##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-K

|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|          
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31,
    2002                                             
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

Commission File No. 0-18605

Swift Transportation Co., Inc.

(Exact name of registrant as specified in its
charter)


|                                                                                   |  |                                  
|---------------------------------------------------------------------------------- |  | ---------------------------------
|Nevada                                                                             |  | 86-0666860                       
|(State or other jurisdiction of
    incorporation or organization)                 |  | (IRS Employer Identification No.)
|                                                                                  
|2200 South 75th Avenue
    Phoenix, AZ(Address of principal executive
    offices) |  | 85043(Zip Code)                  

(602) 269-9700

(Registrants telephone number, including
area code)


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

None


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

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

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

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

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Exchange Act
Rule 12b-2).     Yes þ          No o

At June 28, 2002, the aggregate market value
of common stock held by non-affiliates of the Registrant was
$1,238,991,118.

The number of shares outstanding of the
Registrants common stock on March 21, 2003 was
83,233,464.

DOCUMENTS INCORPORATED BY REFERENCE

Materials from the Registrants Notice and
Proxy Statement relating to the 2003 Annual Meeting of
Stockholders have been incorporated by reference into
Part III, Items 10, 11, 12, 13 and 15.



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TABLE OF CONTENTS



|              |                                                                                                         |  |  |  |  |  |  | 
|------------- | ------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I       
|              | Item 1. Business                                                                                       
|              | Item 2. Properties                                                                                     
|              | Item 3. Legal Proceedings                                                                              
|              | Item 4. Submission of Matters to a Vote of Security Holders                                            
|PART II      
|              | Item 5. Market for the Registrants Common Stock and Related Stockholder Matters                       
|              | Item 6. Selected Financial and Operating Data                                                          
|              | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations          
|              | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                                    
|              | Item 8. Financial Statements and Supplementary Data                                                    
|              | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure           
|PART III     
|              | Item 10. Directors and Executive Officers of the Registrant                                            
|              | Item 11. Executive Compensation                                                                        
|              | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|              | Item 13. Certain Relationships and Related Transactions                                                
|              | Item 14. Controls and Procedures                                                                       
|              | Item 15. Principal Accountant Fees and Services                                                        
|PART IV      
|              | Item 16. Exhibits, Financial Statement Schedules and Reports on Form 8-K                               
|SIGNATURES   
|EXHIBIT INDEX
|EX-10.21     
|EX-21        
|EX-23.1      
|EX-23.2      
|EX-99.1      
|EX-99.2      
|EX-99.3      



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TABLE OF CONTENTS

|           |  |                                                                                                    |    |      |    | 
|---------- |  | -------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|           |  |                                                                                                    |    | Page
|           |  |                                                                                                    |    |     
|PART I    
|Item 1.    |  | Business                                                                                           |    |      | 2  | 
|Item 2.    |  | Properties                                                                                         |    |      | 9  | 
|Item 3.    |  | Legal Proceedings                                                                                  |    |      | 10 | 
|Item 4.    |  | Submission of Matters to a Vote of Security
    Holders                                            |    |      | 10 | 
|PART II   
|Item 5.    |  | Market for the Registrants Common Stock and
    Related Stockholder Matters                       |    |      | 10 | 
|Item 6.    |  | Selected Financial and Operating Data                                                              |    |      | 11 | 
|Item 7.    |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations          |    |      | 12 | 
|Item 7A.   |  | Quantitative and Qualitative Disclosures about
    Market Risk                                     |    |      | 21 | 
|Item 8.    |  | Financial Statements and Supplementary Data                                                        |    |      | 22 | 
|Item 9.    |  | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure           |    |      | 45 | 
|PART III  
|Item 10.   |  | Directors and Executive Officers of the Registrant                                                 |    |      | 45 | 
|Item 11.   |  | Executive Compensation                                                                             |    |      | 45 | 
|Item 12.   |  | Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters |    |      | 45 | 
|Item 13.   |  | Certain Relationships and Related Transactions                                                     |    |      | 45 | 
|Item 14.   |  | Controls and Procedures                                                                            |    |      | 45 | 
|Item 15.   |  | Principal Accountant Fees and Services                                                             |    |      | 45 | 
|PART IV   
|Item 16.   |  | Exhibits, Financial Statement Schedules and
    Reports on Form 8-K                                |    |      | 46 | 
|SIGNATURES |  |                                                                                                    | 50 |     

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PART I




Item
1.     Business

General

Swift Transportation Co., Inc. is the largest
publicly-held, 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. The
Company operates predominantly in one industry, road
transportation, as a truckload motor carrier and thus has only
one single reportable segment.

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
Swift or 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, including
but not limited to the portions hereof entitled
Business  Growth Strategy and
Managements Discussion and Analysis of Financial
Condition and Results of Operations, contains
forward-looking statements. Additional written or oral
forward-looking statements may be made by the Company from time
to time in filings with the Securities and Exchange Commission
or otherwise. The words believe, expect,
anticipate, and project, and similar
expressions identify forward-looking statements, which speak
only as of the date the statement was made. Such forward-looking
statements are within the meaning of that term in
Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended. Such statements may include, but are not limited to,
projections of revenues, income, or loss, capital expenditures,
plans for future operations, financing needs or plans, the
impact of inflation, plans relating to products or services of
the Company, the benefits of the Companys terminal
network, the continued consolidation of the truckload industry,
the increase in the number of companies outsourcing their
transportation requirements, the Companys ability to sell
its used trucks at favorable prices, the Companys ability
to attract and retain qualified drivers, the Companys
ability to pass on to its customers increased labor and fuel
costs and protect itself against increases in fuel costs through
the use of fuel efficient equipment, and pending or future
acquisitions, as well as assumptions relating to the foregoing.
The Company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of
new information, future events, or otherwise.

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 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, in-house equipment maintenance. With an average
length of haul of less than 600 miles, Swift is able to limit
its direct competition with railroads, intermodal services and
longer-haul, less specialized truckload carriers. (See further
discussion under Competition.) Swift seeks to

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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 the
majority 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. Swift is currently extending the
usage of three year old tractors into the fourth year while
continuing to evaluate the October 2002 EPA engine. Until we
better understand the quality, reliability, and fuel economy
provided by these new engines we may choose to run our fleet up
to five years. Our agreements with our manufacturer enable us to
return trucks up to five years old with guaranteed residual
values. In addition, we are able to procure cost effective
warranties during years four and five.

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 2000 increased by 10% from 2000 to 2002. The
    largest 25, 10 and 5 customers, respectively, accounted for 50%,
    34% and 25% of revenues in 2002, 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
    acquisitions, which 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. In certain instances,
    such as the M.S. Carriers merger, where a proposed acquisition
    has the potential to significantly increase revenues, expand
    Swifts operations in certain key geographic regions, or
    provide important synergistic opportunities, such as increased
    efficiencies in equipment utilization, Swift may consider going
    forward with such an acquisition even though it is not likely to
    be accretive to earnings within a period of six months.
|
| |  | 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 strong regional operations and average length of haul
    of less than 600 miles position allows it to take advantage of
    this                                                                                                                                                                                                                                                                                                                                                                   

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| |  |                                                                                                                                                                                                                           
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | trend. 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

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
population centers. The terminals are located in close proximity
to major customers who provide Swift with significant traffic
volume. 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.

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 services include: 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 operations personnel are
better able to match available equipment to available loads and
schedule regular maintenance and fueling at Company terminals,
thereby enhancing 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
driver recruitment and retention.

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.

Swifts larger terminals are staffed with
terminal managers, driver managers and customer service
representatives. Terminal managers work with both the fleet
managers and the customer service representatives, as well as
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.

In addition to the domestic operations described
above, Swift has a growing cross border operation that primarily
ships through commercial border crossings from Laredo, Texas
westward to California. In 2000, Swift augmented its cross
border operation by acquiring 49% of Trans-Mex, a carrier that
focuses on shipments to and from Mexico and intends to purchase
the remaining 51% in February 2004. For additional information
regarding Swifts guarantee of certain Trans-Mex
obligations, see the Notes to Consolidated Financial Statements.

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

As a transportation logistics company, Transplace
matches shippers with trucking companies and receives a fee for
this service. Swift may receive from Transplace the opportunity
to provide transportation services to shippers. In addition,
Swift may utilize Transplace to assist in obtaining additional
capacity for a customer of Swift. During the year ended
December 31, 2002, Swift received less than 1% of its
operating revenue from Transplace and paid less than 4% of its
purchased transportation to Transplace.

Acquisitions

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

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

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

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,
improved fuel economy and reduced maintenance costs.

The following table shows the type and age of
Company-owned and leased equipment at December 31, 2002:

|               |       |             |       |              |  |             |        |          |  |              |     |             |  |  |     |       |  |  |     |       |  |  |     |     | 
|-------------- | ----- | ----------- | ----- | ------------ |  | ----------- | ------ | -------- |  | ------------ | --- | ----------- |  |  | --- | ----- |  |  | --- | ----- |  |  | --- | --- | 
|               |       |             |       | 57, 53 and |  | Sets of     |        | Flatbed  |  | Refrigerated |     | Specialized
|Model Year     |       | Tractors(1) |       | 48 Vans     |  | Double Vans |        | Trailers |  | Trailers     |     | Trailers   
|               |       |             |       |              |  |             |        |          |  |              |     |            
|2003           |       |             | 2,547 |              |  |             | 2,373  |          |  |              | 142 |             |  |  |     |       |  |  | 447 |       |  |  | 86  |    
|2002           |       |             | 2,682 |              |  |             | 1,349  |          |  |              |     |             |  |  | 264 |       |  |  | 230 |       |  |  | 116 |    
|2001           |       |             | 2,167 |              |  |             | 4,701  |          |  |              |     |             |  |  | 235 |       |  |  | 172 |       |  |  | 48  |    
|2000           |       |             | 3,991 |              |  |             | 10,697 |          |  |              |     |             |  |  | 85  |       |  |  | 48  |       |  |  | 100 |    
|1999           |       |             | 894   |              |  |             | 8,797  |          |  |              |     |             |  |  | 52  |       |  |  | 51  |       |  |  | 9   |    
|1998           |       |             | 153   |              |  |             | 5,525  |          |  |              |     |             |  |  | 21  |       |  |  |     |       |  |  | 2   |    
|1997           |       |             | 172   |              |  |             | 4,689  |          |  |              |     |             |  |  | 168 |       |  |  | 96  |       |  |  |     |    
|1996 and prior |       |             | 333   |              |  |             | 6,749  |          |  |              | 409 |             |  |  | 432 |       |  |  | 43  |       |  |  | 97  |    
|               |       |             |       |              |  |             |        |          |  |              |     |             |  |  |     |       |  |  |     |       |  |  |     |    
|               | Total |             |       | 12,939       |  |             |        | 44,880   |  |              |     | 551         |  |  |     | 1,257 |  |  |     | 1,087 |  |  |     | 458 | 
|               |       |             |       |              |  |             |        |          |  |              |     |             |  |  |     |       |  |  |     |       |  |  |     |    



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|    |                                        
|--- | ---------------------------------------
|(1) | Excludes 3,152 owner-operator tractors.

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When purchasing new revenue equipment, Swift
acquires tractors and trailers manufactured to the
Companys specifications. Since 1990, Swift has
predominantly acquired 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 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 and
retain drivers, maximize its fuel economy by capitalizing on
improvement in both engine efficiency and vehicle aerodynamics,
stabilize maintenance expense and maximize equipment
utilization. Swift is currently evaluating its replacement
policy in light of the changes to tractor engines due to new
emissions standards mandated by the U.S. Environmental
Protection Agency (EPA) that became effective on
October 1, 2002. Swift is currently extending the usage of
three year old tractors into the fourth year while continuing to
evaluate the October 2002 EPA engine. Until we better understand
the quality, reliability, and fuel economy provided by these new
engines we may choose to run our fleet up to five years. Our
agreements with our manufacturer enable us to return trucks up
to five years old with guaranteed residual values. In addition,
we are able to procure cost effective warranties during years
four and five.

Swift has installed Qualcomm onboard, two-way
vehicle satellite communication systems in the majority of its
tractors. This communication system links drivers to regional
terminals and corporate headquarters, allowing Swift to rapidly
alter 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 recruitment and retention. Swift
intends to continue to install the communication system in
substantially all tractors acquired in the future.

Swift has 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, below the
speed limits of many states. Swift believes these measures
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. M.S. Carriers drivers who joined
Swift upon the merger continue to operate at 65 miles per hour.

Swift enters into contracts with owner-operators.
These owner-operators own their tractors and are responsible for
operating costs as opposed to drivers who are employees of
Swift. The owner-operators operate under the authority of the
Company and are generally compensated based upon miles.
Owner-operators comprise approximately 25% of our total fleet.

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; and extra equipment for
the convenience of customers, which enables Swift to respond
promptly to customers varying requirements and assistance
in loading and unloading. Swift concentrates its marketing
efforts on expanding the amount of service it provides to
existing customers.

6



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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 50 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, 10 and 5 customers accounted for
approximately 50%, 34% and 25% respectively, of Swifts
revenues during 2002, 48%, 33% and 23%, respectively, of
Swifts revenues during 2001 and 44%, 30% and 19%,
respectively, of Swifts revenues during 2000. 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 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 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. The
majority of company drivers are compensated on the basis of
miles driven, loading/unloading and number of stops or
deliveries, plus bonuses. The base pay for the miles driven by a
drive increase with a drivers length of service. Drivers
employed by Swift participate in company-sponsored health, life
and dental insurance plans and are eligible to participate in 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, 2002, Swift employed
approximately 20,400 full-time persons, of whom approximately
16,100 were drivers (including driver trainees), 1,600 were
mechanics and other equipment maintenance personnel and the
balance were support personnel, such as sales personnel,
corporate managers and administration. No Swift driver or other
employee is represented by a collective bargaining unit. In the
opinion of management, Swifts relationship with its
drivers and employees is good.

7



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Safety

The Company has an active safety and loss
prevention program at each of its terminals. Supervisors engage
in ongoing training of drivers regarding safe vehicle
operations. The Company has adopted maximum speed limits. The
Company believes that its insurance and claims expense, as a
percentage of operating revenue is one of the best in the
industry, which is attributable to its overall strong safety
program. The Company has received the highest safety rating
given to motor carriers by the United States Department of
Transportation.

Fuel

In order to reduce fuel costs, the Company
purchases approximately 78% of its fuel in bulk at 34 of its 36
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 increased fuel
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 generally 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. Swift seeks to provide premium service with
commensurate rates, rather than compete primarily on the basis
of price. 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, and one may 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

The Company is regulated by the United States
Department of Transportation. This regulatory authority has
broad powers, generally governing matters such as authority to
engage in motor carrier operations, certain mergers,
consolidations and acquisitions and periodic financial
reporting. The trucking industry is subject to regulatory and
legislative changes, which can affect the economics of the
industry. The Company is also regulated by various state
agencies.

The Companys operations are also subject to
various federal, state and local environmental laws and
regulations dealing with transportation, storage, presence, use,
disposal and handling of hazardous materials, discharge of
stormwater and underground fuel storage tanks. The 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

8



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winter months primarily due to colder weather,
which causes higher fuel consumption from increased idle time.


Internet Web Site

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




Item
2.     Properties

Swifts headquarters is 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.

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

|                                |  |                 |               |             |  |                                          
|------------------------------- |  | --------------- | ------------- | ----------- |  | -----------------------------------------
|Location                        |  | Owned or Leased |               | Description
|                                |  |                 |               |            
|West Region                     |  |                 |               |             |  |                                          
|Arizona  Phoenix               |  |                 | Owned         |             |  | Customer Service, Marketing, Fuel, Repair
|California  Fontana            |  |                 | Owned/ Leased |             |  | Customer Service, Marketing, Fuel, Repair
|California  Lathrop (Bay Area) |  |                 | Owned         |             |  | Customer Service, Marketing, Fuel, Repair
|California  Willows            |  |                 | Owned         |             |  | Fuel, Repair                             
|California  Wilmington         |  |                 | Owned         |             |  | Customer Service, Fuel, Repair           
|Colorado  Denver               |  |                 | Owned         |             |  | Customer Service, Marketing, Fuel, Repair
|Colorado  Pueblo               |  |                 | Owned         |             |  | Customer Service, Marketing, Fuel, Repair
|Idaho  Lewiston                |  |                 | Owned/ Leased |             |  | Customer Service, Marketing, Fuel, Repair
|New Mexico  Albuquerque        |  |                 | Leased        |             |  | Fuel, Repair                             
|Nevada  Sparks                 |  |                 | Owned/ Leased |             |  | Customer Service, Marketing, Fuel, Repair
|Oklahoma  Oklahoma City        |  |                 | Owned         |             |  | Fuel, Repair                             
|Oregon  Troutdale              |  |                 | Owned         |             |  | Customer Service, Marketing, Fuel, Repair
|Texas  Corsicana               |  |                 | Owned         |             |  | Customer Service, Marketing, Fuel, Repair
|Texas  El Paso                 |  |                 | Owned/ Leased |             |  | Customer Service, Marketing, Fuel, Repair
|Texas  Irving                  |  |                 | Leased        |             |  | Customer Service, Marketing, Fuel, Repair
|Texas  Laredo                  |  |                 | Owned         |             |  | Customer Service, Marketing, Fuel, Repair
|Utah  Salt Lake City           |  |                 | Owned         |             |  | Customer Service, Marketing, Fuel, Repair
|Washington  Sumner             |  |                 | Leased        |             |  | Marketing, Fuel, Repair                  
|Midwest Region                  |  |                 |               |             |  |                                          
|Illinois  Manteno              |  |                 | Owned         |             |  | Customer Service, Fuel, Repair           
|Indiana  Gary                  |  |                 | Owned         |             |  | Customer Service, Fuel, Repair           
|Indiana  Shoals                |  |                 | Owned         |             |  | Customer Service, Fuel, Repair           
|Kansas  Edwardsville           |  |                 | Owned         |             |  | Customer Service, Marketing, Fuel        
|Michigan  New Boston           |  |                 | Owned         |             |  | Customer Service, Fuel, Repair           
|Minnesota  Invergrove Heights  |  |                 | Leased        |             |  | Marketing, Repair                        
|Ohio  Columbus                 |  |                 | Owned         |             |  | Customer Service, Fuel, Repair           

9



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|                              |  |                 |       |             |  |                                          
|----------------------------- |  | --------------- | ----- | ----------- |  | -----------------------------------------
|Location                      |  | Owned or Leased |       | Description
|                              |  |                 |       |            
|Tennessee  Memphis           |  |                 | Owned |             |  | Customer Service, Marketing, Fuel, Repair
|Wisconsin  Town of Menasha   |  |                 | Owned |             |  | Fuel, Repair                             
|East Region                   |  |                 |       |             |  |                                          
|Florida  Ocala               |  |                 | Owned |             |  | Customer Service, Fuel, Repair           
|Georgia  Decatur             |  |                 | Owned |             |  | Customer Service, Marketing, Fuel, Repair
|North Carolina  Eden         |  |                 | Owned |             |  | Customer Service, Fuel, Repair           
|New Jersey  South Plainfield |  |                 | Owned |             |  | Repair                                   
|New York  Syracuse           |  |                 | Owned |             |  | Fuel, Repair                             
|Pennsylvania  Jonestown      |  |                 | Owned |             |  | Fuel, Repair                             
|South Carolina  Greer        |  |                 | Owned |             |  | Customer Service, Marketing, Fuel, Repair
|Virginia  Richmond           |  |                 | Owned |             |  | Fuel, Repair                             
|West Virginia  Martinsburg   |  |                 | Owned |             |  | Fuel, Repair                             

As of December 31, 2002, the Companys
aggregate monthly rent for all leased properties was $347,000.




