---

---

# SECURITIES AND
EXCHANGE COMMISSIONWashington D. C. 20549

# Form 10-Q

|X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED APRIL
3, 2004 OR
|- | ----------------------------------------------------------------------------------------------------------------------------------------

| | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
TRANSITION PERIOD FROM___________
TO _______________
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------

# Commission File Number
0-19791

# USF CORPORATION(Exact name of
registrant as specified in its charter)

|                         |                                 
|------------------------ | --------------------------------
|Delaware                 | 36-3790696                      
|(State of Incorporation) | (IRS EmployerIdentification No.)

|                                                                            |           
|--------------------------------------------------------------------------- | ----------
|8550 W. Bryn Mawr Avenue, Suite 700                       Chicago, Illinois | 60631     
|(Address of principal executive offices)                                    | (Zip Code)

# Registrants
telephone number including area code:
(773) 824-1000

# N/A(Former name or former
address, if changed since the last report)

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

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

As of April 28, 2004, 27,718,021
shares of common stock were outstanding.

---

---



PART
I: FINANCIAL INFORMATION.

# Item 1.  Financial Statements

USF CorporationCondensed Consolidated
Balance SheetsUnaudited (Dollars in
Thousands)

|                                                                       | As of
|---------------------------------------------------------------------- | -----
|
|Assets                                                                 |      
|Current assets:                                                        |      
|Cash                                                                   |      
|                                                                       |      
|Accounts receivable, net                                               |      
|                                                                       |      
|Operating supplies and prepaid expenses                                |      
|                                                                       |      
|Deferred income taxes                                                  |      
|                                                                       |      
|Total current assets                                                   |      
|                                                                       |      
|                                                                       |      
|Property and equipment, net                                            |      
|                                                                       |      
|Goodwill                                                               |      
|                                                                       |      
|Other assets                                                           |      
|                                                                       |      
|Total Assets                                                           |      
|                                                                       |      
|                                                                       |      
|Liabilities and Stockholders' Equity                                   |      
|Current liabilities:                                                   |      
|Current debt                                                           |      
|                                                                       |      
|Accounts payable                                                       |      
|                                                                       |      
|Accrued salaries, wages and benefits                                   |      
|                                                                       |      
|Accrued claims and other                                               |      
|                                                                       |      
|Total current liabilities                                              |      
|                                                                       |      
|                                                                       |      
|Long-term liabilities                                                  |      
|Notes payable and long-term debt                                       |      
|                                                                       |      
|Accrued claims and other                                               |      
|                                                                       |      
|Deferred income taxes                                                  |      
|                                                                       |      
|Total Liabilities                                                      |      
|                                                                       |      
|Commitments and contingencies (Note 7)                                 |      
|                                                                       |      
|Total stockholders'  equity                                            |      
|                                                                       |      
|                                                                       |      
|Total Liabilites and Stockholders' Equity                              |      
|                                                                       |      
|                                                                       |      
|                                                                       |      
|See accompanying Notes to Condensed Consolidated Financial Statements.

2

---

USF CorporationCondensed Consolidated
Statements of OperationsUnaudited(Dollars in Thousands, Except Share and Per Share
Amounts)

|                                                                      | Quarter Ended
|--------------------------------------------------------------------- | -------------
|
|Revenue:                                                              |              
|LTL Trucking                                                          |              
|TL Trucking                                                           |              
|Logistics                                                             |              
|Intercompany eliminations                                             |              
|                                                                      |              
|                                                                      |              
|                                                                      |              
|Operating expenses:                                                   |              
|LTL Trucking                                                          |              
|TL Trucking                                                           |              
|Logistics                                                             |              
|Corporate and Other                                                   |              
|Intercompany eliminations                                             |              
|                                                                      |              
|                                                                      |              
|                                                                      |              
|Income from operations                                                |              
|                                                                      |              
|Non-operating income / (expense):                                     |              
|Interest expense                                                      |              
|Interest income                                                       |              
|Other, net                                                            |              
|                                                                      |              
|Net non-operating expense                                             |              
|                                                                      |              
|Income from continuing operations before income taxes and             |              
|cumulative effect of accounting change                                |              
|Income tax expense                                                    |              
|                                                                      |              
|Income from continuing operations before cumulative effect            |              
|of accounting change                                                  |              
|Loss from discontinued operations, net of tax benefits of $5          |              
|                                                                      |              
|Income before cumulative effect of accounting change                  |              
|Cumulative effect of change in accounting for revenue recognition,    |              
|net of tax benefits of $1,064                                         |              
|                                                                      |              
|Net income                                                            |              
|                                                                      |              
|Income per share from continuing operations:                          |              
|Basic                                                                 |              
|Diluted                                                               |              
|Loss per share--cumulative effect of accounting change:               |              
|Basic                                                                 |              
|Diluted                                                               |              
|Net income per share--basic                                           |              
|Net income per share--diluted                                         |              
|                                                                      |              
|Average shares outstanding--basic                                     |              
|Average shares outstanding--diluted                                   |              
|                                                                      |              
|See accompanying Notes to Condensed Consolidated Financial Statements |              

