ 9.82     (306,900)  $ 1.93     (106,987)  $ 5.32
                                     ----------            ----------            ----------
Outstanding at end of year .........  3,825,825   $ 6.84    3,681,360   $ 5.27    3,673,800   $ 2.91
                                     ==========            ==========            ==========

Options exercisable at year-end ....    164,025               177,075               182,925
                                     ==========            ==========            ==========
Weighted-average fair value of
 options granted during the year ... $     7.71            $     7.24            $     8.41
                                     ==========            ==========            ==========
</TABLE>

         The following table  summarizes  information  about fixed stock options
outstanding at December 31, 1998:

                        OPTIONS OUTSTANDING                 OPTIONS EXERCISABLE
                     ------------------------             ----------------------
                                   WEIGHTED-
                        NUMBER      AVERAGE    WEIGHTED-     NUMBER    WEIGHTED-
                     OUTSTANDING   REMAINING    AVERAGE   EXERCISABLE   AVERAGE
                          AT      CONTRACTUAL  EXERCISE        AT      EXERCISE
                       12/31/98       LIFE       PRICE      12/31/98     PRICE
                       --------       ----       -----      --------     -----
$1.24 to $3.15 ......   976,537       2.69      $ 1.87       152,025    $ 2.20
$4.87 to $5.62 ......   771,413       5.87      $ 5.19
$6.28 to $10.01 ..... 1,074,600       7.73      $ 9.37         4,500    $ 6.63
$10.02 ..............   765,900       9.75      $10.02
$10.39 to $12.61 ....   237,375       8.65      $10.96         7,500    $12.35
                      ---------                              -------
                      3,825,825       6.53      $ 6.84       164,025    $ 2.79
                      =========                              =======

                                       35
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


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 whom are eligible to participate.  Under the terms of the Plan, employees
can  choose  each year to have up to 15 percent of their  annual  base  earnings
withheld to purchase the Company's common stock. The purchase price of the stock
is 85 percent of the lower of the  beginning-of-period  or  end-of-period  (each
period  being the first and second  six  calendar  months)  market  price.  Each
employee is restricted to purchasing  during each period a maximum of $12,500 of
stock  determined by using the  beginning-of-period  price.  Under the Plan, the
Company  issued  240,135,  195,750  and 153,411  shares to 1,351,  1,143 and 482
employees in 1998, 1997 and 1996, 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:

                                        1998     1997       1996
                                        ----     ----       ----
         Dividend yield ............      0%       0%         0%
         Expected volatility .......     45%      35%      46.5%
         Risk free interest rate....    4.5%       5%         5%

         The  weighted-average  fair value of those  purchase  rights granted in
1998, 1997 and 1996 was $3.98, $3.09 and $2.53 respectively.

(9) INCOME TAXES

         Income tax expense consists of:

                                    1998       1997       1996
                                    ----       ----       ----
                                         (IN THOUSANDS)
         Current expense:
              Federal ........    $20,445    $19,395    $13,610
              State ..........      3,494      4,125      2,670
                                  -------    -------    -------
                                   23,939     23,520     16,280
                                  -------    -------    -------
         Deferred expense:
              Federal ........     11,435      4,242      2,980
              State ..........      2,421        588        530
                                  -------    -------    -------
                                   13,856      4,830      3,510
                                  -------    -------    -------
                                  $37,795    $28,350    $19,790
                                  =======    =======    =======

                                       36
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


         The Company's effective tax rate was 40.5%, 40.5% and 42% in 1998, 1997
and 1996,  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,
                                                     ---------------------------
                                                       1998      1997      1996
                                                       ----      ----      ----
                                                            (IN THOUSANDS)
    Computed "expected" tax expense ..............   $32,657   $24,498   $16,524
    Increase in income taxes resulting from:
     State income taxes, net of federal
      income tax benefit .........................     4,185     3,002     2,080
     Other, net ..................................       953       850     1,186
                                                     -------   -------   -------
                                                     $37,795   $28,350   $19,790
                                                     =======   =======   =======

         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,
                                                            -------------------
                                                              1998       1997
                                                              ----       ----
                                                               (IN THOUSANDS)
    Deferred tax assets:
     Claims accruals ..................................     $ 20,480   $ 14,790
     Accounts receivable due to allowance for
      doubtful accounts................................          440        110
     Other ............................................          160        100
                                                            --------   --------
         Total deferred tax assets ....................       21,080     15,000
                                                            --------   --------
    Deferred tax liabilities:
     Property and equipment, principally due to
      differences in depreciation .....................      (70,010)   (52,140)
     Prepaid taxes, licenses and permits deducted
      for tax purposes ................................       (5,820)    (2,000)
                                                            --------   --------
         Total deferred tax liabilities ...............      (75,830)   (54,140)
                                                            --------   --------
         Net deferred tax liability ...................     $(54,750)  $(39,140)
                                                            ========   ========