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, 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 on 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
2002.




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 sales prices of the common stock reported by Nasdaq
for the periods shown.

|               |  |              |       |     |  |   |       | 
|-------------- |  | ------------ | ----- | --- |  | - | ----- | 
|               |  |             
|               |  | Common Stock
|               |  |             
|               |  | High         |       | Low
|               |  |              |       |    
|2002           |  |              |       |     |  |   |       | 
|First Quarter  |  | $            | 25.58 |     |  | $ | 20.38 | 
|Second Quarter |  |              | 23.48 |     |  |   | 18.11 | 
|Third Quarter  |  |              | 23.90 |     |  |   | 14.94 | 
|Fourth Quarter |  |              | 20.72 |     |  |   | 14.76 | 
|              
|2001           |  |              |       |     |  |   |       | 
|First Quarter  |  | $            | 23.13 |     |  | $ | 13.50 | 
|Second Quarter |  |              | 20.00 |     |  |   | 14.40 | 
|Third Quarter  |  |              | 22.55 |     |  |   | 15.00 | 
|Fourth Quarter |  |              | 24.34 |     |  |   | 16.33 | 

10



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On March 21, 2003, the last reported sales
price of the Companys common stock was $18.00 per share.
At that date, the number of stockholder accounts of record of
the Companys common stock was 4,394. The Company estimates
there are approximately 6,200 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 our
revolving credit facility 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.

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 34% 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, including, 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, fluctuations in interest rates and fuel
prices, increases in insurance premiums affecting the trucking
industry generally, the depressed market for used tractors
affecting the trucking industry generally, analysts
reports or general trends in the industry, as well as other
factors unrelated to the Companys operating results.




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, 2002 is derived
from the Companys Consolidated Financial Statements. The
selected consolidated financial data has been restated to
include the financial position, results of operations, and cash
flows of M.S. Carriers (See Pooling of Interests note to the
financial statements). The Consolidated Financial Statements as
of December 31, 2002 and 2001, and for each of the years in
the three-year period ended December 31, 2002 and the
independent auditors reports thereon, are included in
Item 8 of this Form 10-K. This data should be read in
conjunction with the Consolidated Financial Statements and Notes
thereto included in Item 8 of this Form 10-K

|                                              |  |                                                                      |           |      |  |      |           |      |  |         |           |  |  |   |           |  |  |   |           | 
|--------------------------------------------- |  | -------------------------------------------------------------------- | --------- | ---- |  | ---- | --------- | ---- |  | ------- | --------- |  |  | - | --------- |  |  | - | --------- | 
|                                              |  |                                                                     
|                                              |  | Years Ended December 31,                                            
|                                              |  |                                                                     
|                                              |  | 2002                                                                 |           | 2001 |  | 2000 |           | 1999 |  | 1998(1)
|                                              |  |                                                                      |           |      |  |      |           |      |  |        
|                                              |  |                                                                     
|                                              |  | (Dollar Amounts in Thousands, Except per Share and per Mile Amounts)
|Consolidated Statements of Earnings
    Data: |  |                                                                      |           |      |  |      |           |      |  |         |           |  |  |   |           |  |  |   |           | 
|Operating revenue                             |  | $                                                                    | 2,101,472 |      |  | $    | 2,112,221 |      |  | $       | 1,973,839 |  |  | $ | 1,688,954 |  |  | $ | 1,404,147 | 
|Earnings before income taxes                  |  | $                                                                    | 96,108    |      |  | $    | 45,369    |      |  | $       | 110,014   |  |  | $ | 155,023   |  |  | $ | 133,098   | 
|Net earnings                                  |  | $                                                                    | 59,588    |      |  | $    | 27,221    |      |  | $       | 68,943    |  |  | $ | 97,418    |  |  | $ | 80,779    | 
|Diluted earnings per share                    |  | $                                                                    | .69       |      |  | $    | .32       |      |  | $       | .82       |  |  | $ | 1.12      |  |  | $ | .93       | 

11



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|                                                      |                  |                                                                      |           |        |  |      |           |        |  |         |           |        |  |   |           |        |  |   |           |       | 
|----------------------------------------------------- | ---------------- | -------------------------------------------------------------------- | --------- | ------ |  | ---- | --------- | ------ |  | ------- | --------- | ------ |  | - | --------- | ------ |  | - | --------- | ----- | 
|                                                      |                  |                                                                     
|                                                      |                  | Years Ended December 31,                                            
|                                                      |                  |                                                                     
|                                                      |                  | 2002                                                                 |           | 2001   |  | 2000 |           | 1999   |  | 1998(1)
|                                                      |                  |                                                                      |           |        |  |      |           |        |  |        
|                                                      |                  |                                                                     
|                                                      |                  | (Dollar Amounts in Thousands, Except per Share and per Mile Amounts)
|Consolidated Balance Sheet Data (at end of
    year): |                  |                                                                      |           |        |  |      |           |        |  |         |           |        |  |   |           |        |  |   |           |      
|Working capital (deficit)                             |                  | $                                                                    | (69,599   | )      |  | $    | (24,299   | )      |  | $       | 29,426    |        |  | $ | 88,962    |        |  | $ | 68,488    |      
|Total assets                                          |                  | $                                                                    | 1,654,482 |        |  | $    | 1,556,096 |        |  | $       | 1,573,463 |        |  | $ | 1,390,107 |        |  | $ | 1,124,292 |      
|Long-term obligations, less current portion           |                  | $                                                                    | 183,470   |        |  | $    | 223,486   |        |  | $       | 377,056   |        |  | $ | 370,558   |        |  | $ | 289,803   |      
|Stockholders equity                                  |                  | $                                                                    | 765,778   |        |  | $    | 735,203   |        |  | $       | 654,879   |        |  | $ | 622,509   |        |  | $ | 524,206   |      
|Operating Statistics (at end of
    year):            |                  |                                                                      |           |        |  |      |           |        |  |         |           |        |  |   |           |        |  |   |           |      
|Operating ratio                                       |                  |                                                                      | 94.4      | %      |  |      | 95.9      | %      |  |         | 92.8      | %      |  |   | 89.7      | %      |  |   | 89.6      | %    
|Pre-tax margin(2)                                     |                  |                                                                      | 4.6       | %      |  |      | 2.1       | %      |  |         | 5.6       | %      |  |   | 9.2       | %      |  |   | 9.5       | %    
|Average line haul revenue per loaded mile(3)          |                  | $                                                                    | 1.41      |        |  | $    | 1.41      |        |  | $       | 1.39      |        |  | $ | 1.35      |        |  | $ | 1.34      |      
|Deadhead percentage                                   |                  |                                                                      | 14.1      | %      |  |      | 15.1      | %      |  |         | 14.1      | %      |  |   | 13.3      | %      |  |   | 13.0      | %    
|Average length of haul (in miles)                     |                  |                                                                      | 552       |        |  |      | 571       |        |  |         | 582       |        |  |   | 616       |        |  |   | 631       |      
|Total tractors at end of period:                      |                  |                                                                      |           |        |  |      |           |        |  |         |           |        |  |   |           |        |  |   |           |      
|                                                      | Company-operated |                                                                      |           | 12,939 |  |      |           | 12,748 |  |         |           | 11,460 |  |   |           | 10,223 |  |   |           | 8,323 | 
|                                                      | Owner-operator   |                                                                      |           | 3,152  |  |      |           | 3,048  |  |         |           | 3,383  |  |   |           | 3,053  |  |   |           | 2,228 | 
|Trailers at end of period                             |                  |                                                                      | 48,233    |        |  |      | 45,729    |        |  |         | 43,411    |        |  |   | 38,088    |        |  |   | 30,512    |      



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes the results of operations from the
    acquisition of Challenger Motor Freight beginning March, 1998
    and Interstate Trucking Corporation of America beginning
    November, 1998.                                                                                                                                                                                                                                                                                                                                               
|   
|(2) | 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.
|   
|(3) | Excludes fuel surcharge revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             






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

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

Pooling of Interests

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

In addition, the results for 2001 include:



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

12



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| |   |                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------
| |  | a $4.0 million adjustment for the change in
    market value of the interest rate derivative agreements of
    M.S. Carriers.

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

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

Overview

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

|          |                |                    |        |        |        |      |        |        |        |  |        |        |        | 
|--------- | -------------- | ------------------ | ------ | ------ | ------ | ---- | ------ | ------ | ------ |  | ------ | ------ | ------ | 
|          |                |                   
|          |                | As of December 31,
|          |                |                   
|          |                | 2002               |        | 2001   |        | 2000
|          |                |                    |        |        |        |     
|Tractors: |                |                    |        |        |        |      |        |        |        |  |        |       
|          | Company        |                    |        |        |        |      |        |        |        |  |        |        |       
|          |                | Owned              |        |        | 7,350  |      |        |        | 6,685  |  |        |        | 7,003  | 
|          |                | Leased             |        |        | 5,589  |      |        |        | 6,063  |  |        |        | 4,457  | 
|          |                |                    |        |        |        |      |        |        |        |  |        |       
|          |                | Total company      |        |        | 12,939 |      |        |        | 12,748 |  |        |        | 11,460 | 
|          |                |                    |        |        |        |      |        |        |        |  |        |       
|          | Owner-operator |                    |        | 3,152  |        |      |        | 3,048  |        |  |        | 3,383  |       
|          |                |                    |        |        |        |      |        |        |        |  |        |       
|          | Total          |                    |        | 16,091 |        |      |        | 15,796 |        |  |        | 14,843 |       
|          |                |                    |        |        |        |      |        |        |        |  |        |       
|Trailers  |                |                    | 48,233 |        |        |      | 45,729 |        |        |  | 43,411 |       
|          |                |                    |        |        |        |      |        |        |        |  |        |       

The Company tractors are either owned by the
Company or financed under leases. Our fleet has operated on a
three-year cycle for many years. Generally, we traded a tractor
for a new tractor every three years. We are currently evaluating
extending this three-year cycle.

The owner-operators own their tractor and are
responsible for operating costs. The owner-operators operate
under the authority of the Company and are generally compensated
based upon miles.

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

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

We are also compensated, in some instances, for
accessorial charges such as loading and unloading.

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We view our operating cost structure as
approximately one-half variable and one-half fixed. Therefore,
an increase in revenue will generally improve our operating
margin percentage.

Critical Accounting Policies



| |                
| | ---------------
| | Claims Accruals

We are self-insured for some portion of our
liability, property damage and cargo damage risk. This
self-insurance results from buying insurance coverage with
deductible amounts. Each reporting period we accrue the cost of
the uninsured portion of pending claims. These accruals are
estimated based on our evaluation of the nature and severity of
individual claims and an estimate of future claims development
based upon historical claims development trends. Insurance and
claims expense will vary as a percentage of operating revenue
from period to period based on the frequency and severity of
claims incurred in a given period as well as changes in claims
development trends.

We have discussed the development and selection
of this accounting estimate with the audit committee of the
Board of Directors and the audit committee has reviewed the
Companys disclosure relating to it in this Annual Report
on Form 10-K.



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

Operating revenues and related direct costs are
recognized as of the date the freight is picked up for shipment.
M.S. Carriers (see Pooling of Interests note) recognized
revenue on the date freight was delivered. Beginning
January 1, 2002, M.S. Carriers was operationally
combined with the Company and recognizes revenue on the date
freight is picked up for shipment. Our revenue recognition
policy is consistent with method two under EITF 91-9. We do
not believe the financial results derived from the application
of this method differ materially from the results that would be
derived under method three discussed within EITF 91-9 due
to the Companys relatively short length of haul.

Results of Operations for 2002, 2001 and
2000

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

|                    |                                       |                          |     |      |      |      |     |      |      |  |     |      |      | 
|------------------- | ------------------------------------- | ------------------------ | --- | ---- | ---- | ---- | --- | ---- | ---- |  | --- | ---- | ---- | 
|                    |                                       | 2002                     |     | 2001 |      | 2000
|                    |                                       |                          |     |      |      |     
|Operating revenue   |                                       |                          | 100 | %    |      |      | 100 | %    |      |  | 100 | %   
|Operating expenses: |                                       |                          |     |      |      |      |     |      |      |  |     |     
|                    | Salaries, wages and employee benefits |                          |     | 36.9 |      |      |     | 37.0 |      |  |     | 34.2 |     
|                    | Operating supplies and expenses       |                          |     | 9.2  |      |      |     | 8.8  |      |  |     | 8.2  |     
|                    | Fuel                                  |                          |     | 12.4 |      |      |     | 13.0 |      |  |     | 13.4 |     
|                    | Purchased transportation              |                          |     | 17.1 |      |      |     | 17.3 |      |  |     | 20.2 |     
|                    | Rental expense                        |                          |     | 4.1  |      |      |     | 4.7  |      |  |     | 3.6  |     
|                    | Insurance and claims                  |                          |     | 4.1  |      |      |     | 4.5  |      |  |     | 2.7  |     
|                    | Depreciation and amortization         |                          |     | 7.0  |      |      |     | 6.8  |      |  |     | 6.8  |     
|                    | Communications and utilities          |                          |     | 1.3  |      |      |     | 1.4  |      |  |     | 1.3  |     
|                    | Operating taxes and licenses          |                          |     | 2.3  |      |      |     | 2.4  |      |  |     | 2.4  |     
|                    |                                       |                          |     |      |      |      |     |      |      |  |     |     
|                    |                                       | Total operating expenses |     |      | 94.4 |      |     |      | 95.9 |  |     |      | 92.8 | 
|                    |                                       |                          |     |      |      |      |     |      |      |  |     |     

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|                             |  |      |     |      |  |      |     |   |  |  |     |  
|---------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                             |  | 2002 |     | 2001 |  | 2000
|                             |  |      |     |      |  |     
|Operating income             |  |      | 5.6 |      |  |      | 4.1 |   |  |  | 7.2 |  
|Net interest expense         |  |      | .9  |      |  |      | 1.5 |   |  |  | 1.7 |  
|Other (income) expense, net  |  |      | .1  |      |  |      | .5  |   |  |  | (.1 | )
|                             |  |      |     |      |  |      |     |   |  |  |     |  
|Earnings before income taxes |  |      | 4.6 |      |  |      | 2.1 |   |  |  | 5.6 |  
|Income taxes                 |  |      | 1.8 |      |  |      | .8  |   |  |  | 2.1 |  
|                             |  |      |     |      |  |      |     |   |  |  |     |  
|Net earnings                 |  |      | 2.8 | %    |  |      | 1.3 | % |  |  | 3.5 | %
|                             |  |      |     |      |  |      |     |   |  |  |     |  

Our net earnings declined from $68.9 million
in 2000 to $27.2 million in 2001. While our operating
revenue increased $138 million, the incremental profit from
the increased volume was more than offset by the merger related
adjustments, increased deadhead, rising insurance costs and
increased operating supplies as we standardized our fleets.

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

Revenue

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

|                           |  |      |           |      |  |      |           |   |  |   |           |  
|-------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | -
|                           |  | 2002 |           | 2001 |  | 2000
|                           |  |      |           |      |  |     
|Trucking revenue           |  | $    | 1,976,411 |      |  | $    | 1,992,907 |   |  | $ | 1,808,744 |  
|Fuel surcharge revenue     |  |      | 37,817    |      |  |      | 59,449    |   |  |   | 65,691    |  
|Other revenue              |  |      | 87,244    |      |  |      | 59,865    |   |  |   | 99,404    |  
|                           |  |      |           |      |  |      |           |   |  |   |           |  
|Operating revenue          |  | $    | 2,101,472 |      |  | $    | 2,112,221 |   |  | $ | 1,973,839 |  
|                           |  |      |           |      |  |      |           |   |  |   |           |  
|Miles per tractor per week |  |      | 2,049     |      |  |      | 2,084     |   |  |   | 2,090     |  
|Revenue per loaded mile    |  | $    | 1.4141    |      |  | $    | 1.4144    |   |  | $ | 1.3867    |  
|Deadhead percentage        |  |      | 14.14     | %    |  |      | 15.12     | % |  |   | 14.08     | %

Our trucking revenue decreased by approximately
1.0% in 2002 compared to 2001 and increased 10.2% in 2001
compared to 2000. Comparing 2002 to 2001, the improvement in
deadhead percentage and revenue per loaded mile was offset by a
decrease in utilization. We began 2002 with approximately
650 trucks without drivers. The number of trucks without
drivers decreased throughout 2002 and we ended the year with
approximately 150 trucks without drivers. Comparing 2001 to
2000, the increase in deadhead percentage and slight decrease in
utilization was more than offset by our increase in revenue per
loaded mile.

Other revenue increased in 2002 compared to 2001
primarily due to an increase in freight moved for our customers
on rail and Mexican carriers. In July 2000, we transferred our
logistics business and associated intangible assets to
Transplace, an Internet-based logistics company we commonly own
with four other truckload carriers. Therefore, 2000 included
$43 million of other revenue that did not recur in 2002 or
2001. We own approximately 29% of Transplace and account for our
investment in Transplace using the equity method of accounting.

Operating Expenses

Our most significant operating costs are
salaries, wages and employee benefits, fuel and purchased
transportation. Our salaries, wages and employee benefits were
36.9%, 37.0% and 34.2% of operating revenue in 2002, 2001 and
2000, respectively. The percentage decreased slightly in 2002 as
we experienced some headcount attrition that was offset by an
increase in workers compensation costs. Our deductible
amount for workers compensation rose from zero to $350,000
per incident in 2002. Beginning in 2003, this deductible

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##### Table of Contents



amount for workers compensation will rise
from $350,000 to $500,000 per incident. This percentage rose in
2001 as the mix in the company owned portion of our total fleet
increased as the owner operator portion decreased. This increase
is also due to the impact of reduced utilization and an increase
in dedicated business with fixed pay driver wages.


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

Fuel was 12.4%, 13.0% and 13.4% of operating
revenue in 2002, 2001 and 2000, respectively. This percentage is
primarily affected by fuel prices. Our average fuel cost per
gallon was $1.21, $1.28 and $1.30, in 2002, 2001 and 2000,
respectively.

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

Purchased transportation was 17.1%, 17.3% and
20.2% of operating revenue in 2002, 2001 and 2000, respectively.
This percentage has dropped as our owner operator fleet has
decreased from 3,383 at December 31, 2000 to 3,152 at
December 31, 2002.

Insurance and claims was 4.1%, 4.5% and 2.7% of
operating revenue in 2002, 2001 and 2000, respectively. The year
ended December 31, 2001 includes a $7 million increase
to M.S. Carriers insurance and claims reserves and
$4.1 million of increased insurance premiums, with the same
coverage, over the prior year. We experienced an increase in
auto liability claims and cargo theft claims in 2001 when
compared to 2000.