3

---

USF CorporationCondensed Consolidated
Statements of Cash FlowsUnaudited (Dollars in Thousands)

|                                                                                                                                     | Year-to-date
|------------------------------------------------------------------------------------------------------------------------------------ | ------------
|
|Cash flows from operating activities:                                                                                                |             
|Net income                                                                                                                           |             
|Net loss from discontinued operations                                                                                                |             
|                                                                                                                                     |             
|Income from continuing operations after cumulative effect of accounting change                                                       |             
|Adjustments to reconcile net income from continuing operations after accounting change to net cash provided by operating activities: |             
|                                                                                                                                     |             
|Depreciation of property and equipment                                                                                               |             
|Cumulative effect of accounting changes net of tax                                                                                   |             
|Amortization of intangible assets                                                                                                    |             
|Deferred taxes                                                                                                                       |             
|Gains on sale of property and equipment                                                                                              |             
|(Decrease) / increase in other items affecting cash from operating activities                                                        |             
|                                                                                                                                     |             
|Net cash provided by operating activities                                                                                            |             
|                                                                                                                                     |             
|Cash flows from investing activities:                                                                                                |             
|Acquisition                                                                                                                          |             
|Mexico loan                                                                                                                          |             
|Capital expenditures                                                                                                                 |             
|Proceeds from sale of property and equipment                                                                                         |             
|                                                                                                                                     |             
|Net cash used in investing activities                                                                                                |             
|                                                                                                                                     |             
|Cash flows from financing activities:                                                                                                |             
|Dividends paid                                                                                                                       |             
|Employee and director stock transactions                                                                                             |             
|Repurchase of common stock                                                                                                           |             
|Net change in short-term bank debt                                                                                                   |             
|Payments on long-term bank debt                                                                                                      |             
|                                                                                                                                     |             
|Net cash provided by / (used) in financing activities                                                                                |             
|                                                                                                                                     |             
|Net decrease in cash                                                                                                                 |             
|Cash at beginning of period                                                                                                          |             
|                                                                                                                                     |             
|Cash at end of period                                                                                                                |             
|                                                                                                                                     |             
|Supplemental disclosure of cash flow information:                                                                                    |             
|Cash paid during the period for:                                                                                                     |             
|Interest                                                                                                                             |             
|Income taxes                                                                                                                         |             
|Non-cash transactions: debt assumed in connection with acquisition                                                                   |             
|                                                                                                                                     |             
|See accompanying Notes to Condensed Consolidated Financial Statements                                                                |             

4

---

USF CorporationCondensed
Consolidated Statements of Changes in Stockholders EquityUnaudited (Dollars in
Thousands)

|                                                                      | Year-to-Date
|--------------------------------------------------------------------- | ------------
|
|Balance as of December 31, 2003 and 2002, respectively                |             
|                                                                      |             
|                                                                      |             
|Net income                                                            |             
|Foreign currency translation adjustments                              |             
|                                                                      |             
|Comprehensive income                                                  |             
|Employee and director stock transactions                              |             
|Repurchase of common stock                                            |             
|Dividends declared                                                    |             
|                                                                      |             
|                                                                      |             
|Balance as of April 3, 2004 and April 5, 2003, respectively           |             
|                                                                      |             
|                                                                      |             
|                                                                      |             
|See accompanying Notes to Condensed Consolidated Financial Statements |             

5

---

Notes to Condensed
Consolidated Financial Statements (Unaudited)(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

# 1. Summary of
Significant Accounting Policies

# Basis of Presentation

These interim financial statements of
USF Corporation have been prepared in accordance with accounting principles generally
accepted in the United States for interim financial information and the instructions to
Quarterly Reports on Form 10-Q and Rule 10-01 of Regulation S-X, and should be read in
conjunction with our Annual Report on Form 10-K for the year ended December 31, 2003.
Accordingly, significant accounting policies and other disclosures normally provided have
been omitted since such items are disclosed therein.