                                       37
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


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

                                                       DECEMBER 31,
                                                  ---------------------
                                                    1998         1997
                                                    ----         ----
                                                     (IN THOUSANDS)

         Current deferred tax asset ..........    $  4,010     $  5,280
         Noncurrent deferred tax liability....     (58,760)     (44,420)
                                                  --------     --------
         Net deferred tax liability ..........    $(54,750)    $(39,140)
                                                  ========     ========

(10) CLAIMS ACCRUALS

         The Company's insurance program for liability,  workers'  compensation,
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, 1998 and 1997. 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.

(11) 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.

CASH

         The  carrying  amount is assumed  to be the fair  value  because of the
liquidity of these instruments.

ACCOUNTS RECEIVABLES AND PAYABLES

         Fair  value is  considered  to be equal  to the  carrying  value of the
accounts  receivable and 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 AND BORROWINGS UNDER REVOLVING LINE OF CREDIT

         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.

                                       38
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


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,  1998,  the
amounts that will  actually be realized or paid at settlement or maturity of the
instruments could be significantly different.

(12) 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
voluntary   profit  sharing   contributions.   Employees'   rights  to  employer
contributions vest after five years from their date of employment. The Company's
contribution totaled  approximately $7.1 million,  $4.2 million and $2.9 million
for 1998, 1997 and 1996, respectively.

(13) RELATED PARTY TRANSACTIONS

         The  Company  leases  various  properties  from  entities  owned by the
principal stockholder.  Rents paid under these leases totaled $135,000, $700,000
and $1.0  million  for the  years  ended  December  31,  1998,  1997  and  1996,
respectively.

         The Company provided  transportation  services to entities owned by its
principal stockholder. For the years ended December 31, 1998, 1997 and 1996, the
Company recognized $831,000, $318,000 and $213,000,  respectively,  in operating
revenue from these  entities.  At December  31,  1998,  $341,000 was owed to the
Company for these services.

         A company owned by the Company's principal  stockholder leases tractors
to some of the Company's  owner  operators.  In connection  with this program in
1998,  1997 and 1996,  the Company  acquired  new tractors and sold them to this
entity for $22.1  million,  $22.8 million and $13.2 million,  respectively,  and
recognized fee income of $1.3 million, $1.4 million and $855,000,  respectively.
During 1998,  1997,  and 1996,  the Company also sold used revenue  equipment to
this  entity  totaling  $320,000,   $238,000  and  $700,000  respectively,   and
recognized gains of $69,000 in 1998, $36,000 in 1997 and $114,000 in 1996.

         A Company owned by the principal stockholder provides aircraft services
to the  Company.  Payments  for such  services  totaled  $429,000,  $590,000 and
$450,000 for the years ended December 31, 1998, 1997 and 1996, respectively.  At
December 31, 1998, $141,000 was owed to this entity for such services.

                                       39
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


         During  1997 and 1996,  the  Company  purchased  parts and  maintenance
services from an entity owned by one of the Company's outside directors totaling
$3,217,000 and  $2,379,000,  respectively.  This entity was sold to an unrelated
party on January 1, 1998.

         The Company's principal  stockholder  acquired a significant  ownership
interest in a less than  truckload  carrier  during 1997.  The Company  provides
transportation  services to this  carrier and  recognized  $5.3 million and $1.5
million in  operating  revenue in 1998 and 1997,  respectively.  At December 31,
1998,  $401,000 was owed to the Company for these  services.  In  addition,  the
Company  sold  used  equipment  to the  carrier  for  $261,000  in 1998 and paid
$227,000  and  $80,000 to the carrier  for  facilities  rental in 1998 and 1997,
respectively.

         The  Company's  principal  stockholder  owns an entity  with a fleet of
approximately  200 tractors  which operates as a fleet operator for the Company.
During 1998 and 1997,  the Company  paid $17.2  million and $5.3 million to this
fleet  operator for  purchased  transportation  services.  At December 31, 1998,
$326,000 was owed for these purchased transportation services. Also, the Company
was paid  $267,000  and $264,000 by this fleet  operator  and paid  $450,000 and
$117,000 to this fleet  operator  for various  services  including  training and
repairs in 1998 and 1997,  respectively.  At December 31, 1998, $32,000 was owed
to the Company and nothing was owed by the Company for these services.