As discussed under Critical Accounting Policies,
we are self-insured for some portion of our liability, property
damage and cargo damage risk. We buy insurance coverage with
deductible amounts. Beginning in 2003, the deductible amount for
general liability will rise from $250,000 to $1,000,000 per
incident. This expense will vary as a percentage of operating
revenue from period to period based on the frequency and
severity of claims incurred in a given period as well as changes
in claims development trends.

As we discussed in the notes to our financial
statements, we entered into a settlement agreement with an
insurance company. Pursuant to this settlement, the insurance
company agreed to provide certain insurance coverage, at no cost
to the Company, through December 2004, in exchange our releasing
all claims that were the subject of the litigation. We will
recognize this settlement amount as a reduction of insurance
expense as the insurance coverage is provided during the period
from July 1, 2002 through December 31, 2004. In
addition, we deferred the $21.1 million of legal expenses,
which were paid pursuant to a contingent fee arrangement based
upon our estimate of the value of the insurance provided of
between $65 million and $74 million. These legal
expenses are being amortized on a straight-line basis over the
thirty-month period beginning July 1, 2002. In the event
that we do not receive the future insurance coverage due to the
liquidation, rehabilitation, bankruptcy or other similar
insolvency of the insurers, we will receive a reimbursement of
our legal expenses on a declining basis ranging from
$15.8 million through December 15, 2002 to
$3.9 million through July 1, 2004.

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

|                                |  |                |       |      |  |      |       |  |  |   |       | 
|------------------------------- |  | -------------- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|                                |  | 2002           |       | 2001 |  | 2000
|                                |  |                |       |      |  |     
|                                |  |               
|                                |  | (In thousands)
|Gain on sale of leased tractors |  | $              | 1,817 |      |  | $    | 338   |  |  | $ | 1,100 | 
|Gain on sale of owned tractors  |  | $              | 4,356 |      |  | $    | 1,600 |  |  | $ | 8,900 | 

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Other Expenses

Our largest pre-tax non-operating expense is
interest. Our debt balance combining the operating line of
credit, accounts receivable securitization, capital leases and
other debt was $402 million, $401 million and
$560 million at December 31, 2002, 2001 and 2000,
respectively.

As shown below, our interest expense, net of the
impact of the derivative agreements decreased in 2001 as we
reduced debt by $159 million. Our interest expense further
decreased in 2002 as we shifted to lower cost borrowings and
interest rates continued to decline.

|                                               |  |                |        |      |  |      |        |  |  |   |        | 
|---------------------------------------------- |  | -------------- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                               |  | 2002           |        | 2001 |  | 2000
|                                               |  |                |        |      |  |     
|                                               |  |               
|                                               |  | (In thousands)
|Interest expense                               |  | $              | 21,979 |      |  | $    | 33,393 |  |  | $ | 34,117 | 
|Less: derivative agreements                    |  |                | 5,897  |      |  |      | 4,050  |  |  |   |        | 
|                                               |  |                |        |      |  |      |        |  |  |   |        | 
|Interest expense, net of derivative agreements |  | $              | 16,082 |      |  | $    | 29,343 |  |  | $ | 34,117 | 
|                                               |  |                |        |      |  |      |        |  |  |   |        | 

Included in other expense in 2002 was the
Companys share of a nonrecurring charge within the
earnings of our equity investment in Transplace, which amounted
to $1.3 million. Other expense in 2001 included an
$8.5 million adjustment for the impairment of the 50%
equity investment held by M.S. Carriers in Transportes
EASO, and the equity loss of $3.0 million for Transplace.

Our effective tax rate was 38%, 40% and 37.3% in
2002, 2001 and 2000, respectively. The increase in 2001 was
primarily due to the nondeductible portion ($5.2 million)
of the EASO impairment adjustment.

Liquidity and Capital Resources

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

|                                                        |  |                |          |      |  |      |          |   |  |   |          |  
|------------------------------------------------------- |  | -------------- | -------- | ---- |  | ---- | -------- | - |  | - | -------- | -
|                                                        |  | 2002           |          | 2001 |  | 2000
|                                                        |  |                |          |      |  |     
|                                                        |  |               
|                                                        |  | (In thousands)
|Net cash provided by operating activities               |  | $              | 266,716  |      |  | $    | 262,937  |   |  | $ | 172,029  |  
|Net cash used in investing activities                   |  | $              | (235,547 | )    |  | $    | (155,154 | ) |  | $ | (204,051 | )
|Net cash (used in) provided by financing
    activities |  | $              | (37,930  | )    |  | $    | (113,270 | ) |  | $ | 41,449   |  

Although net earnings increased substantially,
our cash provided by operating activities increased slightly in
2002 compared to 2001 primarily because our accounts receivable
increased by a comparable amount. Our cash provided by operating
activities increased in 2001 compared to 2000 despite lower net
earnings. This was a result of an increase in accounts payable,
accrued liabilities and claims accruals and a decrease in
accounts receivable.

Our cash used in investing activities is mainly
driven by our capital expenditures, net of sales proceeds. Our
capital expenditures, net of cash sales proceeds were
$219 million, $165 million and $183 million in
2002, 2001 and 2000, respectively. In addition, we made equity
investments of $21 million in 2000 and loans to investment
entities of $16 million in 2002.

Regarding our financing activities, in 2002 we
repurchased $52 million of our common stock and received
$14 million from issuance of stock to our employees under
the stock option and stock purchase plans. In 2001, we repaid a
total of $161 million of long-term debt, capital leases and
borrowings under revolving credit agreement and received
$20 million from our public stock offering and
$27 million from issuance of stock to our employees. In
2000, we increased our borrowings $80 million and
repurchased $44 million of our common stock while receiving
$6 million from issuance of stock to our employees.

As of December 31, 2002 and 2001 we had a
working capital deficit of $69,599 and $24,299, respectively,
and as of December 31, 2000, our working capital was
$29,426. As discussed in the notes to the financial statements,
the accounts receivable securitization is reflected as a current
liability because the committed term, subject to annual
renewals, is 364 days. The funds received under the
accounts receivable securitization are generally used for
capital expenditures or repurchases of our common stock.
Therefore, our working capital

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##### Table of Contents



will be reduced by the amount of the proceeds
received under the accounts receivable securitization but the
increase in fixed assets or treasury stock is not included in
working capital.


As of December 31, 2002, we have
$136.4 million of borrowings and $65.9 million of
letters of credit outstanding on our $255 million line of
credit, leaving $52.7 million available. Interest on
outstanding borrowings is based upon one of two options, which
we select at the time of borrowing: the banks prime rate
or the London Interbank Offered Rate (LIBOR) plus
applicable margins ranging from 62.5 to 137.5 basis points,
as defined in the Credit Agreement (currently 70 basis
points). The unused portion of the line of credit is subject to
a commitment fee ranging from 17.5 to 25 basis points
(currently 20 basis points). The Credit Agreement requires
us to meet certain covenants with respect to leverage and fixed
charge coverage ratios and tangible net worth. The Credit
Agreement also requires us to maintain unencumbered assets of
not less than 120% of indebtedness (as defined).

Our accounts receivable securitization allows us
to sell up to $200 million of our eligible trade accounts
receivable to a financial institution. As of December 31,
2002, we had received sales proceeds of $169 million.

As of December 31, 2002, we had commitments
outstanding to acquire replacement and additional revenue
equipment for approximately $27 million. We have the option
to cancel such commitments upon 60 days notice. We believe
it will be able to support these acquisitions of revenue
equipment through debt and lease financings and cash flows
generated by operating activities.

During the year ended December 31, 2002, we
incurred approximately $39 million of non-revenue equipment
capital expenditures. These expenditures were primarily for
facilities and equipment.

We anticipate that we will expend approximately
$40 million in 2003 for various facilities upgrades and
acquisition and development of terminal facilities. Factors such
as costs and opportunities for future terminal expansions may
change the amount of such expenditures.

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

Off-Balance Sheet Arrangements

As discussed in the Commitments note to the
financial statements, we have guaranteed certain financing
arrangements of entities in which we hold equity interests.
These guarantees were issued to assist these entities when
entering into financing arrangements. Furthermore, the Company
guarantees certain residual values under its operating lease
agreements for revenue equipment. At the termination of these
operating leases, the Company would be responsible for the
excess of the guarantee amount above the fair market value, if
any. The maximum potential amount of future payments the Company
would be required to make under these guarantees is
$149 million. The Company utilizes operating leases as an
additional financing source.

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##### Table of Contents



Contractual Obligations

The tables below summarize our contractual
obligations as of December 31, 2002.

|                              |  |                        |         |           |  |           |         |           |  |         |         |  |  |   |        |  |  |   |    | 
|----------------------------- |  | ---------------------- | ------- | --------- |  | --------- | ------- | --------- |  | ------- | ------- |  |  | - | ------ |  |  | - | -- | 
|                              |  |                       
|                              |  | Payments due by period
|                              |  |                       
|                              |  |                        |         | Less than |  |           |         | More than
|                              |  | Total                  |         | 1 year    |  | 1-3 years |         | 4-5 years |  | 5 years
|                              |  |                        |         |           |  |           |         |           |  |        
|Long-Term Debt(1)             |  | $                      | 149,176 |           |  | $         | 3,389   |           |  | $       | 142,787 |  |  | $ | 3,000  |  |  | $ |    | 
|Capital Lease Obligations     |  |                        | 83,515  |           |  |           | 45,787  |           |  |         | 35,953  |  |  |   | 1,775  |  |  |   |    | 
|Operating Leases(2)           |  |                        | 134,533 |           |  |           | 64,196  |           |  |         | 57,204  |  |  |   | 13,070 |  |  |   | 63 | 
|Purchase Obligations          |  |                        |         |           |  |           |         |           |  |         |         |  |  |   |        |  |  |   |    | 
|Other Long-Term Obligations   |  |                        |         |           |  |           |         |           |  |         |         |  |  |   |        |  |  |   |    | 
|                              |  |                        |         |           |  |           |         |           |  |         |         |  |  |   |        |  |  |   |    | 
|Total Contractual Obligations |  | $                      | 367,224 |           |  | $         | 113,372 |           |  | $       | 235,944 |  |  | $ | 17,845 |  |  | $ | 63 | 
|                              |  |                        |         |           |  |           |         |           |  |         |         |  |  |   |        |  |  |   |    | 



---



|    |                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | We expect to refinance the $136.4 million
    line of credit included in Long-Term Debt upon maturity.                                                                                                 
|   
|(2) | Operating leases include an interest element
    within the commitment amount as opposed to the Long-Term Debt
    and Capital Lease Obligations amounts, which do not include an
    interest element.

Inflation

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

Seasonality

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

Accounting Standards Not Yet Adopted by the
Company

The Financial Accounting Standards Board has
issued Statements of Financial Accounting Standard
(SFAS) and Interpretations (FIN) for
which the required implementation dates have not yet become
effective. Those standards that may materially impact the
Company are discussed below.

In December 2002, SFAS No. 148,
Accounting for Stock-Based Compensation 
Transition and Disclosure, was issued. This standard
provides guidance on the transition, if a company so elects,
from the intrinsic value method of accounting for stock-based
employee compensation under Accounting Principles Board Opinion
No. 25, which the Company currently uses, to the fair value
method of accounting under SFAS No. 123. In addition, this
standard now requires certain disclosures in our interim
financial statements that previously were only required in our
Annual Report on Form 10K. The standard is effective for
the Company beginning January 1, 2003. The Company has not
yet made a decision on the adoption of the fair value method of
accounting for stock options under SFAS No. 123.

In November 2002, FIN 45,
Guarantors Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of
Others was issued. This standard requires a guarantor
recognize, at the inception of a guarantee, a liability for the
fair value of the obligation undertaken in issuing the
guarantee. The standard also elaborates on the disclosures to be
made by a guarantor in its financial statements about its
obligations under certain guarantees that it has issued. The
recognition provisions of this standard apply to guarantees
issued or modified after December 31, 2002. The disclosure
provisions of this standard apply to our financial statements
for the year ended December 31, 2002. Under this new
standard, the Company will be required to recognize a liability
for the guarantee of residual values on any new operating

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##### Table of Contents



leases or any other guarantees it modifies or
issues. Presently, the Company is not able to estimate the
impact on its financial statements of the implementation of the
recognition provisions of this standard.


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,
manufacturing 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, and one may 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.

Acquisitions.The
growth of the Company has been 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, 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, Senior Executive Vice
President, Mr. Gary Enzor, Chief Financial Officer,
Mr. Rodney K. Sartor, Executive Vice President,
Mr. Patrick J. Farley, Executive Vice President,
Mr. Kevin H. Jensen, Executive Vice President,
Mr. Michael S. Starnes, President of M.S. Carriers,
and Mr. James W. Welch, Senior Vice President of M.S.

20



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##### Table of Contents



Carriers. Mr. Moyes has other significant
business interests to which he devotes his time and efforts,
including serving as Chairman of Central Freight Lines, Inc., a
regional less-than-truckload carrier. Mr. Moyes is also the
largest stockholder of Central Freight Lines. Although the
Company believes it has an experienced and talented management
group, the loss of the services of Mr. Moyes,
Mr. Riley, Mr. Enzor, Mr. Sartor,
Mr. Farley, 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. Riley, Enzor, Sartor, Farley, or Jensen. The
Company does not have an employment agreement with but does
maintain key man life insurance on Mr. Moyes. The Company
has employment agreements with Messrs. Starnes and Welch,
which were entered into in connection with the merger with
M.S. Carriers, but does not maintain key man life insurance
on any of them. The employment agreement with Mr. Starnes
expires June 29, 2004, and the employment agreement with
Mr. Welch expires on June 29, 2006.


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. Swift may
also become subject to new or more comprehensive or restrictive
regulations relating to fuel emissions, ergonomics and
limitations on hours of service. The increased cost of complying
with such regulations could have a material adverse effect on
Swifts business and operating results.

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.

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

Claims Exposure;
Insurance.The Company currently
self-insures for liability resulting from cargo loss, personal
injury, workers compensation, and property damage, 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 2002, the Companys top 25, 10 and 5 customers
accounted for 50%, 34% and 25% 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.






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

The Company has interest rate exposure arising
from the Companys line of credit ($136 million),
capital lease obligations ($42 million) of and accounts
receivable securitization ($169 million), all of which have
variable interest rates. These variable interest rates are
impacted by changes in short-term interest rates. The Company
manages interest rate exposure through its mix of variable rate
debt, fixed rate lease financing and $70 million notional
amount of interest rate swaps (weighted average rate of 5.88%).
The fair value of the Companys long-term debt approximates
carrying values. Assuming the current level of borrowings, a
hypothetical one-percentage point increase in interest rates
would increase the Companys interest expense by
$2.8 million.

21



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##### Table of Contents








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

Consolidated Financial Statements of the Company
as of December 31, 2002 and 2001 for each of the years in
the three-year period ended December 31, 2002, together
with related notes and the reports of KPMG LLP and Ernst and
Young LLP, independent certified public accountants, are set
forth on the following pages. Other required financial
information set forth herein is more fully described in
Item 16 of this Form 10-K.

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##### Table of Contents



INDEPENDENT AUDITORS REPORT

The Board of Directors 
 Swift Transportation Co., Inc.:

We have audited the accompanying consolidated
balance sheets of Swift Transportation Co., Inc. and
subsidiaries as of December 31, 2002 and 2001, 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, 2002. 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.

The consolidated financial statements of Swift
Transportation Co., Inc. for the year ended December 31,
2000, have been restated to reflect the pooling-of-interests
transaction with MS Carriers, Inc. as described in Note 2
to the consolidated financial statements. We did not audit the
2000 consolidated financial statements of MS Carriers, Inc.,
which statements reflect total revenues constituting
36 percent of the consolidated total. Those statements were
audited by other auditors whose report has been furnished to us,
and our opinion, insofar as it relates to the amounts included
for MS Carriers, Inc. for the year ended December 31,
2000, is based solely on the report of the other auditors.

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

In our opinion, based on our audits and the
report of the other auditors, 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, 2002 and 2001, and
the results of their operations and their cash flows for each of
the years in the three-year period ended December 31, 2002,
in conformity with accounting principles generally accepted in
the United States of America.

As discussed in Note 13 to the consolidated
financial statements, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 133,
Accounting for Derivative Instruments and Hedging
Activities, effective January 1, 2001.