In our opinion, the accompanying
unaudited condensed consolidated financial statements reflect all adjustments (including
normal recurring adjustments) necessary to present fairly our consolidated financial
position as of April 3, 2004, the consolidated results of our operations for the quarters
ended April 3, 2004 and April 5, 2003, and our consolidated cash flows for the quarters
ended April 3, 2004 and April 5, 2003. Operating results for the quarter ended April 3,
2004 are not necessarily indicative of the results that may be expected for the year
ending December 31, 2004.

We report on a calendar year basis.
Our quarters consist of thirteen weeks that end on a Saturday either before or after the
end of March, June and September.

Certain reclassifications have been
made to prior year amounts to conform to the current year presentation.

# 2. Earnings Per Share

Basic earnings per share are
calculated on net income divided by the weighted-average number of common shares
outstanding during the period. Diluted earnings per share are calculated by dividing net
income by the weighted-average number of common shares outstanding plus the shares that
would have been outstanding assuming the issuance of common shares for all dilutive
potential common shares for the period. Unexercised stock options are the only reconciling
items between our basic and diluted earnings per share.

The following table presents
information necessary to calculate basic and diluted earnings per share:

|                                                                   | Quarter Ended
|------------------------------------------------------------------ | -------------
|
|Weighted-average shares outstanding--basic                         |              
|Common stock equivalents                                           |              
|                                                                   |              
|Weighted-average shares and equivalents--diluted                   |              
|                                                                   |              
|Anti-dilutive unexercised stock options excluded from calculations |              
|                                                                   |              

6

---

Notes to Condensed
Consolidated Financial Statements Continued (Unaudited)(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

# 3. Debt

Our debt includes $100,000 of
unsecured guaranteed notes due May 1, 2009 and $150,000 of unsecured guaranteed notes due
April 15, 2010.

Our guaranteed notes are fully and
unconditionally guaranteed, on a joint and several basis, and on an unsecured senior
basis, by substantially all of our direct and indirect domestic subsidiaries (the
Subsidiary Guarantors). All of the assets are owned by the Subsidiary
Guarantors and substantially all of our operations are conducted by the Subsidiary
Guarantors. Accordingly, the aggregate assets, liabilities, earnings and equity of the
Subsidiary Guarantors are substantially equivalent to the assets, liabilities, earnings
and equity shown in our consolidated financial statements. Our subsidiaries, other than
the Subsidiary Guarantors, are minor. There are no material restrictions on our ability to
obtain funds from our subsidiaries by dividend or loan. We, therefore, are not required to
present separate financial statements of our Subsidiary Guarantors, and other disclosures
relating to them.

We have a $200,000 credit facility
with a group of banks that will expire in October 2005. This facility is for working
capital, general corporate funding needs, and up to $125,000 for letters of credit under
our self-insurance program. As of April 3, 2004 we had no borrowings drawn under the
facility and $100,724 in issued letters of credit.

# 4. Goodwill and Other
Intangible Assets

The changes in carrying amounts of
goodwill by segment for the year-to-date period ended April 3, 2004 were as follows:

|                                | LTL | TL | Logistics | Total 
|------------------------------- | --- | -- | --------- | ------
|Balance as of December 31, 2003 |     |    |           | 57,273
|                                |     |    |           |       
|Additions                       |     |    |           | --    
|                                |     |    |           |       
|                                |     |    |           |       
|Balance as of April 3, 2004     |     |    | $         | 57,273
|                                |     |    |           |       

Intangible assets subject to
amortization consist of the following:

|                             |  | As of
April 3, 2004 | As of
December 31, 2003
|---------------------------- |  | ------------------- | -----------------------
|
|Amortized intangible assets: |  |                     |                        
|Customer lists               |  |                     |                        
|Non-competes                 |  |                     |                        
|                             |  |                     |                        
|Total                        |  |                     |                        
|                             |  |                     |                        

Aggregate amortization expense for
the quarters ended April 3, 2004, and April 5, 2003 was $992 and $259, respectively.