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

(14) ACQUISITIONS

         On April 8, 1997,  the Company  completed  its  acquisition  of certain
assets of Direct Transit, Inc. ("DTI"), a Debtor-In-Possession  in United States
Bankruptcy  Court.  DTI was a dry van carrier  based in North Sioux City,  South
Dakota  and  operated  predominantly  in the  eastern  two-thirds  of the United
States. The Company acquired inventory, furniture and office equipment, computer
equipment and miscellaneous assets from DTI for $2.7 million.  Also, the Company
paid $1 million to the principal  shareholder  of DTI in exchange for a covenant
not to compete. Separately, the Company acquired 565 tractors and 1,622 trailers
from various  lessors.  Certain of the revenue  equipment  was purchased for $31
million  and new lease  agreements  were  negotiated  on $11  million of revenue
equipment.  The Company used working  capital and borrowings  under its existing
line of credit to acquire the assets  described above and for payments under the
covenant not to compete.

         On September 12, 1996, the Company  acquired  substantially  all of the
operating  assets  utilized in the dry freight van division of Navajo  Shippers,
Inc. and two of its wholly-owned  subsidiaries,  Digby Leasing and Digby-Ringsby
Truck  Lines,  Inc.  (collectively,  "Navajo  Shippers").  The  acquisition  was
accounted  for as a purchase and the results of  operations  of Navajo  Shippers
have  been  included  in the  consolidated  financial  statements  beginning  on
September  12,  1996.  The Company  acquired  287  tractors and 417 trailers and
related on-board communication  equipment.  The Company assumed Navajo Shipper's
position on operating  leases for 257 tractors and acquired 30 owner  operators.
Total  consideration  for the  assets  purchased  and  goodwill  was  $7,066,000
consisting of cash of  $5,148,000  and 202,500  shares of the  Company's  common
stock  valued at  $1,918,000.  The Company paid the sellers  approximately  $1.2
million for  commissions  on revenues  generated by the Company in the 12 months
following  the date of  acquisition.  The excess of cost over net book value has
been accounted for as goodwill.  Goodwill is being  amortized on a straight-line
basis over 15 years.

                                       40
<PAGE>
                 SWIFT TRANSPORTATION CO., INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(15) COMMITMENTS AND 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 financial condition of the Company.

(16) 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.

(17) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

                                       FIRST    SECOND      THIRD     FOURTH
                                      QUARTER   QUARTER    QUARTER    QUARTER
                                      -------   -------    -------    -------
                                          (IN THOUSANDS, EXCEPT SHARE DATA)
    YEAR ENDED DECEMBER 31, 1998
    Operating revenue .............. $191,608   $215,832   $227,184   $238,809
    Operating income ...............   16,936     25,086     27,309     29,361
    Net earnings ...................    9,412     14,036     15,644     16,419
    Basic earnings per share .......      .15        .22        .24        .26
    Diluted earnings per share .....      .14        .21        .24        .25

    YEAR ENDED DECEMBER 31, 1997
    Operating revenue .............. $156,074   $180,855   $188,071   $188,640
    Operating income ...............   11,123     18,979     22,829     21,138
    Net earnings ...................    6,231     10,556     12,882     12,005
    Basic earnings per share .......      .10        .17        .20        .19
    Diluted earnings per share .....      .10        .16        .20        .18

(18) SUBSEQUENT EVENT

         On March 15, 1999, the Company's Board of Directors  approved a 3-for-2
stock split  effected in the form of a stock  dividend  and payable on April 10,
1999 to the  stockholders  of record at the close of business on March 31, 1999.
All share amounts,  share prices and earnings per share have been  retroactively
adjusted to reflect this 3-for-2 stock split.

                                       41
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
        AND FINANCIAL DISCLOSURE

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

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information  with respect to  continuing  directors and nominees of the
Company  is set forth  under the  captions  "Information  Concerning  Directors,
Nominees and Officers," "Meetings of the Board of Directors and its Committees,"
and  "Director  Compensation"  in the  Registrant's  Notice and Proxy  Statement
relating to its 1999 Annual Meeting of Stockholders  ("the 1999 Notice and Proxy
Statement") to be held on May 20, 1999  incorporated by reference into this Form
10-K  Report.  With  the  exception  of  the  foregoing  information  and  other
information  specifically  incorporated by reference into this Form 10-K Report,
the  Registrant's  1999 Notice and Proxy  Statement is not being filed as a part
hereof.