As discussed in Note 1 to the consolidated
financial statements, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets, effective
January 1, 2002.



| |                                          
| | -----------------------------------------
| | KPMG LLP                                 
|
| | Phoenix, Arizona                         
| | February 7, 2003, except as to Note 27,  
| | as to which the date is February 21, 2003

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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |           |           | 
|----------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ---------------------------- | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|                                                                                                                                                      |                                                         |                             
|                                                                                                                                                      |                                                         | December 31,                
|                                                                                                                                                      |                                                         |                             
|                                                                                                                                                      |                                                         | 2002                         |           | 2001     
|                                                                                                                                                      |                                                         |                              |           |          
|                                                                                                                                                      |                                                         |                             
|                                                                                                                                                      |                                                         | (In thousands,              
|                                                                                                                                                      |                                                         | except share data)          
|ASSETS                                                                                                                                               
|Current assets:                                                                                                                                       |                                                         |                              |           |           |           |   |           |          
|                                                                                                                                                      | Cash                                                    |                              | $         | 7,930     |           |   | $         | 14,151    |          
|                                                                                                                                                      | Accounts receivable, net                                |                              |           | 272,545   |           |   |           | 248,725   |          
|                                                                                                                                                      | Equipment sales receivables                             |                              |           | 11,100    |           |   |           | 2,107     |          
|                                                                                                                                                      | Inventories and supplies                                |                              |           | 16,031    |           |   |           | 11,682    |          
|                                                                                                                                                      | Prepaid taxes, licenses and insurance                   |                              |           | 19,021    |           |   |           | 26,881    |          
|                                                                                                                                                      | Assets held for sale                                    |                              |           | 8,274     |           |   |           |           |          
|                                                                                                                                                      | Deferred income taxes                                   |                              |           | 2,262     |           |   |           | 13,932    |          
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|                                                                                                                                                      |                                                         | Total current assets         |           |           | 337,163   |   |           |           | 317,478   | 
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|Property and equipment, at cost:                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|                                                                                                                                                      | Revenue and service equipment                           |                              |           | 1,476,183 |           |   |           | 1,401,646 |          
|                                                                                                                                                      | Land                                                    |                              |           | 47,855    |           |   |           | 42,852    |          
|                                                                                                                                                      | Facilities and improvements                             |                              |           | 213,421   |           |   |           | 197,681   |          
|                                                                                                                                                      | Furniture and office equipment                          |                              |           | 70,315    |           |   |           | 66,319    |          
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|                                                                                                                                                      |                                                         | Total property and equipment |           |           | 1,807,774 |   |           |           | 1,708,498 | 
|Less accumulated depreciation and amortization                                                                                                        |                                                         |                              | 548,937   |           |           |   | 501,853   |          
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|                                                                                                                                                      |                                                         | Net property and equipment   |           |           | 1,258,837 |   |           |           | 1,206,645 | 
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|Investment in Transplace                                                                                                                              |                                                         |                              | 4,282     |           |           |   | 7,517     |          
|Notes receivable from Trans-Mex                                                                                                                       |                                                         |                              | 11,649    |           |           |   | 3,475     |          
|Deferred legal fees                                                                                                                                   |                                                         |                              | 16,892    |           |           |   |           |          
|Other assets                                                                                                                                          |                                                         |                              | 16,759    |           |           |   | 12,081    |          
|Goodwill                                                                                                                                              |                                                         |                              | 8,900     |           |           |   | 8,900     |          
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|                                                                                                                                                      |                                                         | $                            | 1,654,482 |           |           | $ | 1,556,096 |          
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|LIABILITIES AND STOCKHOLDERS
    EQUITY                                                                                                             
|Current liabilities:                                                                                                                                  |                                                         |                              |           |           |           |   |           |          
|                                                                                                                                                      | Accounts payable                                        |                              | $         | 53,192    |           |   | $         | 57,229    |          
|                                                                                                                                                      | Accrued liabilities                                     |                              |           | 52,161    |           |   |           | 58,925    |          
|                                                                                                                                                      | Current portion of claims accruals                      |                              |           | 83,188    |           |   |           | 48,416    |          
|                                                                                                                                                      | Current portion of long-term debt                       |                              |           | 3,389     |           |   |           | 3,546     |          
|                                                                                                                                                      | Current portion of obligations under capital
    leases |                              |           | 45,832    |           |   |           | 57,661    |          
|                                                                                                                                                      | Securitization of accounts receivable                   |                              |           | 169,000   |           |   |           | 116,000   |          
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|                                                                                                                                                      |                                                         | Total current liabilities    |           |           | 406,762   |   |           |           | 341,777   | 
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|Borrowings under revolving credit agreement                                                                                                           |                                                         |                              | 136,400   |           |           |   | 117,000   |          
|Long-term debt, less current portion                                                                                                                  |                                                         |                              | 9,387     |           |           |   | 16,340    |          
|Obligations under capital leases                                                                                                                      |                                                         |                              | 37,683    |           |           |   | 90,146    |          
|Claims accruals, less current portion                                                                                                                 |                                                         |                              | 65,011    |           |           |   | 55,975    |          
|Deferred income taxes                                                                                                                                 |                                                         |                              | 223,514   |           |           |   | 195,605   |          
|Fair value of interest rate swaps                                                                                                                     |                                                         |                              | 9,947     |           |           |   | 4,050     |          
|Stockholders equity:                                                                                                                                 |                                                         |                              |           |           |           |   |           |          
|Preferred stock, par value $.001 per share
    authorized 1,000,000 shares; none issued                                                               |                                                         |                              |           |           |           |   |           |          
|Common stock, par value $.001 per share
    authorized 200,000,000 shares; issued 90,182,273 and 89,049,519
    shares in 2002 and 2001, respectively |                                                         |                              | 90        |           |           |   | 89        |          
|Additional paid-in capital                                                                                                                            |                                                         |                              | 272,099   |           |           |   | 249,410   |          
|Retained earnings                                                                                                                                     |                                                         |                              | 583,480   |           |           |   | 523,892   |          
|Treasury stock, at cost (6,237,077 and 3,157,850
    shares in 2002 and 2001, respectively)                                                           |                                                         |                              | (89,891   | )         |           |   | (37,935   | )        
|Other equity items                                                                                                                                    |                                                         |                              |           |           |           |   | (253      | )        
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|                                                                                                                                                      |                                                         | Total stockholders equity   |           |           | 765,778   |   |           |           | 735,203   | 
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          
|Commitments and contingencies                                                                                                                         |                                                         | $                            | 1,654,482 |           |           | $ | 1,556,096 |          
|                                                                                                                                                      |                                                         |                              |           |           |           |   |           |          

See accompanying notes to consolidated financial
statements.

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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |         |           | 
|-------------------------- | ------------------------------------- | --------------------------------- | --------- | ------- | --------- | ---- | --------- | ------- | --------- | - | --------- | ------- | --------- | 
|                           |                                       |                                  
|                           |                                       | Years Ended December 31,         
|                           |                                       |                                  
|                           |                                       | 2002                              |           | 2001    |           | 2000
|                           |                                       |                                   |           |         |           |     
|                           |                                       |                                  
|                           |                                       | (In thousands, except share data)
|Operating revenue          |                                       | $                                 | 2,101,472 |         |           | $    | 2,112,221 |         |           | $ | 1,973,839 |        
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|Operating expenses:        |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           | Salaries, wages and employee benefits |                                   |           | 776,206 |           |      |           | 782,222 |           |   |           | 674,936 |          
|                           | Operating supplies and expenses       |                                   |           | 192,633 |           |      |           | 185,698 |           |   |           | 161,204 |          
|                           | Fuel                                  |                                   |           | 260,569 |           |      |           | 274,752 |           |   |           | 265,055 |          
|                           | Purchased transportation              |                                   |           | 358,871 |           |      |           | 365,596 |           |   |           | 398,807 |          
|                           | Rental expense                        |                                   |           | 86,166  |           |      |           | 99,387  |           |   |           | 71,044  |          
|                           | Insurance and claims                  |                                   |           | 86,078  |           |      |           | 93,654  |           |   |           | 53,853  |          
|                           | Depreciation and amortization         |                                   |           | 147,401 |           |      |           | 144,312 |           |   |           | 134,395 |          
|                           | Communications and utilities          |                                   |           | 27,473  |           |      |           | 28,221  |           |   |           | 25,400  |          
|                           | Operating taxes and licenses          |                                   |           | 48,936  |           |      |           | 50,755  |           |   |           | 46,809  |          
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           |                                       | Total operating expenses          |           |         | 1,984,333 |      |           |         | 2,024,597 |   |           |         | 1,831,503 | 
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           |                                       | Operating income                  |           |         | 117,139   |      |           |         | 87,624    |   |           |         | 142,336   | 
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|Other (income) expenses:   |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           | Interest expense                      |                                   |           | 21,979  |           |      |           | 33,393  |           |   |           | 34,117  |          
|                           | Interest income                       |                                   |           | (2,353  | )         |      |           | (1,200  | )         |   |           | (742    | )        
|                           | Other                                 |                                   |           | 1,405   |           |      |           | 10,062  |           |   |           | (1,053  | )        
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           |                                       | Other (income) expenses, net      |           |         | 21,031    |      |           |         | 42,255    |   |           |         | 32,322    | 
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           |                                       | Earnings before income taxes      |           |         | 96,108    |      |           |         | 45,369    |   |           |         | 110,014   | 
|                           | Income taxes                          |                                   |           | 36,520  |           |      |           | 18,148  |           |   |           | 41,071  |          
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|                           |                                       | Net earnings                      |           | $       | 59,588    |      |           | $       | 27,221    |   |           | $       | 68,943    | 
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|Basic earnings per share   |                                       | $                                 | .70       |         |           | $    | .32       |         |           | $ | .83       |        
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        
|Diluted earnings per share |                                       | $                                 | .69       |         |           | $    | .32       |         |           | $ | .82       |        
|                           |                                       |                                   |           |         |           |      |           |         |           |   |           |        

See accompanying notes to consolidated financial
statements.

25



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY

|                                                                                  |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   |         |  
|--------------------------------------------------------------------------------- |  | --------------------------------- | ---------- | ---------- |  | -------- | -- | -------- |  | ----- | ------- | ------------- |  | ------ | ------- | - |  | - | ------- | - |  | - | ------ | - |  | - | ------- | -
|                                                                                  |  |                                   |            |            |  |          |    |          |  |       |         |              
|                                                                                  |  | Common Stock                      |            | Additional |  |          |    |          |  |       |         | Total        
|                                                                                  |  |                                   |            | Paid-In    |  | Retained |    | Treasury |  | Other |         | Stockholders
|                                                                                  |  | Shares                            |            | Par Value  |  | Capital  |    | Earnings |  | Stock |         | Equity        |  | Equity
|                                                                                  |  |                                   |            |            |  |          |    |          |  |       |         |               |  |       
|                                                                                  |  |                                  
|                                                                                  |  | (In thousands, except share data)
|Balances, December 31, 1999                                                       |  |                                   | 86,730,888 |            |  | $        | 87 |          |  | $     | 197,885 |               |  | $      | 447,802 |   |  | $ | (21,187 | ) |  | $ | (2,088 | ) |  | $ | 622,499 |  
|Issuance of common stock under stock option and
    employee stock purchase plans |  |                                   | 804,015    |            |  |          |    |          |  |       | 6,478   |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   | 6,478   |  
|Income tax benefit arising from the exercise of
    stock options                 |  |                                   |            |            |  |          |    |          |  |       | 900     |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   | 900     |  
|Amortization of deferred compensation                                             |  |                                   |            |            |  |          |    |          |  |       | 478     |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   | 478     |  
|Repurchase and cancellation of treasury stock                                     |  |                                   | (2,159,170 | )          |  |          | (2 | )        |  |       | (6,837  | )             |  |        | (20,074 | ) |  |   |         |   |  |   |        |   |  |   | (26,913 | )
|Notes receivable from officers                                                    |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   |         |   |  |   | (852   | ) |  |   | (852    | )
|Foreign currency translation                                                      |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   |         |   |  |   | 94     |   |  |   | 94      |  
|Purchase of 1,295,300 shares of treasury stock                                    |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   | (16,748 | ) |  |   |        |   |  |   | (16,748 | )
|Net earnings                                                                      |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        | 68,943  |   |  |   |         |   |  |   |        |   |  |   | 68,943  |  
|                                                                                  |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   |         |  
|Balances, December 31, 2000                                                       |  |                                   | 85,375,733 |            |  |          | 85 |          |  |       | 198,904 |               |  |        | 496,671 |   |  |   | (37,935 | ) |  |   | (2,846 | ) |  |   | 654,879 |  
|Issuance of common stock under stock option and
    employee stock purchase plans |  |                                   | 2,353,786  |            |  |          | 3  |          |  |       | 27,230  |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   | 27,233  |  
|Issuance of common stock upon public offering                                     |  |                                   | 1,320,000  |            |  |          | 1  |          |  |       | 20,063  |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   | 20,064  |  
|Income tax benefit arising from the exercise of
    stock options                 |  |                                   |            |            |  |          |    |          |  |       | 2,491   |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   | 2,491   |  
|Amortization of deferred compensation                                             |  |                                   |            |            |  |          |    |          |  |       | 722     |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   | 722     |  
|Notes receivable from officers                                                    |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   |         |   |  |   | 852    |   |  |   | 852     |  
|Foreign currency translation                                                      |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   |         |   |  |   | 1,741  |   |  |   | 1,741   |  
|Net earnings                                                                      |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        | 27,221  |   |  |   |         |   |  |   |        |   |  |   | 27,221  |  
|                                                                                  |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   |         |  
|Balances, December 31, 2001                                                       |  |                                   | 89,049,519 |            |  |          | 89 |          |  |       | 249,410 |               |  |        | 523,892 |   |  |   | (37,935 | ) |  |   | (253   | ) |  |   | 735,203 |  
|Issuance of common stock under stock option and
    employee stock purchase plans |  |                                   | 1,132,754  |            |  |          | 1  |          |  |       | 13,567  |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   | 13,568  |  
|Income tax benefit arising from the exercise of
    stock options                 |  |                                   |            |            |  |          |    |          |  |       | 7,932   |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   | 7,932   |  
|Amortization of deferred compensation                                             |  |                                   |            |            |  |          |    |          |  |       | 1,190   |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   | 1,190   |  
|Foreign currency translation                                                      |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   |         |   |  |   | 253    |   |  |   | 253     |  
|Purchase of 3,079,227 shares of treasury stock                                    |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   | (51,956 | ) |  |   |        |   |  |   | (51,956 | )
|Net earnings                                                                      |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        | 59,588  |   |  |   |         |   |  |   |        |   |  |   | 59,588  |  
|                                                                                  |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   |         |  
|Balances, December 31, 2002                                                       |  |                                   | 90,182,273 |            |  | $        | 90 |          |  | $     | 272,099 |               |  | $      | 583,480 |   |  | $ | (89,891 | ) |  | $ |        |   |  | $ | 765,778 |  
|                                                                                  |  |                                   |            |            |  |          |    |          |  |       |         |               |  |        |         |   |  |   |         |   |  |   |        |   |  |   |         |  

See accompanying notes to consolidated financial
statements.

26



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |          |         |         |          |  
|------------------------------------------------------------------------ | --------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ------------------------------------------------------------- | ----------------------------------------- | ------- | ------- | -------- | -------- | ------- | -------- | -------- | -------- | ------- | ------- | -------- | -
|                                                                         |                                                                                         |                                                                  
|                                                                         |                                                                                         | Years Ended December 31,                                         
|                                                                         |                                                                                         |                                                                  
|                                                                         |                                                                                         | 2002                                                              |                                                               | 2001                                      |         | 2000   
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |        
|                                                                         |                                                                                         |                                                                  
|                                                                         |                                                                                         | (In thousands)                                                   
|Cash flows from operating activities:                                    |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         | Net earnings                                                                            |                                                                   | $                                                             | 59,588                                    |         |         | $        | 27,221   |         |          | $        | 68,943   |        
|                                                                         | Adjustments to reconcile net earnings to net cash
    provided by operating activities: |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |          |        
|                                                                         |                                                                                         | Depreciation and amortization                                     |                                                               |                                           | 143,073 |         |          |          | 143,257 |          |          |          | 135,252 |        
|                                                                         |                                                                                         | Deferred income taxes                                             |                                                               |                                           | 27,379  |         |          |          | 16,066  |          |          |          | 25,112  |        
|                                                                         |                                                                                         | Income tax benefit arising from the exercise of
    stock options |                                                               |                                           | 7,932   |         |          |          | 2,491   |          |          |          | 900     |        
|                                                                         |                                                                                         | Provision for losses on accounts receivable                       |                                                               |                                           | 6,579   |         |          |          | 4,734   |          |          |          | 2,332   |        
|                                                                         |                                                                                         | Amortization of deferred compensation                             |                                                               |                                           | 1,190   |         |          |          | 722     |          |          |          | 478     |        
|                                                                         |                                                                                         | Fair market value of interest rate swaps                          |                                                               |                                           | 5,897   |         |          |          | 4,050   |          |          |          |         |        
|                                                                         |                                                                                         | EASO impairment adjustment                                        |                                                               |                                           |         |         |          |          | 10,447  |          |          |          |         |        
|                                                                         |                                                                                         | Impairment of property                                            |                                                               |                                           | 3,100   |         |          |          |         |          |          |          |         |        
|                                                                         |                                                                                         | Amortization of deferred legal fees                               |                                                               |                                           | 4,238   |         |          |          |         |          |          |          |         |        
|                                                                         |                                                                                         | Increase (decrease) in cash resulting from
    changes in:        |                                                               |                                           |         |         |          |          |         |          |          |          |         |        
|                                                                         |                                                                                         |                                                                   | Accounts receivable                                           |                                           |         | (14,092 | )        |          |         | 20,670   |          |          |         | (39,198 | )       
|                                                                         |                                                                                         |                                                                   | Inventories and supplies                                      |                                           |         | (4,349  | )        |          |         | (1,534   | )        |          |         | (1,556  | )       
|                                                                         |                                                                                         |                                                                   | Prepaid expenses and other current assets                     |                                           |         | 7,860   |          |          |         | 7,719    |          |          |         | (10,181 | )       
|                                                                         |                                                                                         |                                                                   | Other assets                                                  |                                           |         | (15,863 | )        |          |         | (4,102   | )        |          |         | (2,371  | )       
|                                                                         |                                                                                         |                                                                   | Accounts payable, accrued liabilities and claims
    accruals |                                           |         | 34,184  |          |          |         | 31,196   |          |          |         | (7,682  | )       
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         |                                                                                         |                                                                   |                                                               | Net cash provided by operating activities |         |         | 266,716  |          |         |          | 262,937  |          |         |         | 172,029  |  
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|Cash flows from investing activities:                                    |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         | Proceeds from sale of property and equipment                                            |                                                                   |                                                               | 117,099                                   |         |         |          | 59,254   |         |          |          | 172,880  |        
|                                                                         | Capital expenditures                                                                    |                                                                   |                                                               | (335,688                                  | )       |         |          | (224,259 | )       |          |          | (355,995 | )      
|                                                                         | Equity investment                                                                       |                                                                   |                                                               |                                           |         |         |          |          |         |          |          | (21,007  | )      
|                                                                         | Loans to investment entities                                                            |                                                                   |                                                               | (15,851                                   | )       |         |          |          |         |          |          | (4,384   | )      
|                                                                         | Repayment of notes receivables                                                          |                                                                   |                                                               | 1,000                                     |         |         |          | 4,052    |         |          |          |          |        
|                                                                         | Other                                                                                   |                                                                   |                                                               |                                           |         |         |          |          |         |          |          | (1,500   | )      
|                                                                         | Payments received on equipment sales receivables                                        |                                                                   |                                                               | (2,107                                    | )       |         |          | 5,799    |         |          |          | 5,955    |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         |                                                                                         |                                                                   |                                                               | Net cash used in investing activities     |         |         | (235,547 | )        |         |          | (155,154 | )        |         |         | (204,051 | )
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|Cash flows from financing activities:                                    |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         | Repayments of long-term debt and capital leases                                         |                                                                   |                                                               | (71,402                                   | )       |         |          | (122,567 | )       |          |          | (43,788  | )      
|                                                                         | Borrowings under line of credit                                                         |                                                                   |                                                               | 182,900                                   |         |         |          | 178,000  |         |          |          |          |        
|                                                                         | Repayments of borrowings under line of credit                                           |                                                                   |                                                               | (163,500                                  | )       |         |          | (215,000 | )       |          |          | 6,299    |        
|                                                                         | Change in borrowings under accounts receivable
    securitization                       |                                                                   |                                                               | 53,000                                    |         |         |          | (1,000   | )       |          |          | 117,000  |        
|                                                                         | Proceeds from public offering                                                           |                                                                   |                                                               |                                           |         |         |          | 20,064   |         |          |          |          |        
|                                                                         | Proceeds from sale of common stock                                                      |                                                                   |                                                               | 13,568                                    |         |         |          | 27,233   |         |          |          | 5,610    |        
|                                                                         | Purchase of treasury stock                                                              |                                                                   |                                                               | (51,956                                   | )       |         |          |          |         |          |          | (43,672  | )      
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         |                                                                                         |                                                                   | Net cash provided (used) by financing
    activities          |                                           |         | (37,390 | )        |          |         | (113,270 | )        |          |         | 41,449  |         
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|Net (decrease) increase in cash                                          |                                                                                         |                                                                   | (6,221                                                        | )                                         |         |         | (5,487   | )        |         |          | 9,427    |         
|Cash at beginning of year                                                |                                                                                         |                                                                   | 14,151                                                        |                                           |         |         | 19,638   |          |         |          | 10,211   |         
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|Cash at end of year                                                      |                                                                                         | $                                                                 | 7,930                                                         |                                           |         | $       | 14,151   |          |         | $        | 19,638   |         
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|Supplemental disclosure of cash flow information:                        |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         | Cash paid during the year for:                                                          |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |          |        
|                                                                         |                                                                                         | Interest                                                          |                                                               | $                                         | 14,726  |         |          | $        | 29,809  |          |          | $        | 32,227  |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         |                                                                                         | Income taxes                                                      |                                                               | $                                         |         |         |          | $        | 3,016   |          |          | $        | 9,796   |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|Supplemental schedule of noncash investing and
    financing activities: |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         |                                                                                         | Equipment sales receivables                                       |                                                               | $                                         | 11,100  |         |          | $        | 2,107   |          |          | $        | 5,788   |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         |                                                                                         | Direct financing for purchase of equipment                        |                                                               | $                                         |         |         |          | $        | 5,605   |          |          | $        | 5,063   |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         |                                                                                         | Notes receivable from officers                                    |                                                               | $                                         |         |         |          | $        |         |          |          | $        | 852     |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         
|                                                                         |                                                                                         | Note receivable from property sale                                |                                                               | $                                         |         |         |          | $        | 1,715   |          |          | $        |         |        
|                                                                         |                                                                                         |                                                                   |                                                               |                                           |         |         |          |          |         |          |          |         

See accompanying notes to consolidated financial
statements.