7

---

Notes to Condensed
Consolidated Financial Statements Continued (Unaudited)(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

|                                                                                       | 
|-------------------------------------------------------------------------------------- | 
|
|Estimated amortization expense for each of the years ending December 31 is as follows: | 
|Year                                                                                   | 
|2004                                                                                   | 
|2005                                                                                   | 
|2006                                                                                   | 
|                                                                                       | 
|Total                                                                                  | 
|                                                                                       | 
|                                                                                       | 

# 5. Segment Reporting

|                                                      | Quarter Ended
|----------------------------------------------------- | -------------
|
|Revenue                                               |              
|LTL Trucking                                          |              
|                                                      |              
|TL Trucking                                           |              
|                                                      |              
|Logistics                                             |              
|                                                      |              
|Intercompany eliminations                             |              
|                                                      |              
|Corporate and Other                                   |              
|                                                      |              
|Total Revenue from Continuing Operations              |              
|                                                      |              
|                                                      |              
|Income From Operations                                |              
|LTL Trucking                                          |              
|                                                      |              
|TL Trucking                                           |              
|                                                      |              
|Logistics                                             |              
|                                                      |              
|Corporate and Other                                   |              
|                                                      |              
|Income from operations                                |              
|                                                      |              
|Net non-operating expense                             |              
|                                                      |              
|                                                      |              
|Income from continuing operations before income taxes |              
|and cumulative effect of accounting change            |              
|                                                      |              

8

---

Notes to Condensed
Consolidated Financial Statements Continued (Unaudited)(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

# 6. Stock Based
Compensation

Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting for Stock Based Compensation,
establishes a fair value based method of accounting for stock options. We have elected to
continue using the intrinsic value method prescribed under Accounting Principals Board
(APB) Opinion No. 25 as permitted by SFAS No. 123. For all stock options that
have been granted, the exercise prices of the stock options were equal to the market
prices of the underlying stock on the grant dates, therefore no compensation expense was
recognized. If we had elected to recognize compensation expense based on the fair value of
the options at grant date, as prescribed by SFAS No. 123, our net income and earnings per
share would have been reduced to the pro forma amounts indicated in the table below:

|                                                                                  | Quarter Ended
|--------------------------------------------------------------------------------- | -------------
|
|Net income--as reported                                                           |              
|Less: total stock-based employee compensation expense determined under fair value |              
|based method for all awards, net of related tax effects                           |              
|                                                                                  |              
|Net income--pro forma                                                             |              
|                                                                                  |              
|Basic earnings per share--as reported                                             |              
|Basic earnings per share--pro forma                                               |              
|                                                                                  |              
|                                                                                  |              
|Diluted earnings per share--as reported                                           |              
|Diluted earnings per share--pro forma                                             |              
|                                                                                  |              

# 7. Contingencies

We are routinely involved in a number
of legal proceedings and claims arising in the ordinary course of business, primarily
involving claims for bodily injury and property damage incurred in the transportation of
freight. The estimated liability for claims included in liabilities, both current and
long-term, is $57,499 and $84,049, respectively, at April 3, 2004, and $57,146 and
$75,243, respectively, at April 5, 2003. These liabilities reflect the estimated ultimate
cost of self-insured claims incurred, but not paid, for bodily injury, property damage,
cargo loss and damage, and workers compensation. We believe the outcome of these
matters is not expected to have any material adverse effect on our consolidated financial
position or results of our operations and have been adequately provided for in our
financial statements.

We use underground storage tanks at
certain terminal facilities and maintain a comprehensive policy of testing, upgrading,
replacing or eliminating these tanks to protect the environment and comply with various
Federal and state laws. We take prompt remedial action whenever any contamination is
detected.

# 8. Acquisitions

In February 2003, we acquired the
stock of System 81 Express, Inc., a truckload carrier based in Tennessee that owned or
operated approximately 140 tractors and 260 trailers, for approximately $1,900 in cash and
$2,800 in assumed debt. In addition, contingent payments totaling $314 were subsequently
made to the former owners of System 81 Express. Goodwill and other intangible assets of
$304 and $461, respectively, were recorded under the acquisition. The acquisition
contributed approximately $3,000 to revenue for the first quarter of 2004, an increase
of $900 from the first quarter of 2003.

9

---

(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

Item 2. Managements
Discussion and Analysis of Financial Condition and Results of Operations.