ITEM 11. EXECUTIVE COMPENSATION

         Information  with respect to executive  compensation is set forth under
the captions "Executive  Compensation,"  "Compensation  Committee Interlocks and
Insider Participation,"  "Meetings and Compensation" and "Employment Agreements"
in the 1999 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 1999 Notice and Proxy  Statement  are not
incorporated by reference herein.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information  with respect to security  ownership of certain  beneficial
owners and  management  is included  under the caption  "Security  Ownership  of
Principal  Stockholders  and  Management" in the 1999 Notice and Proxy Statement
and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information with respect to certain  relationships  and transactions of
management   is  set  forth  under  the  caption   "Certain   Transactions   and
Relationships" and "Compensation Committee Interlocks and Insider Participation"
in the 1999 Notice and Proxy Statement and is incorporated herein by reference.

                                       42
<PAGE>
                                     PART IV

ITEM 14. 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 22

            (2)  Consolidated  Financial  Statements  and            Page 23
                 Notes    to    Consolidated    Financial
                 Statements  of  the  Company,  including
                 Consolidated   Balance   Sheets   as  of
                 December  31,  1998 and 1997 and related
                 Consolidated   Statements  of  Earnings,
                 Stockholders'  Equity and Cash Flows for
                 each  of the  years  in  the  three-year
                 period ended December 31, 1998

          (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

          None

     (c)  Exhibits.

EXHIBIT                                                  PAGE OR
NUMBER           DESCRIPTION                         METHOD OF FILING
------           -----------                         ----------------
3.1     Articles of Incorporation of        Incorporated by reference to Exhibit
        the Company                         3.1  of  the   Company's   Form  S-3
                                            Registration  Statement No. 33-66034
                                            ("S-3 #33-66034")

3.2     Bylaws of the Company               Incorporated by reference to Exhibit
                                            3.2 of S-3 #33-66034

4       Specimen  of  Common   Stock        Incorporated by reference to Exhibit
        Certificate                         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    Lease   Agreement    between        Incorporated by reference to Exhibit
        Jerry and  Vickie  Moyes and        10-E(1)  of the  Company's  Form S-1
        the   Company   relating  to        Registration Statement No. #33-34983
        Stockton,         California        ("S-1 #33-34983")
        property,  dated  April  10,
        1990

                                       43
<PAGE>
EXHIBIT                                                     PAGE OR
NUMBER           DESCRIPTION                            METHOD OF FILING
------           -----------                            ----------------
10.4.1  Asset   Purchase   Agreement        Incorporated by reference to Exhibit
        dated  June 17,  1994 by and        1 of the Company's Current Report on
        among  Swift  Transportation        Form 8-K dated  October 6, 1994 (the
        Co.,    Inc.,    a    Nevada        "10/6/94 8-K")
        corporation;           Swift
        Transportation Co., Inc., an
        Arizona  corporation;   Mark
        VII,    Inc.,   a   Missouri
        corporation;  MNX  Carriers,
        Inc.,       a       Delaware
        corporation;             and
        Missouri-Nebraska   Express,
        Inc., an Iowa corporation

10.4.2  Amendment   No.   1,   dated        Incorporated by reference to Exhibit
        September  30, 1994,  to the        2 of the 10/6/94 8-K
        Asset Purchase Agreement

10.5    Stock   Option   Plan,    as        Incorporated by Reference to Exhibit
        amended through November 18,        10.7 of the Company's  Annual Report
        1994*                               on  Form  10-K  for the  year  ended
                                            December  31,  1994 (the  "1994 Form
                                            10- K")

10.6    Non-Employee Directors Stock        Incorporated by reference to Exhibit
        Option   Plan,   as  amended        10.8 of the 1994 Form 10-K
        through November 18, 1994*

10.7    Employee    Stock   Purchase        Incorporated by reference to Exhibit
        Plan,  as  amended   through        10.9 of the 1994 Form 10-K
        November 18, 1994*

10.8    Swift   Transportation  Co.,        Incorporated by reference to Exhibit
        Inc.   Retirement   (401(k))        10.14  of  the  Company's  Form  S-1
        Plan dated January 1, 1992*         Registration Statement No. #33-52454