27



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

December 31, 2002, 2001 AND
2000


(1) Summary of Significant Accounting
Policies

Description of Business

Swift Transportation Co., Inc., a Nevada holding
company, together with its wholly-owned subsidiaries
(Company), is a national truckload carrier operating
throughout the continental United States. The Company operates a
national terminal network and a fleet of approximately
16,000 tractors from its headquarters in Phoenix, Arizona.

Principles of Consolidation

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

Cash and Cash Equivalents

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

Inventories and Supplies

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

Property and Equipment

Property and equipment are stated at cost. Gains
and losses from the sale of revenue equipment are included as a
component of depreciation expense. Gains and losses in 2002,
2001 and 2000 were $8.1 million and $3.7 million, $3.4
million and $1.8 million and $10.8 million and
$1.9 million, respectively.

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

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

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

Goodwill

Goodwill represents the excess of purchase price
over fair value of net assets acquired. Such goodwill was being
amortized on the straight-line method over periods ranging from
5 to 20 years. Accumulated amortization was $8,093,000 at
December 31, 2002 and 2001. The Company adopted Statement
of Financial Standards No. 142 Goodwill and Other
Intangible Assets on January 1, 2002. This standard
eliminates amortization of goodwill and replaces it with a test
for impairment. The Company has $8.9 million of goodwill.
The Company amortized $1.4 million of goodwill for each of
the years ended December 30, 2001 and 2000, respectively.
Basic earnings per share would have been $.34 and $.84 per share
for the years ended

28



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

December 31, 2001 and 2000 and diluted
earnings per share would have been $.34 and $.83 per share for
the years ended December 31, 2001 and 2000 without goodwill
amortization. Also, see the footnote on Equity
Investment  Transplace for further discussion.

Revenue Recognition

Operating revenues and related direct costs are
recognized as of the date the freight is picked up for shipment.
M.S. Carriers (see Pooling of Interests note) recognized revenue
on the date freight was delivered. Beginning January 1,
2002, M.S. Carriers was operationally combined with the Company
and recognizes revenue on the date freight is picked up for
shipment. Our revenue recognition policy is consistent with
method two under EITF 91-9. We do not believe the financial
results derived from the application of this method differ
materially from the results that would be derived under method
three discussed within EITF 91-9 due to the Companys
relatively short length of haul.

Stock Compensation Plans

The Company applies APB Opinion No. 25 and
related interpretations in accounting for its plans.
Accordingly, no compensation cost has been recognized for its
Employee Stock Purchase Plan. The compensation cost that has
been charged against income for its Fixed Stock Option Plans was
$1,190,000, $722,000 and $478,000 for 2002, 2001 and 2000,
respectively.

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

|                            |  |                                                                       |  |      |        |      |  |      |        |   |  |   |        |  
|--------------------------- |  | --------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                            |  |                                                                       |  | 2002 |        | 2001 |  | 2000
|                            |  |                                                                       |  |      |        |      |  |     
|Net earnings (in thousands) |  | As Reported                                                           |  | $    | 59,588 |      |  | $    | 27,221 |   |  | $ | 68,943 |  
|                            |  | Add: Compensation expense, using intrinsic
    method, net of tax     |  |      | 738    |      |  |      | 445    |   |  |   | 295    |  
|                            |  | Deduct: Compensation expense, using fair value
    method, net of tax |  |      | (4,177 | )    |  |      | (3,395 | ) |  |   | (2,999 | )
|                            |  |                                                                       |  |      |        |      |  |      |        |   |  |   |        |  
|                            |  | Pro forma                                                             |  | $    | 56,149 |      |  | $    | 24,271 |   |  | $ | 66,239 |  
|                            |  |                                                                       |  |      |        |      |  |      |        |   |  |   |        |  
|Basic earnings per share    |  | As Reported                                                           |  | $    | .70    |      |  | $    | .32    |   |  | $ | .83    |  
|                            |  |                                                                       |  |      |        |      |  |      |        |   |  |   |        |  
|                            |  | Pro forma                                                             |  | $    | .66    |      |  | $    | .29    |   |  | $ | .80    |  
|                            |  |                                                                       |  |      |        |      |  |      |        |   |  |   |        |  
|Diluted earnings per share  |  | As Reported                                                           |  | $    | .69    |      |  | $    | .32    |   |  | $ | .82    |  
|                            |  |                                                                       |  |      |        |      |  |      |        |   |  |   |        |  
|                            |  | Pro forma                                                             |  | $    | .65    |      |  | $    | .28    |   |  | $ | .79    |  
|                            |  |                                                                       |  |      |        |      |  |      |        |   |  |   |        |  

Pro forma net earnings reflect only options
granted in 1995 through 2002. Therefore, the full impact of
calculating compensation cost for stock options under SFAS
No. 123 is not reflected in the pro forma net earnings
amounts presented above because compensation cost is reflected
over the options vesting period and compensation cost for
options granted prior to January 1, 1995 is not considered
under SFAS No. 123.

Income Taxes

The Company accounts for income taxes under the
asset and liability method. Deferred tax assets and liabilities
are recognized for the future tax consequences attributable to
differences between the financial statement carrying amount of
existing assets and liabilities and their respective tax bases.
Deferred tax assets

29



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

Use of Estimates

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

Accounting Standards Not Yet Adopted by the
Company

The Financial Accounting Standards Board has
issued Statements of Financial Accounting Standard
(SFAS) and Interpretations (FIN) for
which the required implementation dates have not yet become
effective. Those standards that may materially impact the
Company are discussed below.

In December 2002, SFAS No. 148,
Accounting for Stock-Based Compensation 
Transition and Disclosure, was issued. This standard
provides guidance on the transition, if a company so elects,
from the intrinsic value method of accounting for stock-based
employee compensation under Accounting Principles Board Opinion
No. 25, which the Company currently uses, to the fair value
method of accounting under SFAS No. 123. In addition, this
standard now requires certain disclosures in our interim
financial statements that previously were only required in our
Annual Report on Form 10K. The standard is effective for
the Company beginning January 1, 2003. The Company has not
yet made a decision on the adoption of the fair value method of
accounting for stock options under SFAS No. 123.

In November 2002, FIN 45,
Guarantors Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of
Others was issued. This standard requires a guarantor
recognize, at the inception of a guarantee, a liability for the
fair value of the obligation undertaken in issuing the
guarantee. The standard also elaborates on the disclosures to be
made by a guarantor in its financial statements about its
obligations under certain guarantees that it has issued. The
recognition provisions of this standard apply to guarantees
issued or modified after December 31, 2002. The disclosure
provisions of this standard apply to our financial statements
for the year ended December 31, 2002. Under this new
standard, the Company will be required to recognize a liability
for the fair value of the guarantee of residual values on any
new operating leases or any other guarantees it modifies or
issues. Presently, the Company is not able to estimate the
impact on its financial statements of the implementation of this
standard.

(2) Pooling of Interests

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

30



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SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

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

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

(3) Accounts Receivable

Accounts receivable consists of:

|                                     |  |                |         |      |  |   |         | 
|------------------------------------ |  | -------------- | ------- | ---- |  | - | ------- | 
|                                     |  |               
|                                     |  | December 31,  
|                                     |  |               
|                                     |  | 2002           |         | 2001
|                                     |  |                |         |     
|                                     |  |               
|                                     |  | (In thousands)
|Trade customers                      |  | $              | 259,626 |      |  | $ | 239,191 | 
|Equipment manufacturers              |  |                | 5,453   |      |  |   | 2,707   | 
|Income tax receivable                |  |                | 9,968   |      |  |   | 11,162  | 
|Other                                |  |                | 9,683   |      |  |   | 6,325   | 
|                                     |  |                |         |      |  |   |         | 
|                                     |  |                | 284,730 |      |  |   | 259,385 | 
|Less allowance for doubtful accounts |  |                | 12,185  |      |  |   | 10,660  | 
|                                     |  |                |         |      |  |   |         | 
|                                     |  | $              | 272,545 |      |  | $ | 248,725 | 
|                                     |  |                |         |      |  |   |         | 

The schedule of allowance for doubtful accounts
is as follows:

|                         |  |                |        |           |  |            |        |         |  |   |         |   |  |   |        | 
|------------------------ |  | -------------- | ------ | --------- |  | ---------- | ------ | ------- |  | - | ------- | - |  | - | ------ | 
|                         |  | Beginning      |        |           |  |            |        | Ending 
|                         |  | Balance        |        | Additions |  | Deductions |        | Balance
|                         |  |                |        |           |  |            |        |        
|                         |  |               
|                         |  | (In thousands)
|Years ended December 31: |  |                |        |           |  |            |        |         |  |   |         |   |  |   |        | 
|2002                     |  | $              | 10,660 |           |  | $          | 6,579  |         |  | $ | (5,054  | ) |  | $ | 12,185 | 
|                         |  |                |        |           |  |            |        |         |  |   |         |   |  |   |        | 
|2001                     |  | $              | 13,164 |           |  | $          | 8,483  |         |  | $ | (10,987 | ) |  | $ | 10,660 | 
|                         |  |                |        |           |  |            |        |         |  |   |         |   |  |   |        | 
|2000                     |  | $              | 9,740  |           |  | $          | 15,148 |         |  | $ | (11,724 | ) |  | $ | 13,164 | 
|                         |  |                |        |           |  |            |        |         |  |   |         |   |  |   |        | 

(4) Assets Held for Sale

As a result of the merger with M.S. Carriers, the
Company anticipates it will dispose of certain duplicate
facilities. As of December 31, 2002, the Company has
identified two properties, which are stated at the lower of
depreciated cost or fair value less costs to sell, and are
classified as assets held for sale. The Company

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SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

expects to dispose of these two properties within
twelve months and does not expect any material loss on these
dispositions.

In February 2000, the Company sold a portion of
assets related to the Companys former corporate
headquarters. There was no gain or loss on the sale of these
assets. In December 2000, the Company recorded an adjustment to
reduce the carrying value of these assets by $450,000 to reflect
the effect of a pending sale of the remaining former corporate
headquarters assets. In January 2001, the Company sold the
remainder of the former corporate headquarters assets. The
Company received $1,000,000 at the date of sale and $1,000,000
payments in February 2002 and February 2003.

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

(5) Equity Investment 
Transplace

The Company and four other large transportation
companies contributed their transportation logistics businesses
along with associated intangible assets to Transplace, a leading
provider of logistics and transportation management services.
Transplace commenced operations on July 1, 2000. The
Company also contributed $10,000,000 to Transplace in 2000. The
Companys interest in Transplace, which is accounted for
using the equity method, is approximately 29%. The Company
recorded equity (losses) earnings of ($2.7) million,
($3.0) million and $0.5 million in other expense
during the years ending December 31, 2002, 2001 and 2000,
respectively for Transplace.

The Companys equity in the net assets of
Transplace exceeds its investment account by approximately
$30 million as of December 31, 2002 and 2001. As
Transplace records amortization or impairment of goodwill and
intangibles, the Company will accrete an equal amount of basis
difference to offset such amortization or impairment.

(6) Note Receivable 
Transmex

The Company has advanced $11.6 million to
Trans-Mex, Inc. S.A. de C. V., a Mexican corporation of which
the Company owns 49% and intends to purchase the remaining 51%
in February 2004. These loans, which are secured by equipment,
bear interest at prime plus 2% with monthly payments of interest
plus amortization of the principal over five years.

(7) Equity Investment 
Transportes EASO

In 2001, the Company recorded a
$10.5 million adjustment to other expense in the statement
of earnings, of which $8.5 million relates to the
impairment of its 50% equity investment held by M.S. Carriers in
Transportes EASO, the largest intra-Mexico truckload carrier,
and $2 million is associated with the write off of a cash
advance made to EASO in the third quarter of 2001. The
Companys investment in Transportes EASO is zero as of
December 31, 2002 and 2001. See the Commitments footnote
for guarantees of Transportes EASO debt and leases by the
Company. We have discontinued applying the equity method to the
investment in Transportes EASO. M.S. Carriers has
guaranteed approximately $5.7 million of debt of
Transportes EASO as of December 31, 2002. We have evaluated
the market value of the trailers collateralizing the guaranteed
debt and leases. We estimate the market value of these assets,
using information provided by the worlds largest trailer
leasing company, exceeds the amount of the underlying debt and
leases

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SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

that have been guaranteed. Therefore, upon any
request to fulfill the guarantees, we would recover from the
proceeds of the disposal of the collateralized assets.

(8) Accrued Liabilities

Accrued liabilities consists of:

|                       |  |                |        |      |  |   |        | 
|---------------------- |  | -------------- | ------ | ---- |  | - | ------ | 
|                       |  |               
|                       |  | December 31,  
|                       |  |               
|                       |  | 2002           |        | 2001
|                       |  |                |        |     
|                       |  |               
|                       |  | (In thousands)
|Employee compensation  |  | $              | 33,003 |      |  | $ | 36,508 | 
|Fuel and mileage taxes |  |                | 1,226  |      |  |   | 2,473  | 
|Other                  |  |                | 17,932 |      |  |   | 19,944 | 
|                       |  |                |        |      |  |   |        | 
|                       |  | $              | 52,161 |      |  | $ | 58,925 | 
|                       |  |                |        |      |  |   |        | 

(9) Accounts Receivable
Securitization

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

Under the amended agreement, the Company can
receive up to a maximum of $200 million of proceeds,
subject to eligible receivables and will pay a program fee
recorded as interest expense, as defined in the agreement. The
Company will pay commercial paper interest rates on the proceeds
received. The proceeds received will be reflected as a current
liability on the consolidated financial statements because the
committed term, subject to annual renewals, is 364 days. As
of December 31, 2002 and 2001 there were $169 million
and $116 million, respectively, of proceeds received.

(10) Borrowings Under Revolving Credit
Agreement

The Company has a $255 million unsecured
revolving line of credit under an agreement with seven banks
(the Credit Agreement), which matures on November 21, 2005.
Interest on outstanding borrowings is based upon one of two
options, which the Company selects at the time of borrowing: the
banks prime rate or the London Interbank Offered Rate
(LIBOR) plus applicable margins ranging from 62.5 to 137.5
basis points, as defined in the Credit Agreement (currently
70 basis points). The unused portion of the line of credit
is subject to a commitment fee ranging from 17.5 to 25 basis
points (currently 20 basis points). As of December 31,
2002 and 2001, there was $136.4 and $117 million
outstanding under the line of credit.

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

The Credit Agreement includes financing for
letters of credit up to $150 million. The Company has
outstanding letters of credit primarily for workers
compensation and liability self-insurance purposes totaling
$48.4 million at December 31, 2002.

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SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(11) Long-Term Debt

Long-term debt consists of the following:

|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                |                      |        |      |        |   |        |       |        | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | -------------------- | ------ | ---- | ------ | - | ------ | ----- | ------ | 
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                |                     
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                | December 31,        
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                |                     
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                | 2002                 |        | 2001
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                |                      |        |     
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                |                     
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                | (In thousands)      
|Note payable to financial institution bearing
    interest at Libor plus 1% payable quarterly with one principal
    payment due in 2004 secured by equipment                                                                                                                                                                                                                                        |                                                | $                    |        |      |        | $ | 3,499  |      
|Notes payable to commercial lending institutions
    with varying payments through the year 2005:                                                                                                                                                                                                                                                                                                    |                                                |                      |        |      |        |   |        |      
|                                                                                                                                                                                                                                                                                                                                                                                                     | Fixed interest rates ranging from 3.8% to 4.8% |                      |        | 776  |        |   |        | 1,387 |       
|Note payable to insurance company bearing
    interest at 6.78% payable monthly with principal payments of
    $3,000,000 due in 2003 through 2006 secured by deed of trust on
    Phoenix facilities. Covenant requirements include minimum debt
    to equity and debt coverage ratios and tangible net worth. The
    covenants include limitations on dividends and treasury stock
    purchases |                                                |                      | 12,000 |      |        |   | 15,000 |      
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                |                      |        |      |        |   |        |      
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                | Total long-term debt |        |      | 12,776 |   |        |       | 19,886 | 
|Less current portion                                                                                                                                                                                                                                                                                                                                                                                 |                                                |                      | 3,389  |      |        |   | 3,546  |      
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                |                      |        |      |        |   |        |      
|Long-term debt, less current portion                                                                                                                                                                                                                                                                                                                                                                 |                                                | $                    | 9,387  |      |        | $ | 16,340 |      
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                |                      |        |      |        |   |        |      

The aggregate annual maturities of long-term debt
as of December 31, 2002 are as follows:

|             |  |                |        | 
|------------ |  | -------------- | ------ | 
|Years Ending |  |               
|December 31, |  | (In thousands)
|             |  |               
|2003         |  | $              | 3,389  | 
|2004         |  |                | 3,384  | 
|2005         |  |                | 3,003  | 
|2006         |  |                | 3,000  | 
|             |  |                |        | 
|             |  | $              | 12,776 | 
|             |  |                |        | 

For the years ended December 31, 2002, 2001
and 2000, the Company capitalized interest related to
self-constructed assets totaling $415,000, $784,000 and
$1,210,000, respectively.

(12) Capital Leases

The Company leases certain revenue equipment
under capital leases. The Companys capital leases contain
guarantees of residual values. Certain leases contain renewal or
fixed price purchase options. The leases are collateralized by
revenue equipment with a cost of $140.4 million and
$225.6 million and accumulated amortization of
$46.1 million and $70.0 million at December 31,
2002 and 2001, respectively. The amortization of the equipment
under capital leases is included in depreciation expense.