# EXECUTIVE SUMMARY

We are pleased with the improvement
in our revenue and operating profit reported for the 2004 first quarter. The overall
improved economy, the increased focus on selling our USF PremierPlus® product at
competitive rates and the initial favorable impact of our best practice
initiatives were the main contributors to this quarters improvement compared to last
year. While we are pleased with our first quarter results, we are not satisfied. We
believe there are many opportunities and challenges ahead. These include ensuring that we
continue to have the necessary labor resources, adequate capacity in our terminal network
and equipment to maintain our customer service standards as business levels increase.
These issues, along with continued pricing pressures, in certain geographic areas need to
be addressed and managed. We will continue to evaluate our customer base and will shed
less profitable accounts while adding new, more profitable business. We are confident we
have the resources and plans in place to ensure these issues are addressed in a timely,
efficient and cost effective manner.

Our management team remains focused
and committed to our goals of sustainable financial success and value creation for our
shareholders

# CONSOLIDATED RESULTS

Our revenue and net income for the
quarters ended April 3, 2004 and April 5, 2003 were as follows:

|           | Quarter Ended
|---------- | -------------
|
|Revenue    |              
|Net Income |              
|           |              
|           |              

Our net income for the 2003 first
quarter was negatively impacted by $1,467 due to a change in the accounting for revenue
and expense recognition. Effective January 1, 2003, we recognize revenue for LTL and TL
operations by the allocation of revenue between reporting periods based on the relative
transit time in each reporting period with expenses recognized as incurred. This change
was made to recognize the increase in our average length of haul of freight, which
resulted from our implementation of new marketing strategies.

Our consolidated financial statements
have been restated to reflect the non-core freight forwarding segment as discontinued
operations. Unless otherwise indicated, the following discussion relates to our continuing
operations.

10

---

(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

# RESULTS OF OPERATIONS

# LTL Trucking

Our revenue, income from operations
and operating ratios for our LTL segment for the quarters ended April 3, 2004 and April 5,
2003 were as follows:

|                       | Quarter Ended
|---------------------- | -------------
|
|Total Revenue          |              
|Income from operations |              
|Operating Ratio        |              
|                       |              
|                       |              

Our LTL segment includes our LTL
operating companies, each of which generates revenue from LTL and TL shipments. Revenue
from LTL shipments represents over 90% of the revenue in the LTL segment. LTL statistics
presented in the table below exclude TL shipments.

|     |  | LTL Statistics
|---- |  | --------------
|
|2004 |  |               
|2003 |  |               
|     |  |               
|     |  |               

2004 First Quarter
Compared to 2003 First Quarter

In the 2004 first quarter our LTL
segments total revenue and income from operations increased from the 2003 first
quarter by 6.3% and 43.0%, respectively. The following provides an understanding of the
factors that impacted our operating results:

| |  | Total revenue increased 6.3% (7.9% on a daily average basis) as a result of focused sales
efforts and improving general economic conditions, particularly in the Midwest.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | USF PremierPlus® revenue increased 16.3% to $68,911 as a result of our marketing and
service efforts in inter-regional transport. USF PremierPlus® revenue represented
13.0% and 11.8% of LTL revenue in the first quarter of 2004 and 2003, respectively.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | LTL tonnage increased 6.0% (7.6% on a daily average basis), primarily as the result of the
increase in our USF PremierPlus® business.
| | - | -------------------------------------------------------------------------------------------------------------------------------------

| |  | Revenue per hundredweight decreased by 1.0% as a result of an increase in average shipment
weight of 35 pounds, along with significant growth in two large accounts that were
historically priced very aggressively.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Revenue increases and cost-savings related to our best practices initiatives,
in part, contributed to our improved operating ratio.
| | - | -------------------------------------------------------------------------------------------------------------------------------------

| |  | In order to maintain service levels with the increase in business, particularly in March,
we incurred additional expenses in overtime pay and short term equipment rentals, which
negatively impacted our operating results.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Included in the first quarter results
was a 6.6% increase in revenue at USF Holland, our largest LTL carrier. USF Holland also recorded
an improvement in their operating ratio of over 100 basis points. Also, included in the
LTL segments results was a 10% increase in revenue at USF Reddaway.