10.9    Note     agreement     dated        Incorporated by reference to Exhibit
        February  26,  1996  by  and        10.12 of the Company's Annual Report
        between Swift Transportation        on  Company  Form  10-K for the year
        Co.,  Inc.  and   Great-West        ended  December  31,1995  (the "1995
        Life  &  Annuity   Insurance        Form 10-K")
        Company

10.10   Construction  Contract dated        Incorporated by reference to Exhibit
        November  14,  1994  by  and        10.13 of the 1995 Form 10-K
        between Swift Transportation
        Co., Inc. and Opus Southwest
        Corporation

10.11   Note agreement dated January        Incorporated by reference to Exhibit
        16,   1997  by  and  between        10.11 of the Company's Annual Report
        Swift   Transportation  Co.,        on  Form  10-K  for the  year  ended
        Inc.  and Wells  Fargo Bank,        December  31,1996  (the  "1996  Form
        N.A.,  ABN Amro  Bank  N.V.,        10-K")
        The Chase Manhattan Bank and
        The First  National  Bank of
        Chicago.

10.12   Asset   Purchase   Agreement        Incorporated by reference to Exhibit
        Dated  as  of  February  20,        1 of the Company's Current Report on
        1997       Among       Swift        Form 8-K  dated  April 8,  1997 (the
        Transportation Co., Inc. and        "4/8/97 8-K")
        Direct  Transit,   Inc.  and
        Charles G. Peterson

                                       44
<PAGE>
EXHIBIT                                                  PAGE OR
NUMBER           DESCRIPTION                         METHOD OF FILING
------           -----------                         ----------------
10.13   First Modification Agreement        Incorporated by Reference to Exhibit
        to  Note   Agreement   dated        10.13  of  the  Company's  Quarterly
        January   16,  1997  by  and        Report on Form 10-Q for the  quarter
        between Swift Transportation        ended  September 30, 1998 (the "1998
        Co.,  Inc.  and Wells  Fargo        Third Quarter Form 10-Q")
        Bank,    N.A.,    ABN   Amro
        Bank    N.V.,    The   Chase
        Manhattan Bank and The First
        National Bank of Chicago

10.14   Second          Modification        Incorporated by reference to Exhibit
        Agreement to Note  Agreement        10.14 of the 1998 Third Quarter Form
        dated  January  17,  1997 by        10-Q
        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.

11      Schedule of  computation  of        Filed herewith
        net earnings per share

22      Subsidiaries of Registrant          Filed herewith

23      Consent of KPMG LLP                 Filed herewith

27      Financial  Data Schedule for        Filed herewith
        twelve months ended December
        31, 1998

99      Private  Securities  Litiga-        Filed herewith
        tion   Reform  Act  of  1995 
        Safe    Harbor    Compliance
        Statement    for    Forward-
        Looking Statements

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

                                       45
<PAGE>
                                   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 16th
day of March, 1999.

                                      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,  that  each  person  whose  signature
appears below  constitutes and appoints Jerry C. Moyes and William F. Riley III,
and each of them, his true and lawful  attorneys-in-fact  and agents,  with full
power of substitution  and  resubstitution,  for him and in his name,  place and
stead,  in any and all  capacities,  to sign any and all amendments to this Form
10-K Annual Report,  and to file the same, with all exhibits thereto,  and other
documents in connection  therewith with the Securities and Exchange  Commission,
granting unto said  attorneys-in-fact  and agents,  and each of them, full power
and  authority  to do and  perform  each and every act and thing  requisite  and
necessary to be done in 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  attorneys-in-fact  and agents, or his substitute or substitutes,  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. Moyes            Chairman of the Board,              March 16, 1999
--------------------------    President and Chief Executive
Jerry C. Moyes                Officer (Principal Executive
                              Officer)


/s/ William F. Riley III      Executive Vice President,           March 16, 1999
--------------------------    Secretary, Chief Financial Officer
William F. Riley III          (Principal Accounting Officer)
                              and Director

                                       S-1
<PAGE>

/s/ Rodney K. Sartor          Executive Vice President and        March 16, 1999
--------------------------    Director
Rodney K. Sartor


/s/ Lou A. Edwards            Director                            March 16, 1999
--------------------------
Lou A. Edwards


/s/ Alphonse E. Frei          Director                            March 16, 1999
--------------------------
Alphonse E. Frei


/s/ Earl H. Scudder, Jr.      Director                            March 16, 1999
--------------------------
Earl H. Scudder, Jr.

                                       S-2