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SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

|                                        |  |                |        | 
|--------------------------------------- |  | -------------- | ------ | 
|                                        |  | December 31,  
|                                        |  | 2002          
|                                        |  |               
|                                        |  | (In thousands)
|2003                                    |  | $              | 49,437 | 
|2004                                    |  |                | 20,915 | 
|2005                                    |  |                | 17,590 | 
|2006                                    |  |                | 1,815  | 
|                                        |  |                |        | 
|Total minimum lease payments            |  |                | 89,757 | 
|Less: Amount representing interest      |  |                | 6,242  | 
|                                        |  |                |        | 
|Present value of minimum lease payments |  |                | 83,515 | 
|Less current portion                    |  |                | 45,832 | 
|                                        |  |                |        | 
|Capital lease obligations, long-term    |  | $              | 37,683 | 
|                                        |  |                |        | 

(13) Derivative Financial
Instruments

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

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

For the years ended December 31, 2002 and
2001, the Company recognized a loss for the change in fair
market value of the interest rate swap agreements of $5,897,000
and $4,050,000. The changes in fair market value of the interest
rate swap agreements are recorded as interest expense.

(14) Commitments

Operating Leases

The Company leases various revenue equipment and
terminal facilities under operating leases. At December 31,
2002, the future minimum lease payments under noncancelable
operating leases are as follows:

|                             |  |                |         |            |  |       |       |  |  |   |         | 
|---------------------------- |  | -------------- | ------- | ---------- |  | ----- | ----- |  |  | - | ------- | 
|Years Ending                 |  | Revenue        |         |            |  |      
|December 31,                 |  | Equipment      |         | Facilities |  | Total
|                             |  |                |         |            |  |      
|                             |  |               
|                             |  | (In thousands)
|2003                         |  | $              | 62,414  |            |  | $     | 1,782 |  |  | $ | 64,196  | 
|2004                         |  |                | 36,028  |            |  |       | 1,241 |  |  |   | 37,269  | 
|2005                         |  |                | 19,287  |            |  |       | 648   |  |  |   | 19,935  | 
|2006                         |  |                | 8,205   |            |  |       | 34    |  |  |   | 8,239   | 
|2007                         |  |                | 4,797   |            |  |       | 34    |  |  |   | 4,831   | 
|Thereafter                   |  |                |         |            |  |       | 63    |  |  |   | 63      | 
|                             |  |                |         |            |  |       |       |  |  |   |         | 
|Total minimum lease payments |  | $              | 130,731 |            |  | $     | 3,802 |  |  | $ | 134,533 | 
|                             |  |                |         |            |  |       |       |  |  |   |         | 

35



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The revenue equipment leases generally include
purchase options exercisable at the completion of the lease. The
Company recorded gains of approximately $1,800,000, $338,000,
and $1,100,000 million from the sale of leased tractors in
2002, 2001, and 2000, respectively.

Purchase Commitments

The Company had commitments outstanding to
acquire revenue equipment for approximately $27 million at
December 31, 2002. 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.

Guarantees

The Company has guaranteed approximately
$3.8 million of debt of Trans-Mex, Inc. S. A. de C. V., a
truckload carrier within the Republic of Mexico of which the
Company owns 49%. This debt, with periods not exceeding five
years, relates to the acquisition of revenue equipment.

In addition, the Company has guaranteed
approximately $5.7 million of debt of Transportes EASO.

Furthermore, the Company guarantees certain
residual values under its operating lease agreements for revenue
equipment. At the termination of these operating leases, the
Company would be responsible for the excess of the guarantee
amount above the fair market value, if any. The maximum
potential amount of future payments the Company would be
required to make under these guarantees is $149 million.

(15) Earnings Per Share

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

|                                                              |  |                          |        |      |  |      |        |  |  |   |        | 
|------------------------------------------------------------- |  | ------------------------ | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                                              |  |                         
|                                                              |  | Year ending December 31,
|                                                              |  |                         
|                                                              |  | 2002                     |        | 2001 |  | 2000
|                                                              |  |                          |        |      |  |     
|                                                              |  |                         
|                                                              |  | (In thousands, except   
|                                                              |  | per share amounts)      
|Net earnings                                                  |  | $                        | 59,588 |      |  | $    | 27,221 |  |  | $ | 68,943 | 
|                                                              |  |                          |        |      |  |      |        |  |  |   |        | 
|Weighted average shares:                                      |  |                          |        |      |  |      |        |  |  |   |        | 
|Common shares outstanding for basic earnings per
    share    |  |                          | 85,502 |      |  |      | 83,781 |  |  |   | 82,627 | 
|Equivalent shares issuable upon exercise of stock
    options |  |                          | 1,426  |      |  |      | 1,937  |  |  |   | 1,051  | 
|                                                              |  |                          |        |      |  |      |        |  |  |   |        | 
|Diluted shares                                                |  |                          | 86,928 |      |  |      | 85,718 |  |  |   | 83,678 | 
|                                                              |  |                          |        |      |  |      |        |  |  |   |        | 
|Basic earnings per share                                      |  | $                        | .70    |      |  | $    | .32    |  |  | $ | .83    | 
|                                                              |  |                          |        |      |  |      |        |  |  |   |        | 
|Diluted earnings per share                                    |  | $                        | .69    |      |  | $    | .32    |  |  | $ | .82    | 
|                                                              |  |                          |        |      |  |      |        |  |  |   |        | 

Equivalent shares issuable upon exercise of stock
options exclude 436,000, 453,000 and 917,000 shares in 2002,
2001 and 2000, respectively, as the effect was antidilutive.

(16) Public Stock Offering

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

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SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(17) Stockholders Equity

The Company purchased 3,079,227 and 3,454,470
shares of its common stock for a total cost of
$52.0 million and $43.7 million during 2002 and 2000,
respectively. All of the shares purchased in 2002 and a portion
of these shares (1,295,300 shares) purchased in 2000 are being
held as treasury stock and may be used for issuances under the
Companys employee stock option and purchase plans or for
other general corporate purposes. The remainder of the shares
purchased in 2000 (2,159,170 shares) were cancelled.

The Board of Directors has authorized the Company
to repurchase up to an additional 3,000,000 shares of its common
stock. The first 1,000,000 shares of stock, of which 79,227
shares have been purchased as of December 31, 2002, may be
purchased in the open market or in privately negotiated
transactions at price levels set by the Board of Directors. The
Board of Directors will establish criteria for the repurchase of
the remaining 2,000,000 shares of stock at a future date.

Stock Option Plans

The Company has a number of stock options under
various plans. Options granted by M.S. Carriers have generally
been granted with an exercise price equal to the market price on
the grant date and expire on the tenth anniversary of the grant
date. The options granted to M.S. Carriers employees vested on
June 29, 2001. Options granted by Swift to employees have
been granted with an exercise price equal to 85 percent of
the market price on the grant date and expire on the tenth
anniversary of the grant date. The majority of options granted
by Swift to employees vest 20 percent per year beginning on
the fifth anniversary of the grant date. Options granted to
Swift non-employee directors have been granted with an exercise
price equal to 85 percent of the market price on the grant
date, vest on the grant date and expire on the sixth anniversary
of the grant date.

As of December 31, 2002, the Company is
authorized to grant an additional 4.2 million shares.

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 2000 through 2002:

|                                         |  |      |     |      |  |      |     |   |  |  |     |  
|---------------------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                         |  | 2002 |     | 2001 |  | 2000
|                                         |  |      |     |      |  |     
|Dividend yield                           |  |      | 0   | %    |  |      | 0   | % |  |  | 0   | %
|Expected volatility                      |  |      | 45  | %    |  |      | 45  | % |  |  | 45  | %
|Risk free interest rate                  |  |      | 3.9 | %    |  |      | 5   | % |  |  | 6.5 | %
|Expected lives (days after vesting date) |  |      | 150 |      |  |      | 110 |   |  |  | 73  |  

37



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

A summary of the status of the Companys
fixed stock option plans as of December 31, 2002, 2001 and
2000, and changes during the years then ended on those dates is
presented below:

|                                                                   |  |        |           |           |  |        |       |           |  |        |            |           |  |   |       |  |  |   |           |   |  |   |       | 
|------------------------------------------------------------------ |  | ------ | --------- | --------- |  | ------ | ----- | --------- |  | ------ | ---------- | --------- |  | - | ----- |  |  | - | --------- | - |  | - | ----- | 
|                                                                   |  |        |           |           |  |       
|                                                                   |  | 2002   |           | 2001      |  | 2000  
|                                                                   |  |        |           |           |  |       
|                                                                   |  |        |           | Weighted- |  |        |       | Weighted- |  |        |            | Weighted-
|                                                                   |  |        |           | Average   |  |        |       | Average   |  |        |            | Average  
|                                                                   |  |        |           | Exercise  |  |        |       | Exercise  |  |        |            | Exercise 
|                                                                   |  | Shares |           | Price     |  | Shares |       | Price     |  | Shares |            | Price    
|                                                                   |  |        |           |           |  |        |       |           |  |        |            |          
|Outstanding at beginning of year                                   |  |        | 6,142,239 |           |  | $      | 10.89 |           |  |        | 7,962,604  |           |  | $ | 10.59 |  |  |   | 6,822,650 |   |  | $ | 10.37 | 
|Granted                                                            |  |        | 2,059,500 |           |  | $      | 16.51 |           |  |        | 587,450    |           |  | $ | 16.83 |  |  |   | 2,306,000 |   |  | $ | 11.18 | 
|Exercised                                                          |  |        | (809,479  | )         |  | $      | 9.78  |           |  |        | (2,031,817 | )         |  | $ | 10.88 |  |  |   | (414,049  | ) |  | $ | 4.45  | 
|Forfeited                                                          |  |        | (447,773  | )         |  | $      | 15.68 |           |  |        | (375,998   | )         |  | $ | 13.16 |  |  |   | (751,997  | ) |  | $ | 13.69 | 
|                                                                   |  |        |           |           |  |        |       |           |  |        |            |           |  |   |       |  |  |   |           |   |  |   |       | 
|Outstanding at end of year                                         |  |        | 6,944,487 |           |  | $      | 12.41 |           |  |        | 6,142,239  |           |  | $ | 10.94 |  |  |   | 7,962,604 |   |  | $ | 10.59 | 
|                                                                   |  |        |           |           |  |        |       |           |  |        |            |           |  |   |       |  |  |   |           |   |  |   |       | 
|Options exercisable at year-end                                    |  |        | 1,245,367 |           |  |        |       |           |  |        | 1,740,948  |           |  |   |       |  |  |   | 1,359,168 |   |  |   |       | 
|Weighted-average fair value of options granted
    during the year |  | $      | 12.10     |           |  |        |       |           |  | $      | 8.07       |           |  |   |       |  |  | $ | 6.56      |   |  |   |       | 
|                                                                   |  |        |           |           |  |        |       |           |  |        |            |           |  |   |       |  |  |   |           |   |  |   |       | 

The following table summarizes information about
fixed stock options outstanding at December 31, 2002:

|                         |  |             |           |             |  |           |      |                     |  |           |       |  |  |  |           |  |  |   |       | 
|------------------------ |  | ----------- | --------- | ----------- |  | --------- | ---- | ------------------- |  | --------- | ----- |  |  |  | --------- |  |  | - | ----- | 
|                         |  |             |           | Options     |  |           |      |                     |  |          
|                         |  |             |           | Outstanding |  |           |      |                    
|                         |  |             |           |             |  |           |      | Options Exercisable
|                         |  |             |           | Weighted-   |  |           |      |                    
|                         |  |             |           | Average     |  | Weighted- |      |                     |  | Weighted-
|                         |  |             |           | Remaining   |  | Average   |      |                     |  | Average  
|                         |  | Number      |           | Contractual |  | Exercise  |      | Number              |  | Exercise 
|Range of Exercise Prices |  | Outstanding |           | Life        |  | Price     |      | Exercisable         |  | Price    
|                         |  |             |           |             |  |           |      |                     |  |          
|$4.86 to $10.01          |  |             | 1,286,187 |             |  |           | 3.32 |                     |  | $         | 8.12  |  |  |  | 487,442   |  |  | $ | 7.54  | 
|$10.02 to $10.81         |  |             | 854,795   |             |  |           | 5.26 |                     |  | $         | 10.15 |  |  |  | 143,745   |  |  | $ | 10.58 | 
|$11.10                   |  |             | 1,882,600 |             |  |           | 7.41 |                     |  | $         | 11.10 |  |  |  | 6,000     |  |  | $ | 11.10 | 
|$11.17 to $16.79         |  |             | 2,240,305 |             |  |           | 7.95 |                     |  | $         | 15.32 |  |  |  | 509,580   |  |  | $ | 13.48 | 
|$17.14 to $20.15         |  |             | 680,600   |             |  |           | 8.95 |                     |  | $         | 17.42 |  |  |  | 98,600    |  |  | $ | 18.90 | 
|                         |  |             |           |             |  |           |      |                     |  |           |       |  |  |  |           |  |  |   |       | 
|                         |  |             | 6,944,487 |             |  |           | 6.71 |                     |  | $         | 12.41 |  |  |  | 1,245,367 |  |  | $ | 11.24 | 
|                         |  |             |           |             |  |           |      |                     |  |           |       |  |  |  |           |  |  |   |       | 

Employee Stock Purchase Plan

Under the 1994 Employee Stock Purchase Plan, the
Company is authorized to issue up to 4.5 million shares of
common stock to full-time employees, nearly all of who are
eligible to participate. Under the terms of the Plan, employees
can choose each year to have up to 15 percent of their
annual base earnings withheld to purchase the Companys
common stock. The purchase price of the stock is 85 percent
of the lower of the beginning-of-period or end-of-period (each
period being the first and second six calendar months) market
price. Each employee is restricted to purchasing during each
period a maximum of $12,500 of stock determined by using the
beginning-of-period price. Under the Plan, the Company issued
324,155, 322,329 and 389,966 shares to 2,469, 2,475 and 2,243
employees in 2002, 2001 and 2000, respectively. Compensation cost

38



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SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

|                        |  |      |     |      |  |      |    |   |  |  |    |  
|----------------------- |  | ---- | --- | ---- |  | ---- | -- | - |  |  | -- | -
|                        |  | 2002 |     | 2001 |  | 2000
|                        |  |      |     |      |  |     
|Dividend yield          |  |      | 0   | %    |  |      | 0  | % |  |  | 0  | %
|Expected volatility     |  |      | 45  | %    |  |      | 45 | % |  |  | 45 | %
|Risk free interest rate |  |      | 1.5 | %    |  |      | 5  | % |  |  | 6  | %

The weighted-average fair value of those purchase
rights granted in 2002, 2001 and 2000 was $6.12, $5.24 and
$4.19, respectively.

(18) Income Taxes

Income tax expense consists of:

|                  |         |                |        |        |  |      |        |        |  |   |        |        | 
|----------------- | ------- | -------------- | ------ | ------ |  | ---- | ------ | ------ |  | - | ------ | ------ | 
|                  |         | 2002           |        | 2001   |  | 2000
|                  |         |                |        |        |  |     
|                  |         |               
|                  |         | (In thousands)
|Current expense:  |         |                |        |        |  |      |        |        |  |   |        |       
|                  | Federal |                | $      | 16,904 |  |      | $      | 1,095  |  |   | $      | 21,174 | 
|                  | State   |                |        | 1,000  |  |      |        | 186    |  |   |        | 2,441  | 
|                  |         |                |        |        |  |      |        |        |  |   |        |       
|                  |         |                | 17,904 |        |  |      | 1,281  |        |  |   | 23,615 |       
|                  |         |                |        |        |  |      |        |        |  |   |        |       
|Deferred expense: |         |                |        |        |  |      |        |        |  |   |        |       
|                  | Federal |                |        | 17,147 |  |      |        | 14,779 |  |   |        | 15,302 | 
|                  | State   |                |        | 1,469  |  |      |        | 2,088  |  |   |        | 2,154  | 
|                  |         |                |        |        |  |      |        |        |  |   |        |       
|                  |         |                | 18,616 |        |  |      | 16,867 |        |  |   | 17,456 |       
|                  |         |                |        |        |  |      |        |        |  |   |        |       
|                  |         | $              | 36,520 |        |  | $    | 18,148 |        |  | $ | 41,071 |       
|                  |         |                |        |        |  |      |        |        |  |   |        |       

The Companys effective tax rate was 38.0%,
40.0% and 37.3% in 2002, 2001 and 2000, 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,
|                                                        |                                                                     |                         
|                                                        |                                                                     | 2002                     |        | 2001  |  | 2000
|                                                        |                                                                     |                          |        |       |  |     
|                                                        |                                                                     |                         
|                                                        |                                                                     | (In thousands)          
|Computed expected tax expense                         |                                                                     | $                        | 33,638 |       |  | $    | 15,879 |       |   | $ | 38,505 |      
|Increase (decrease) in income taxes
    resulting from: |                                                                     |                          |        |       |  |      |        |       |   |   |        |      
|                                                        | State income taxes, net of federal income tax
    benefit           |                          |        | 2,166 |  |      |        | 1,250 |   |   |        | 2,953 |  
|                                                        | Enterprise tax credit                                               |                          |        |       |  |      |        |       |   |   |        | (443  | )
|                                                        | Nondeductible portion of Transportes EASO
    investment adjustment |                          |        |       |  |      |        | 1,951 |   |   |        |       |  
|                                                        | Other, net                                                          |                          |        | 716   |  |      |        | (932  | ) |   |        | 56    |  
|                                                        |                                                                     |                          |        |       |  |      |        |       |   |   |        |      
|                                                        |                                                                     | $                        | 36,520 |       |  | $    | 18,148 |       |   | $ | 41,071 |      
|                                                        |                                                                     |                          |        |       |  |      |        |       |   |   |        |      

39



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

|                          |                                                                            |                                |   |          |          |   |   |          |          |  
|------------------------- | -------------------------------------------------------------------------- | ------------------------------ | - | -------- | -------- | - | - | -------- | -------- | -
|                          |                                                                            |                               
|                          |                                                                            | December 31,                  
|                          |                                                                            |                               
|                          |                                                                            | 2002                           |   | 2001    
|                          |                                                                            |                                |   |         
|                          |                                                                            |                               
|                          |                                                                            | (In thousands)                
|Deferred tax assets:      |                                                                            |                                |   |          |          |   |   |         
|                          | Claims accruals                                                            |                                | $ | 56,690   |          |   | $ | 35,319   |         
|                          | Accounts receivable due to allowance for doubtful
    accounts             |                                |   | 3,820    |          |   |   | 2,183    |         
|                          | Nondeductible accruals                                                     |                                |   | 2,331    |          |   |   | 2,084    |         
|                          | Derivative financial instruments                                           |                                |   | 3,800    |          |   |   |          |         
|                          | Other                                                                      |                                |   | 2,869    |          |   |   | 4,185    |         
|                          |                                                                            |                                |   |          |          |   |   |         
|                          |                                                                            | Total deferred tax assets      |   |          | 69,510   |   |   |          | 43,771   |  
|                          |                                                                            |                                |   |          |          |   |   |         
|Deferred tax liabilities: |                                                                            |                                |   |          |          |   |   |         
|                          | Property and equipment, principally due to
    differences in depreciation |                                |   | (254,155 | )        |   |   | (204,591 | )       
|                          | Prepaid taxes, licenses and permits deducted for
    tax purposes          |                                |   | (7,266   | )        |   |   | (8,734   | )       
|                          | Contested liabilities                                                      |                                |   | (22,532  | )        |   |   |          |         
|                          | Other                                                                      |                                |   | (6,809   | )        |   |   | (12,119  | )       
|                          |                                                                            |                                |   |          |          |   |   |         
|                          |                                                                            | Total deferred tax liabilities |   |          | (290,762 | ) |   |          | (225,444 | )
|                          |                                                                            |                                |   |          |          |   |   |         
|                          |                                                                            | Net deferred tax liability     |   | $        | (221,252 | ) |   | $        | (181,673 | )
|                          |                                                                            |                                |   |          |          |   |   |         

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

|                                  |  |                |          |      |  |   |          |  
|--------------------------------- |  | -------------- | -------- | ---- |  | - | -------- | -
|                                  |  |               
|                                  |  | December 31,  
|                                  |  |               
|                                  |  | 2002           |          | 2001
|                                  |  |                |          |     
|                                  |  |               
|                                  |  | (In thousands)
|Current deferred tax asset        |  | $              | 2,262    |      |  | $ | 13,932   |  
|Noncurrent deferred tax liability |  |                | (223,514 | )    |  |   | (195,605 | )
|                                  |  |                |          |      |  |   |          |  
|Net deferred tax liability        |  | $              | (221,252 | )    |  | $ | (181,673 | )
|                                  |  |                |          |      |  |   |          |  

(19) Settlement of Litigation

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

40



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(20) Claims Accruals

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

Claims accruals represent accruals for the
uninsured portion of pending claims at December 31, 2002
and 2001. 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.