11

---

(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

# TL Trucking

|                       | Quarter Ended
|---------------------- | -------------
|
|Total Revenue          |              
|Income from operations |              
|Operating Ratio        |              
|                       |              

The following provides an
understanding of the factors that impacted our operating results:

| |  | 2004 first quarter included $3,000 in revenue from the February 2003 acquisition of System
81 Express, an increase of $900 from the 2003 first quarter.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Revenue per loaded mile, excluding fuel surcharges, increased 2.1% as a result of the
improving economy, additional accessorial billings and rate increases with selected
customers.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Operating profits improved as a result of additional revenue, reduction in empty miles and
improved driver productivity.
| | - | ------------------------------------------------------------------------------------------------------------------------

| |  | The new hours of service regulations had minimal, if any, impact on our results.
| | - | --------------------------------------------------------------------------------

# Logistics

|                       | Quarter Ended
|---------------------- | -------------
|
|Total Revenue          |              
|Income from operations |              
|Operating Ratio        |              
|                       |              

The following provides an
understanding of the factors that impacted our operating results:

| |  | Revenue decreased by $9,238 (or 12.2%) primarily due to the bankruptcy of a major customer
in the 2003 first quarter as well other lost business that occurred after the end of the
first quarter 2003. This revenue decrease was offset, in part, by increased revenue of
approximately $3,000 through increased business with existing customers as well as new
customers in our transportation management, ocean freight forwarding and Canadian
operations.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The 2003 first quarter included a bad debt write off of $2,000 related to the major
customers bankruptcy.
| | - | ----------------------------------------------------------------------------------------------------------

| |  | Adjusted for the bad debt write off, operating profits in the 2004 first quarter were $948
lower than the 2003 first quarter primarily due to a $9,238 reduction in revenue.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

---

(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

# Corporate and Other

|                  | Quarter Ended
|----------------- | -------------
|
|Corporate & Other |              
|                  |              

The following provides an
understanding of the factors that impacted our operating results:

| |  | Depreciation expense increased by $1,000 in the 2004 first quarter compared to the 2003
first quarter as a result of capital expenditures made on projects in prior years that are
now being depreciated.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Amortization  of  intangibles  increased  to $992 in 2004 from $259 due to the  acquisitions  of System 81
Express, Inc. and Plymouth Rock Transportation Corporation in 2003.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The remainder of the increase is primarily the result of consulting fees that were
incurred this quarter related to several of our revenue enhancement and best
practices initiatives, and additional employee costs that were incurred related to
management additions at the corporate office.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Non-operating Income and
Expense

Interest expense principally includes
interest on our guaranteed unsecured notes of $250,000. We had cash invested in interest
bearing instruments during the first quarter of 2004 and 2003. At the end of the first
quarter of 2004 and 2003, we had cash and cash equivalents of $118,198 and $47,298,
respectively.

# OutlookUnknown
Trends or Uncertainties

We expect improvement in our
operating results in 2004 as a result of an improved economy and our strategic
initiatives. We believe our 2004 initiatives will provide increased revenue opportunities
and generate cost savings through operational efficiencies. We believe achieving improved
operating results are dependent on us executing our strategic initiatives, the level of
competition, and the extent of the improvement in the US economy. We currently estimate
that our full year earnings per share will be in the $1.95  $2.15 range.

We have been subject to organization
efforts by the International Brotherhood of Teamsters. We understand there will be union
issues over time. We will deal with these organization efforts appropriately but
ultimately we cannot predict the outcome of these activities.

13

---

(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

# LIQUIDITY AND CAPITAL
RESOURCES

The following is a table of our
contractual obligations and other commercial commitments as of April 3, 2004:

|                                                                                                                                                                                                                                                                                                                                   | Payments & Commitments by Period
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------
|
|Contractual Obligations                                                                                                                                                                                                                                                                                                            |                                 
|Long-Term Debt                                                                                                                                                                                                                                                                                                                     |                                 
|                                                                                                                                                                                                                                                                                                                                   |                                 
|Operating Leases                                                                                                                                                                                                                                                                                                                   |                                 
|                                                                                                                                                                                                                                                                                                                                   |                                 
|Total Contractual Obligations                                                                                                                                                                                                                                                                                                      |                                 
|                                                                                                                                                                                                                                                                                                                                   |                                 
|Other Commitments                                                                                                                                                                                                                                                                                                                  |                                 
|Mexico Loan (1)                                                                                                                                                                                                                                                                                                                    |                                 
|Purchase Commitments (2)                                                                                                                                                                                                                                                                                                           |                                 
|                                                                                                                                                                                                                                                                                                                                   |                                 
|Total Commitments                                                                                                                                                                                                                                                                                                                  |                                 
|                                                                                                                                                                                                                                                                                                                                   |                                 
|                                                                                                                                                                                                                                                                                                                                   |                                 
|(1)
          As of April 3, 2004, we invested $5,865 in the form of a loan, which can be
          increased to $10,000. (2) At April 3, 2004 our capital purchase commitments
          included $2,098 for land and improvements, $50,006 for revenue equipment and
          $616 for information technology related projects.

We believe that projected cash flows
from operating activities, cash on hand and funding from our committed credit facilities
will be adequate to finance our anticipated cash needs for 2004.

# Sources and Uses of Cash

# Operations

Our primary sources and uses of cash
result from the realization of trade accounts receivable and settlement of payroll, trade
accounts payable, and operating accruals, including insurance and claims. During the first
quarter of 2004 we did not experience any unusual transactions or trends in these areas
that would impact our cash position.

Net cash provided by operating
activities decreased $22,689 in the 2004 first quarter from the 2003 first quarter. This
was primarily due to increased revenue in March 2004, and the subsequent increase in net
trade accounts receivable at the end of the 2004 first quarter.

There have not been, and we do not
expect, any material changes to the underlying drivers of our operating cash flows. We
believe that cash generated from our core operations, cash on hand and, if needed, our
credit facilities to be sufficient to fund our operations.

# Investing

We maintain an appropriate level of
tractors and trailers to ensure the effectiveness of our operations. Purchases of tractors
and trailers have been, and are expected to be, our most significant type of capital
expenditure. These purchases can be deferred or accelerated in order for us to respond to
changes in economic conditions and the market for these assets. Purchases of tractors and
trailers were $1,922 and $12,130, and total capital expenditures were $21,445 and $37,436
during the first quarter of 2004 and 2003, respectively. Purchases of land and buildings
in the 2004 first quarter were $9,653 compared to $12,326 in the 2003 first quarter.

We increased our loan related to our
Mexican joint venture by $500 to $5,865.

14

---

(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

# Financing

We have a $200,000 committed credit
facility that expires in October 2005. The facility allows up to $125,000 for standby
letters of credit to cover our self-insurance programs and other miscellaneous letter of
credit requirements. In addition to our committed credit facility, we maintain an
uncommitted line of credit, which provides $10,000 of short-term funds. At April 3, 2004,
we had no borrowings under these facilities and had $100,724 of outstanding standby
letters of credit under the revolving credit facility.

Our external debt financing
arrangements are discussed in Note 3 to the Condensed Consolidated Financial Statements.

# Debt Instruments,
Guarantees, and Related Covenants

Our financing arrangements include covenants
that require us to comply with certain financial ratios including net worth and funded
debt to adjusted cash flows. We are in compliance with these covenants and do not believe
these covenants would restrict us from securing additional financing, if necessary.

# Cash Management

Cash decreased by $3,461 in the first
quarter of 2004 compared to a decrease of $6,860 in the same period of 2003.

# Dividends

Our quarterly dividend rate is .0933
per share. During the first quarter of 2004, we paid cash dividends totaling $2,562.

# Item 3. Quantitative and
Qualitative Disclosures about Market Risk

We are exposed to the impact of
interest rate changes. Our exposure to changes in interest rates is limited to borrowings
under a line of credit agreement, which has variable interest rates tied to LIBOR. There
have been no borrowings under this agreement in the current year-to-date period nor during
2003. In addition, we have $150,000 of unsecured notes with an 8 1/2% fixed annual
interest rate and $100,000 of unsecured notes with a 6 1/2% fixed annual interest rate. We
have no hedging instruments. From time to time, we invest excess cash in overnight money
market accounts. At April 3, 2004, we had approximately $109,600 that was invested in
overnight money market accounts, which yielded approximately 1.1% per annum.

We have a $200,000 credit facility
with a group of banks that will expire in October 2005. This facility is for working
capital, general corporate funding needs, and up to $125,000 for letters of credit issued
under our self-insurance program. As of April 3, 2004 we had no borrowings drawn under the
facility and $100,724 in issued letters of credit.

The facility bears interest at LIBOR,
plus a margin depending on our debt rating. In addition, there are other fees associated
with the facility and certain financial covenants including minimum net worth and maximum
funded debt to adjusted cash flow.

# Item 4. Controls and
Procedures

In order to ensure that information
for disclosure in our filings of periodic reports with the Securities and Exchange
Commission is identified, recorded, processed, summarized, and reported on a timely basis,
we have adopted disclosure controls and procedures. Our Chief Executive Officer, Richard
P. DiStasio, and our Chief Financial Officer, Thomas E. Bergmann, have reviewed and
evaluated our disclosure controls and procedures as of April 27, 2004, and have concluded
that our disclosure controls and procedures were adequate as of that date.