(21) Fair Value of Financial
Instruments

Statement of Financial Accounting Standards
No. 107, Disclosures about Fair Value of Financial
Instruments, requires that the Company disclose estimated
fair values for its financial instruments. The following summary
presents a description of the methodologies and assumptions used
to determine such amounts.

Accounts Receivables and Payables

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

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

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

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, 2002, the amounts that will
actually be realized or paid at settlement or maturity of the
instruments could be significantly different.

(22) 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 $6.0 million,
$6.5 million and $5.7 million for 2002, 2001 and 2000,
respectively.

41



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(23) Related Party Transactions

A company owned by Swifts principal
stockholder leases tractors to some of Swifts owner
operators. In connection with this program in 2002, 2001 and
2000, Swift acquired new tractors and sold them to this entity
for $35.7 million, $27.6 million and
$25.2 million, respectively, and recognized fee income of
$1.3 million, $1.0 million and $1.4 million,
respectively. During 2002, 2001 and 2000, Swift also sold used
revenue equipment to this entity totaling $1.1 million,
$20,000 and $160,000 respectively, and recognized a gain of
$83,000 in 2002 and a loss of $1,000 and $12,000 in 2001 and
2000, respectively. At December 31, 2002 and 2001, nothing
was owed to Swift for this equipment.

A company owned by the principal stockholder
provides aircraft services to Swift. Such services totaled
$764,000, $860,000 and $718,000 for the years ended
December 31, 2002, 2001 and 2000, respectively. At
December 31, 2002 and 2001, $48,000 and $60,000,
respectively, was owed to this entity for such services.

The Companys principal stockholder acquired
a significant ownership interest in a less-than-truckload
carrier during 1997. The Company provides transportation and
other services to this carrier and other entities owned by the
principal stockholder and recognized $20.8 million,
$11.2 million and $9.7 million in operating revenue in
2002, 2001 and 2000, respectively. At December 31, 2002 and
2001, $2.9 million and $986,000, respectively, was owed to
the Company for these services. In addition, the Company paid
$417,000, $492,000 and $547,000 to the carrier for facilities
rental in 2002, 2001 and 2000, respectively.

The Companys principal stockholder owns an
entity with a fleet of tractors, which operates as a fleet
operator for the Company. During 2002, 2001 and 2000, the
Company paid $23.4 million, $26.8 million and
$33.6 million to this fleet operator for purchased
transportation services. At December 31, 2002 and 2001,
$131,000 and $376,000, respectively, was owed for these
purchased transportation services. Also, the Company was paid
$4.2 million, $3.6 million and $1.9 million by
this fleet operator and paid $116,000, 104,000, and $130,000 to
this fleet operator for various services including training in
2002, 2001 and 2000, respectively. At December 31, 2002 and
2001, $592,000 and $741,000, respectively, was owed to the
Company and zero was owed by the Company for these services.

The Company purchased $4.3 million and
$466,000 of refrigeration units and parts in 2002 and 2001,
respectively, from an entity owned by one of the Companys
officers.

One of the Companys directors is the Chief
Executive Officer of an entity, which provides financial
services to the Company. Such services totaled zero, $381,000
and $505,000 for the years ended December 31, 2002, 2001
and 2000, respectively. At December 31, 2002 and 2001,
nothing was owed to this entity for such services.

The Company provides transportation services to
Transplace and recognized $57.1 million, $61.4 million
and $33.4 million in operating revenue in 2002, 2001 and
2000, respectively. At December 31, 2002 and 2001,
$5.8 million and $6.8 million, respectively, was owed
to the Company for these services.

The Company provides transportation, repair and
other services to Simon Transportation Services, Inc., which is
majority owned by the Companys principal stockholder. The
Company recognized $380,000, $944,000 and $30,000 in operating
revenue in 2002, 2001 and 2000, respectively, related to the
services provided. At December 31, 2002 and 2001, nothing
and $102,000, respectively, was owed to the Company for these
services.

During 2002, 2001 and 2000, Swift incurred fees
for legal services to Scudder Law Firm in the amount of
approximately $123,000, $337,000 and $209,000, respectively.
Mr. Earl Scudder, a director of Swift, is a member of
Scudder Law Firm.

42



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##### Table of Contents



SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

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

(24) Contingencies

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

(25) Industry Segment
Information

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

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

|                    |             |                         |           |           |   |   |           |           | 
|------------------- | ----------- | ----------------------- | --------- | --------- | - | - | --------- | --------- | 
|                    |             |                        
|                    |             | Year Ended December 31,
|                    |             |                        
|                    |             | 2001                    |           | 2000     
|                    |             |                         |           |          
|                    |             |                        
|                    |             | (In thousands)         
|Operating revenue:  |             |                         |           |           |   |   |           |          
|                    | Swift       |                         | $         | 1,403,897 |   |   | $         | 1,258,671 | 
|                    | MS Carriers |                         |           | 708,324   |   |   |           | 715,168   | 
|                    |             |                         |           |           |   |   |           |          
|                    |             | $                       | 2,112,221 |           |   | $ | 1,973,839 |          
|                    |             |                         |           |           |   |   |           |          
|Net earning (loss): |             |                         |           |           |   |   |           |          
|                    | Swift       |                         | $         | 42,645    |   |   | $         | 52,601    | 
|                    | MS Carriers |                         |           | (15,424   | ) |   |           | 16,342    | 
|                    |             |                         |           |           |   |   |           |          
|                    |             | $                       | 27,221    |           |   | $ | 68,943    |          
|                    |             |                         |           |           |   |   |           |          

(26) Quarterly Results of Operations
(Unaudited)

|                             |  |                                   |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|---------------------------- |  | --------------------------------- | ------- | ------- |  | ------- | ------- | ------- |  | - | ------- |  |  | - | ------- | 
|                             |  | First                             |         | Second  |  | Third   |         | Fourth 
|                             |  | Quarter                           |         | Quarter |  | Quarter |         | Quarter
|                             |  |                                   |         |         |  |         |         |        
|                             |  |                                  
|                             |  | (In thousands, except share data)
|Year Ended December 31, 2002 |  |                                   |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|Operating revenue            |  | $                                 | 475,780 |         |  | $       | 528,595 |         |  | $ | 536,955 |  |  | $ | 560,142 | 
|Operating income             |  |                                   | 17,752  |         |  |         | 35,766  |         |  |   | 33,601  |  |  |   | 30,020  | 
|Net earnings                 |  |                                   | 9,410   |         |  |         | 17,682  |         |  |   | 16,340  |  |  |   | 16,156  | 
|Basic earnings per share     |  |                                   | .11     |         |  |         | .20     |         |  |   | .19     |  |  |   | .19     | 
|Diluted earnings per share   |  |                                   | .11     |         |  |         | .20     |         |  |   | .19     |  |  |   | .19     | 

43



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SWIFT TRANSPORTATION CO., INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                             |  |                                   |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|---------------------------- |  | --------------------------------- | ------- | ------- |  | ------- | ------- | ------- |  | - | ------- |  |  | - | ------- | 
|                             |  | First                             |         | Second  |  | Third   |         | Fourth 
|                             |  | Quarter                           |         | Quarter |  | Quarter |         | Quarter
|                             |  |                                   |         |         |  |         |         |        
|                             |  |                                  
|                             |  | (In thousands, except share data)
|Year Ended December 31, 2001 |  |                                   |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|Operating revenue            |  | $                                 | 509,594 |         |  | $       | 535,555 |         |  | $ | 536,379 |  |  | $ | 530,693 | 
|Operating income             |  |                                   | 13,677  |         |  |         | 24,123  |         |  |   | 25,203  |  |  |   | 24,621  | 
|Net earnings                 |  |                                   | 259     |         |  |         | 11,131  |         |  |   | 2,787   |  |  |   | 13,044  | 
|Basic earnings per share     |  |                                   | .00     |         |  |         | .13     |         |  |   | .03     |  |  |   | .15     | 
|Diluted earnings per share   |  |                                   | .00     |         |  |         | .13     |         |  |   | .03     |  |  |   | .15     | 

(27) Subsequent Event

In February 2003, the Company entered into a
settlement of a personal injury action arising out of a motor
vehicle accident involving one of its trucks. The accident
occurred during a brief period when Swift was in a dispute with
its excess insurance carrier and its policy limits were lower
than historical and current levels. The settlement exceeds the
Companys coverage for this limited period by
$6.25 million. Although the Company has requested that its
insurance broker contribute to the shortfall in coverage in
connection with this matter, the previously unrecorded
$6.25 million has been reflected in the balance sheet as an
accrued liability as of December 31, 2002 and a
corresponding expense in the results of operations for the year
ended December 31, 2002.

44



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##### Table of Contents








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

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




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
2003 Annual Meeting of Stockholders (the 2003 Notice and
Proxy Statement) incorporated by reference into this
Form 10-K Report. With the exception of the foregoing
information and other information specifically incorporated by
reference into this Form 10-K Report, the Registrants
2003 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
2003 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 2003 Notice and Proxy Statement are
not incorporated by reference herein.






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

Information with respect to security ownership of
certain beneficial owners and management is included under the
caption Security Ownership of Principal Stockholders and
Management and Related Stockholder Matters in the 2003
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 2003 Notice and Proxy Statement and
is incorporated herein by reference.






|         |                        
|-------- | -----------------------
|Item 14. | Controls and Procedures

Within the 90 days prior to the date of this
report, the Company carried out an evaluation, under the
supervision and with the participation of the Companys
management, including the Companys Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design
and operation of the Companys disclosure controls and
procedures, as defined in Exchange Act Rule 15d-14(c).
Based upon that evaluation, the Companys Chief Executive
Officer and Chief Financial Officer concluded that the
Companys disclosure controls and procedures are effective
in enabling the Company to record, process, summarize, and
report information required to be included in the Companys
periodic SEC filings within the required time period. There have
been no significant changes in the Companys internal
controls or in other factors that could significantly affect
internal controls subsequent to the date the Company carried out
its evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.






|         |                                           
|-------- | ------------------------------------------
|Item 15. | Principal Accountant Fees and
    Services

Information with respect to the fees and services
of our principal accountant is included under the caption
Principal Accountant Fees and Services in the 2003
Notice and Proxy Statement and is incorporated herein by
reference.

45



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##### Table of Contents






PART IV






|         |                                                                    
|-------- | -------------------------------------------------------------------
|Item 16. | 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 23    | 
|(2) |  | Consolidated Financial Statements and Notes to
    Consolidated Financial Statements of the Company, including
    Consolidated Balance Sheets as of December 31, 2002 and
    2001 and related Consolidated Statements of Earnings,
    Stockholders Equity and Cash Flows for each of the years
    in the three-year period ended December 31, 2002 |  |                  | Page 24-44 | 



| |                                   
| | ----------------------------------
| | (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



| |                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On November 26, 2002, the Company filed a
    Current Report on Form 8-K regarding the announcement that
    it had entered a $255 million revolving credit agreement
    with a group of seven banks.

(c) Exhibits.

|        |     |             |  |                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                           
|------- | --- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |             |  | Page or                                                                                                                                                                                                                                                                               
|Number  |     | Description |  | Method of Filing                                                                                                                                                                                                                                                                      
|        |     |             |  |                                                                                                                                                                                                                                                                                       
|        | 2.1 |             |  | Merger Agreement, dated as of December 11,
    2000, among Swift Transportation Co., Inc., a Nevada
    corporation, Sun Merger, Inc., a Tennessee corporation and
    wholly-owned subsidiary of Swift Transportation Co., Inc., and
    M.S. Carriers, Inc., a Tennessee corporation |  | Incorporated by reference to Exhibit 2.1 of
    the Registrants Current Report on Form 8-K dated
    December 11, 2000 (the 12/11/2000 8-K)            
|        | 3.1 |             |  | Amended and Restated Articles of Incorporation of
    the Registrant                                                                                                                                                                                                                   |  | Incorporated by reference to Exhibit 4.1 of
    the Registrants Registration Statement on Form S-8
    (Registration No. 333-85940)                      
|        | 3.2 |             |  | Bylaws of the Registrant                                                                                                                                                                                                                                                               |  | Incorporated by reference to Exhibit 3.2 of
    the Registrants Registration Statement on Form S-3
    (Registration No. 33-66034)                       
|        | 4.1 |             |  | Specimen of Common Stock Certificate                                                                                                                                                                                                                                                   |  | Incorporated by reference to Exhibit 4 of
    the Companys Annual Report on Form 10-K for the year
    ended December 31, 1992 (the 1992
    Form 10-K)
|        | 4.1 |             |  | Voting Agreement, dated as of December 11,
    2000, between M. S. Carriers, Inc., a Tennessee corporation, the
    Jerry and Vickie Moyes Family Trust dated 12/11/87 and Jerry
    Moyes                                                                                             |  | Incorporated by reference to Exhibit 4.1 of
    the 12/11/2000 8-K                                                                                        

46



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                    
|------- | ----- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |             |  | Page or                                                                                                                                                                                                                                                                                                             
|Number  |       | Description |  | Method of Filing                                                                                                                                                                                                                                                                                                    
|        |       |             |  |                                                                                                                                                                                                                                                                                                                     
|        | 4.2   |             |  | Voting Agreement, dated as of December 11,
    2000, among Swift Transportation Co., Inc., a Nevada
    corporation, Sun Merger, Inc., a Tennessee corporation and
    wholly-owned subsidiary of Swift Transportation Co., Inc., and
    Michael S. Starnes                                                         |  | Incorporated by reference to Exhibit 4.2 of
    the 12/11/2000 8-K                                                                                                                 
|        | 10.1  |             |  | Stock Option Plan, as amended through
    November 18, 1994*                                                                                                                                                                                                                                                         |  | Incorporated by Reference to Exhibit 10.7 of
    the Companys Annual Report on Form 10-K for the year
    ended December 31, 1994 (the 1994
    Form 10-K)                      
|        | 10.2  |             |  | Non-Employee Directors Stock Option Plan, as
    amended through November 18, 1994*                                                                                                                                                                                                                                  |  | Incorporated by reference to Exhibit 10.8 of
    the 1994 Form 10-K                                                                                                                
|        | 10.3  |             |  | Employee Stock Purchase Plan, as amended through
    November 18, 1994*                                                                                                                                                                                                                                              |  | Incorporated by reference to Exhibit 10.9 of
    the 1994 Form 10-K                                                                                                                
|        | 10.4  |             |  | Swift Transportation Co., Inc. Retirement
    (401(k)) Plan dated January 1, 1992*                                                                                                                                                                                                                                   |  | Incorporated by reference to Exhibit 10.14
    of the Companys Form S-1 Registration Statement
    No. #33-52454                                                                  
|        | 10.5  |             |  | Note agreement dated February 26, 1996 by
    and between Swift Transportation Co., Inc. and Great-West Life
    & Annuity Insurance Company                                                                                                                                                                         |  | Incorporated by reference to Exhibit 10.12 of the
    Companys Annual Report on Company Form 10-K for the
    year ended December 31, 1995 (the 1995
    Form 10-K)             
|        | 10.6  |             |  | Note agreement dated January 16, 1997 by and
    between Swift Transportation Co., Inc. and Wells Fargo Bank,
    N.A., ABN Amro Bank N.V., The Chase Manhattan Bank and The First
    National Bank of Chicago                                                                                                      |  | Incorporated by reference to Exhibit 10.11
    of the Companys Annual Report on Form 10-K for the
    year ended December 31, 1996 (the 1996
    Form 10-K)                     
|        | 10.7  |             |  | Asset Purchase Agreement Dated as of
    February 20, 1997 Among Swift Transportation Co., Inc. and
    Direct Transit, Inc. and Charles G. Peterson                                                                                                                                                                 |  | Incorporated by reference to Exhibit 1 of
    the Companys Current Report on Form 8-K dated
    April 8, 1997 (the 4/8/97 8-K)                                                  
|        | 10.8  |             |  | First Modification Agreement to Note Agreement
    dated January 16, 1997 by and between Swift Transportation
    Co., Inc. and Wells Fargo Bank, N.A., ABN Amro Bank N.V., The
    Chase Manhattan Bank and The First National Bank of Chicago                                                                      |  | Incorporated by Reference to Exhibit 10.13
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 1998 (the 1998 Third
    Quarter Form 10-Q)
|        | 10.9  |             |  | Second Modification Agreement to Note Agreement
    dated January 17, 1997 by and between Swift Transportation
    Co., Inc. and Wells Fargo Bank, N.V., ABN Amro Bank N.V., The
    First National Bank of Chicago, Norwest Bank Arizona, N.A.,
    Keybank National Association and Union Bank of California, N.A. |  | Incorporated by reference to Exhibit 10.14
    of the 1998 Third Quarter Form 10-Q                                                                                                 
|        | 10.10 |             |  | 1999 Stock Option Plan, as amended*                                                                                                                                                                                                                                                                                  |  | Incorporated by reference to Exhibit 4.3 of
    the Registrants Registration Statement on Form S-8
    (Registration No. 333-53566)                                               
|        | 10.11 |             |  | Non-Employee Directors Stock Option Plan (Amended
    and Restated as of June 7, 2000)*                                                                                                                                                                                                                              |  | Incorporated by reference to Notice and Proxy
    Statement For Annual Meeting of Stockholders to be held on
    June 7, 2000 (the 2000 Proxy Statement)                         