There were no changes in our internal
controls over financial reporting identified in connection with the foregoing evaluation
that occurred during our current years first quarter that has materially affected,
or is reasonably likely to materially affect, our internal controls over financial
reporting.

15

---

(Dollars
in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

# PART II: OTHER
INFORMATION

# Item 1. Legal
Proceedings.

Our trucking subsidiaries are parties
to a number of proceedings brought under the Comprehensive Environmental Response,
Compensation and Liability Act, (CERCLA). They have been made parties to these proceedings
as an alleged generator of waste disposed of at hazardous waste disposal sites. In each
case, the Government alleges that the parties are jointly and severally liable for the
cleanup costs. Although joint and several liability is alleged, these proceedings are
frequently resolved on the basis of the quantity of waste disposed of at the site by the
generator. Our potential liability varies greatly from site to site. For some sites the
potential liability is de minimisand for others the costs of cleanup have not yet
been determined. It is not feasible to predict or determine the outcome of these or
similar proceedings brought by state agencies or private litigants. We believe such
liability, if any, would not materially adversely affect our financial condition or
results of operations.

On December 23, 2003, Idealease
Services, Inc. (Idealease) filed a complaint against Logistics, in the Circuit
Court of Cook County in Chicago, Illinois. Idealease is asking the court to require
Logistics to specifically perform an alleged contractual obligation to buy back from
Idealease a fleet of vehicles it claims is valued at approximately $14,500 or to pay
Idealease that amount. Idealease also contends that Logistics is liable for $557 in lease
payments and that certain riders to a lease agreement are invalid due to a lack of
consideration. Logistics denies the material allegations in the Idealease complaint and
plans to vigorously contest the lawsuit in court.

We are involved in other litigation
arising in the ordinary course of business, primarily involving claims for bodily injury,
property damage, and workers compensation. We believe the ultimate recovery or
liability, if any, resulting from such litigation, individually or in total, would not
materially adversely affect our financial condition or results of operations.

# Item 2. Changes in
Securities and Use of Proceeds.

N/A

# Item 3. Defaults Upon
Senior Securities.

N/A

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

N/A

# Item 5. Other
Information.

N/A

16

---

# Item 6. Exhibits and
Reports on Form 8-K.

(a) Exhibits

| | 1. | Exhibit 3.1-Bylaws of USF Corporation, restated as of January 29, 2004.
| | -- | -----------------------------------------------------------------------

| | 2. | Exhibit 10.1-Employment Agreement of Thomas E. Bergmann.
| | -- | --------------------------------------------------------

| | 3. | Exhibit 31.1-Section 302 Certification of Chief Executive Officer.
| | -- | ------------------------------------------------------------------

| | 4. | Exhibit 31.2-Section 302 Certification of Chief Financial Officer.
| | -- | ------------------------------------------------------------------

| | 5. | Exhibit 32.1-Statement of Chief Executive Officer Pursuant to Section 1350(a) of
               Title 18, United States Code (furnished not filed with this Quarterly Report on
               Form 10-Q)
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6. | Exhibit 32.2-Statement of Chief Financial Officer Pursuant to Section 1350(a) of
               Title 18, United States Code (furnished not filed with this Quarterly Report on
               Form 10-Q)
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b)
Current Reports on Form 8-K were filed:

| | 1. | A Current Report on Form 8-K was filed on January 23, 2004 announcing the filing
               of a complaint against the Companys subsidiary USF Logistics Services Inc.
               by Idealease Services Inc.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | A Current Report on Form 8-K was filed on January 29, 2004 announcing the
               Companys 4th Quarter, 2003 earnings.
| | -- | ------------------------------------------------------------------------------------------------------------------------------

| | 3. | A Current Report on Form 8-K was filed on January 29, 2004 announcing the
               retirement of the Companys Chief Financial Officer.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | A Current Report on Form 8-K was filed on January 30, 2004 announcing the
               Companys adoption of an Amended and Restated Rights Agreement.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------

17

---

# SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized. Dated May 7, 2004.

|    | USF CORPORATION                                                                                   
|--- | --------------------------------------------------------------------------------------------------
|By: | /s/ Thomas E. Bergmann
Thomas E. Bergmann
Senior Vice President, Finance
& Chief Financial Officer
|By: | /s/ James T. Castro
James T. Castro
Vice President, Controller and Principal
Accounting Officer   

18

---