47



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                
|------- | ----- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |             |  | Page or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Number  |       | Description |  | Method of Filing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10.12 |             |  | Receivables Sales Agreement Dated As Of
    December 30, 1999 Among Swift Receivables Corporation,
    Swift Transportation Corporation, Form ABN AMRO Bank N.V.,
    and Amsterdam Funding Corporation                                                                                                                                                                                                                                                                                                     |  | Incorporated by reference to Exhibit 10.16
    of the Companys Annual Report on Form 10-K for the
    year ended December 31, 1999 (the 1999 10-K)                          
|        | 10.13 |             |  | Purchase and Sale Agreement Dated
    December 30, 1999 between Swift Transportation Corporation
    and Swift Receivables Corporation                                                                                                                                                                                                                                                                                                                                                                      |  | Incorporated by reference to Exhibit 10.17
    of the 1999 Form 10-K                                                                                                           
|        | 10.14 |             |  | Nonqualified Deferred Compensation Agreement*                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2000 (the 2000 First Quarter
    Form 10-Q)
|        | 10.15 |             |  | Operating Agreement of Transplace.com, LLC                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Incorporated by reference to Exhibit 10.19
    of the 2000 First Quarter Form 10-Q                                                                                             
|        | 10.16 |             |  | Initial Subscription Agreement of Transplace.com,
    LLC                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | Incorporated by reference to Exhibit 10.20
    of the 2000 First Quarter Form 10-Q                                                                                             
|        | 10.17 |             |  | Second Amendment Dated December 27, 2001 to
    Receivables Sale Agreement Dated As Of December 30, 1999
    Among Swift Receivables Corporation, Swift Transportation
    Corporation, ABN AMRO Bank N.V., and Amsterdam Funding
    Corporation                                                                                                                                                                                                                                                           |  | Incorporated by reference to Exhibit 10.17
    of the Companys Annual Report on Form 10-K for the
    year ended December 31, 2001 (the 2001
    Form 10-K)                 
|        | 10.18 |             |  | Swift Transportation Corporation Deferred
    Compensation Plan*                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2002 (the 2002 First Quarter
    Form 10-Q)
|        | 10.19 |             |  | Offer of Employment Letter to Gary Enzor                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2002 (the 2002 Second Quarter
    Form 10-Q)
|        | 10.20 |             |  | Revolving Credit Agreement, dated as of
    November 21, 2002, among Swift Transportation Co., Inc., an
    Arizona corporation, as Borrower, Swift Transportation Co.,
    Inc., a Nevada corporation, as Holdings, the Lenders from time
    to time party hereto, SunTrust Bank, as Administrative Agent,
    Wells Fargo Bank, N.A. and KeyBank National Association, as
    Co-Syndication Agents, and U.S. Bank National Association and
    LaSalle National Association, as Co-Documentation Agents |  | Incorporated by reference to Exhibit 10.1 of
    the Companys Current Report on Form 8-K dated
    November 25, 2002 (the 11/25/02 8-K)                                     
|        | 10.21 |             |  | Fourth Amendment Dated December 26, 2002 to
    Receivables Sale Agreement Dated As Of December 30, 1999
    Among Swift Receivables Corporation, Swift Transportation
    Corporation, ABN AMRO Bank N.V., and Amsterdam Funding
    Corporation                                                                                                                                                                                                                                                           |  | Filed herewith                                                                                                                                                                 
|        | 21    |             |  | Subsidiaries of Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Filed herewith                                                                                                                                                                 
|        | 23.1  |             |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | Filed herewith                                                                                                                                                                 

48



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##### Table of Contents



|        |      |             |  |                                                                                                                                              |  |               
|------- | ---- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------
|Exhibit |      |             |  | Page or                                                                                                                                     
|Number  |      | Description |  | Method of Filing                                                                                                                            
|        |      |             |  |                                                                                                                                             
|        | 23.2 |             |  | Consent of Ernst & Young LLP                                                                                                                 |  | Filed herewith
|        | 99.1 |             |  | Report of Ernst & Young LLP                                                                                                                  |  | Filed herewith
|        | 99.2 |             |  | Certification Pursuant to 18 U.S.C.
    Section 1350, as Adopted Pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002  Jerry Moyes |  | Filed herewith
|        | 99.3 |             |  | Certification Pursuant to 18 U.S.C.
    Section 1350, as Adopted Pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002  Gary Enzor  |  | Filed herewith



---



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

49



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report on Form 10-K to be signed on
its behalf by the undersigned, thereunto duly authorized, this
26th day of March, 2003.



| |                                
| | -------------------------------
| | SWIFT TRANSPORTATION CO., INC.,
| | A NEVADA CORPORATION           



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

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

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

|                                             |  |                                                                                                |  |                |  | 
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------------- |  | -------------- |  | 
|                                             |  |                                                                                                |  |               
|Signature                                    |  | Title                                                                                          |  | Date          
|                                             |  |                                                                                                |  |               
|                                            
|/s/ JERRY C. MOYESJerry C. Moyes             |  | Chairman of the Board, President and Chief
    Executive Officer (Principal Executive Officer) |  | March 26, 2003
|                                            
|/s/ WILLIAM F. RILEY IIIWilliam F. Riley III |  | Senior Executive Vice President, Secretary, and
    Director                                   |  | March 26, 2003
|                                            
|/s/ LOU A. EDWARDSLou A. Edwards             |  | Director                                                                                       |  | March 26, 2003
|                                            
|/s/ ALPHONSE E. FREIAlphonse E. Frei         |  | Director                                                                                       |  | March 26, 2003
|                                            
|/s/ EDWARD A. LABRY IIIEdward A. Labry, III  |  | Director                                                                                       |  | March 27, 2003
|                                            
|/s/ EARL H. SCUDDEREarl H. Scudder           |  | Director                                                                                       |  | March 26, 2003
|                                            
|/s/ MICHAEL S. STARNESMichael S. Starnes     |  | Director                                                                                       |  | March 26, 2003
|                                            
|/s/ GARY R. ENZORGary R. Enzor               |  | Chief Financial Officer                                                                        |  | March 26, 2003
|                                            
|/s/ STEPHEN R. ATTWOODStephen R. Attwood     |  | Corporate Controller                                                                           |  | March 26, 2003

50



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##### Table of Contents



CERTIFICATIONS

I, Jerry Moyes, certify that:



| |                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.     I have reviewed
    this annual report on Form 10-K of Swift Transportation
    Co., Inc.;                                                                                                                                                                                                                                                      
|
| | 2.     Based on my
    knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact
    necessary to make the statements made, in light of the
    circumstances under which such statements were made, not
    misleading with respect to the period covered by this annual
    report;
|
| | 3.     Based on my
    knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in
    all material respects the financial condition, results of
    operations and cash flows of the registrant as of, and for, the
    periods presented in this annual report;                       
|
| | 4.     The
    registrants other certifying officers and I are
    responsible for establishing and maintaining disclosure controls
    and procedures (as defined in Exchange Act Rules 13a-14 and
    15d-14) for the registrant and we have:                                                                                                       



| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this annual report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this annual report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



| |                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5.     The
    registrants other certifying officers and I have
    disclosed, based on our most recent evaluation, to the
    registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls;                                                                                                                                                        



| |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6.     The
    registrants other certifying officers and I have indicated
    in this annual report whether or not there were significant
    changes in internal controls or in other factors that could
    significantly affect internal controls subsequent to the date of
    our most recent evaluation, including any corrective actions
    with regard to significant deficiencies and material weaknesses.



| |                                          
| | -----------------------------------------
| | /s/ JERRY MOYES                          
| |                                          
| | Jerry Moyes                              
| | President and Chief Executive
    Officer
| | (Principal Executive Officer)            

Date: March 26, 2003

51



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##### Table of Contents



I, Gary Enzor, certify that:



| |                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.     I have reviewed
    this annual report on Form 10-K of Swift Transportation
    Co., Inc.;                                                                                                                                                                                                                                                      
|
| | 2.     Based on my
    knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact
    necessary to make the statements made, in light of the
    circumstances under which such statements were made, not
    misleading with respect to the period covered by this annual
    report;
|
| | 3.     Based on my
    knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in
    all material respects the financial condition, results of
    operations and cash flows of the registrant as of, and for, the
    periods presented in this annual report;                       
|
| | 4.     The
    registrants other certifying officers and I are
    responsible for establishing and maintaining disclosure controls
    and procedures (as defined in Exchange Act Rules 13a-14 and
    15d-14) for the registrant and we have:                                                                                                       



| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this annual report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this annual report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



| |                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5.     The
    registrants other certifying officers and I have
    disclosed, based on our most recent evaluation, to the
    registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls;                                                                                                                                                        



| |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6.     The
    registrants other certifying officers and I have indicated
    in this annual report whether or not there were significant
    changes in internal controls or in other factors that could
    significantly affect internal controls subsequent to the date of
    our most recent evaluation, including any corrective actions
    with regard to significant deficiencies and material weaknesses.



| |                              
| | -----------------------------
| | /s/ GARY ENZOR               
| |                              
| | Gary Enzor                   
| | Chief Financial Officer      
| | (Principal Financial Officer)

Date: March 26, 2003

52



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##### Table of Contents






EXHIBIT INDEX

|        |      |             |  |                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                       
|------- | ---- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |             |  | Page or                                                                                                                                                                                                                                                                               
|Number  |      | Description |  | Method of Filing                                                                                                                                                                                                                                                                      
|        |      |             |  |                                                                                                                                                                                                                                                                                       
|        | 2.1  |             |  | Merger Agreement, dated as of December 11,
    2000, among Swift Transportation Co., Inc., a Nevada
    corporation, Sun Merger, Inc., a Tennessee corporation and
    wholly-owned subsidiary of Swift Transportation Co., Inc., and
    M.S. Carriers, Inc., a Tennessee corporation |  | Incorporated by reference to Exhibit 2.1 of
    the Registrants Current Report on Form 8-K dated
    December 11, 2000 (the 12/11/2000 8-K)                        
|        | 3.1  |             |  | Amended and Restated Articles of Incorporation of
    the Registrant                                                                                                                                                                                                                   |  | Incorporated by reference to Exhibit 4.1 of
    the Registrants Registration Statement on Form S-8
    (Registration No. 333-85940)                                  
|        | 3.2  |             |  | Bylaws of the Registrant                                                                                                                                                                                                                                                               |  | Incorporated by reference to Exhibit 3.2 of
    the Registrants Registration Statement on Form S-3
    (Registration No. 33-66034)                                   
|        | 4.1  |             |  | Specimen of Common Stock Certificate                                                                                                                                                                                                                                                   |  | Incorporated by reference to Exhibit 4 of
    the Companys Annual Report on Form 10-K for the year
    ended December 31, 1992 (the 1992
    Form 10-K)            
|        | 4.1  |             |  | Voting Agreement, dated as of December 11,
    2000, between M. S. Carriers, Inc., a Tennessee corporation, the
    Jerry and Vickie Moyes Family Trust dated 12/11/87 and Jerry
    Moyes                                                                                             |  | Incorporated by reference to Exhibit 4.1 of
    the 12/11/2000 8-K                                                                                                    
|        | 4.2  |             |  | Voting Agreement, dated as of December 11,
    2000, among Swift Transportation Co., Inc., a Nevada
    corporation, Sun Merger, Inc., a Tennessee corporation and
    wholly-owned subsidiary of Swift Transportation Co., Inc., and
    Michael S. Starnes                           |  | Incorporated by reference to Exhibit 4.2 of
    the 12/11/2000 8-K                                                                                                    
|        | 10.1 |             |  | Stock Option Plan, as amended through
    November 18, 1994*                                                                                                                                                                                                                           |  | Incorporated by Reference to Exhibit 10.7 of
    the Companys Annual Report on Form 10-K for the year
    ended December 31, 1994 (the 1994
    Form 10-K)         
|        | 10.2 |             |  | Non-Employee Directors Stock Option Plan, as
    amended through November 18, 1994*                                                                                                                                                                                                    |  | Incorporated by reference to Exhibit 10.8 of
    the 1994 Form 10-K                                                                                                   
|        | 10.3 |             |  | Employee Stock Purchase Plan, as amended through
    November 18, 1994*                                                                                                                                                                                                                |  | Incorporated by reference to Exhibit 10.9 of
    the 1994 Form 10-K                                                                                                   
|        | 10.4 |             |  | Swift Transportation Co., Inc. Retirement
    (401(k)) Plan dated January 1, 1992*                                                                                                                                                                                                     |  | Incorporated by reference to Exhibit 10.14
    of the Companys Form S-1 Registration Statement
    No. #33-52454                                                     
|        | 10.5 |             |  | Note agreement dated February 26, 1996 by
    and between Swift Transportation Co., Inc. and Great-West Life
    & Annuity Insurance Company                                                                                                                                           |  | Incorporated by reference to Exhibit 10.12
    of the Companys Annual Report on Company Form 10-K
    for the year ended December 31, 1995 (the 1995
    Form 10-K)
|        | 10.6 |             |  | Note agreement dated January 16, 1997 by and
    between Swift Transportation Co., Inc. and Wells Fargo Bank,
    N.A., ABN Amro Bank N.V., The Chase Manhattan Bank and The First
    National Bank of Chicago                                                                        |  | Incorporated by reference to Exhibit 10.11
    of the Companys Annual Report on Form 10-K for the
    year ended December 31, 1996 (the 1996
    Form 10-K)        
|        | 10.7 |             |  | Asset Purchase Agreement Dated as of
    February 20, 1997 Among Swift Transportation Co., Inc. and
    Direct Transit, Inc. and Charles G. Peterson                                                                                                                                   |  | Incorporated by reference to Exhibit 1 of
    the Companys Current Report on Form 8-K dated
    April 8, 1997 (the 4/8/97 8-K)                                     



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                    
|------- | ----- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |             |  | Page or                                                                                                                                                                                                                                                                                                             
|Number  |       | Description |  | Method of Filing                                                                                                                                                                                                                                                                                                    
|        |       |             |  |                                                                                                                                                                                                                                                                                                                     
|        | 10.8  |             |  | First Modification Agreement to Note Agreement
    dated January 16, 1997 by and between Swift Transportation
    Co., Inc. and Wells Fargo Bank, N.A., ABN Amro Bank N.V., The
    Chase Manhattan Bank and The First National Bank of Chicago                                                                      |  | Incorporated by Reference to Exhibit 10.13
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 1998 (the 1998 Third
    Quarter Form 10-Q)
|        | 10.9  |             |  | Second Modification Agreement to Note Agreement
    dated January 17, 1997 by and between Swift Transportation
    Co., Inc. and Wells Fargo Bank, N.V., ABN Amro Bank N.V., The
    First National Bank of Chicago, Norwest Bank Arizona, N.A.,
    Keybank National Association and Union Bank of California, N.A. |  | Incorporated by reference to Exhibit 10.14
    of the 1998 Third Quarter Form 10-Q                                                                                                 
|        | 10.10 |             |  | 1999 Stock Option Plan, as amended*                                                                                                                                                                                                                                                                                  |  | Incorporated by reference to Exhibit 4.3 of
    the Registrants Registration Statement on Form S-8
    (Registration No. 333-53566)                                               
|        | 10.11 |             |  | Non-Employee Directors Stock Option Plan (Amended
    and Restated as of June 7, 2000)*                                                                                                                                                                                                                              |  | Incorporated by reference to Notice and Proxy
    Statement For Annual Meeting of Stockholders to be held on
    June 7, 2000 (the 2000 Proxy Statement)                         
|        | 10.12 |             |  | Receivables Sales Agreement Dated As Of
    December 30, 1999 Among Swift Receivables Corporation,
    Swift Transportation Corporation, Form ABN AMRO Bank N.V.,
    and Amsterdam Funding Corporation                                                                                                              |  | Incorporated by reference to Exhibit 10.16
    of the Companys Annual Report on Form 10-K for the
    year ended December 31, 1999 (the 1999 10-K)                              
|        | 10.13 |             |  | Purchase and Sale Agreement Dated
    December 30, 1999 between Swift Transportation Corporation
    and Swift Receivables Corporation                                                                                                                                                                               |  | Incorporated by reference to Exhibit 10.17
    of the 1999 Form 10-K                                                                                                               
|        | 10.14 |             |  | Nonqualified Deferred Compensation Agreement*                                                                                                                                                                                                                                                                        |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2000 (the 2000 First Quarter
    Form 10-Q)    
|        | 10.15 |             |  | Operating Agreement of Transplace.com, LLC                                                                                                                                                                                                                                                                           |  | Incorporated by reference to Exhibit 10.19
    of the 2000 First Quarter Form 10-Q                                                                                                 
|        | 10.16 |             |  | Initial Subscription Agreement of Transplace.com,
    LLC                                                                                                                                                                                                                                                            |  | Incorporated by reference to Exhibit 10.20
    of the 2000 First Quarter Form 10-Q                                                                                                 
|        | 10.17 |             |  | Second Amendment Dated December 27, 2001 to
    Receivables Sale Agreement Dated As Of December 30, 1999
    Among Swift Receivables Corporation, Swift Transportation
    Corporation, ABN AMRO Bank N.V., and Amsterdam Funding
    Corporation                                                                    |  | Incorporated by reference to Exhibit 10.17
    of the Companys Annual Report on Form 10-K for the
    year ended December 31, 2001 (the 2001
    Form 10-K)                     
|        | 10.18 |             |  | Swift Transportation Corporation Deferred
    Compensation Plan*                                                                                                                                                                                                                                                     |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2002 (the 2002 First Quarter
    Form 10-Q)    
|        | 10.19 |             |  | Offer of Employment Letter to Gary Enzor                                                                                                                                                                                                                                                                             |  | Incorporated by reference to Exhibit 10.18
    of the Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2002 (the 2002 Second Quarter
    Form 10-Q)    



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                           
|------- | ----- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |             |  | Page or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Number  |       | Description |  | Method of Filing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10.20 |             |  | Revolving Credit Agreement, dated as of
    November 21, 2002, among Swift Transportation Co., Inc., an
    Arizona corporation, as Borrower, Swift Transportation Co.,
    Inc., a Nevada corporation, as Holdings, the Lenders from time
    to time party hereto, SunTrust Bank, as Administrative Agent,
    Wells Fargo Bank, N.A. and KeyBank National Association, as
    Co-Syndication Agents, and U.S. Bank National Association and
    LaSalle National Association, as Co-Documentation Agents |  | Incorporated by reference to Exhibit 10.1 of
    the Companys Current Report on Form 8-K dated
    November 25, 2002 (the 11/25/02 8-K)
|        | 10.21 |             |  | Fourth Amendment Dated December 26, 2002 to
    Receivables Sale Agreement Dated As Of December 30, 1999
    Among Swift Receivables Corporation, Swift Transportation
    Corporation, ABN AMRO Bank N.V., and Amsterdam Funding
    Corporation                                                                                                                                                                                                                                                           |  | Filed herewith                                                                                                                            
|        | 21    |             |  | Subsidiaries of Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Filed herewith                                                                                                                            
|        | 23.1  |             |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | Filed herewith                                                                                                                            
|        | 23.2  |             |  | Consent of Ernst & Young LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Filed herewith                                                                                                                            
|        | 99.1  |             |  | Report of Ernst & Young LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Filed herewith                                                                                                                            
|        | 99.2  |             |  | Certification Pursuant to 18 U.S.C.
    Section 1350, as Adopted Pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002  Jerry Moyes                                                                                                                                                                                                                                                                                                                                                                |  | Filed herewith                                                                                                                            
|        | 99.3  |             |  | Certification Pursuant to 18 U.S.C.
    Section 1350, as Adopted Pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002  Gary Enzor                                                                                                                                                                                                                                                                                                                                                                 |  | Filed herewith                                                                                                                            



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