<PAGE>   1


Exhibit 13



MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


1999 COMPARED TO 1998
---------------------

The Company had net income of $45.8 million or $2.39 per share (diluted) for the
year ended December 31, 1999, compared to income of $26.0 million, or $1.31 per
share (diluted) in 1998. Revenue increased 6.0% to $2.8 billion in 1999. Tonnage
increased 3.0% in 1999 from the prior year, with less-than-truckload ("LTL")
tonnage up 3.2%, and truckload tonnage up 2.0%.

The Company continues to take action to improve operating margins, such as
sales, marketing and pricing initiatives, working with specific customers to
improve yield on freight, changing the freight mix, and cost controls.

Underlying freight rates improved due to the general rate increases effective on
January 1, 1999 and September 12, 1999, and contractual rate modifications
during the year. Overall revenue per ton increased 2.9%. LTL revenue per ton
increased 3.0%, and truckload revenue per ton increased 0.1%. The improvement in
revenue per ton is less than the change in the underlying freight rates, because
the average shipment size increased 2.4% to 1,132 pounds and the average length
of haul decreased by 0.6% to 1,304 miles. The increase in shipment size
partially reflects actions the Company took relative to pricing levels on
certain smaller shipments, which has resulted in a shift to larger, heavier
shipments. A variable rate fuel surcharge, which is assessed by the Company when
the national average price of diesel fuel exceeds $1.10 per gallon, was
reinstated on July 6, 1999, and resulted in an effective rate increase of 0.4%.

The Company's core business offering, national LTL service, represented 65% of
revenue in 1999. Regional service offerings were 16% of revenue (up 10% over
1998), truckload was 7%, and specialized products (such as international North
America, Time Critical, Precision Delivery, and Guaranteed Day Delivery
services) represented 12% of revenue. The Company's specialized product
offerings grew 16%, principally due to a 31% increase in revenue from the
domestic portion of these specialized products.

Plans to improve freight mix include focused growth on local customer accounts,
two-day regional markets, North American international business, and specialized
services. The decline in length of haul reflects the growth of regional service
offerings.

Cost control efforts include operational changes to reduce transportation costs
and maintain high service standards with technological enhancements that allow
improved load planning and


                                       1
<PAGE>   2


scheduling, more effective use of road and rail capacity, and equipment
enhancements such as deck trailers that allow greater cubic utilization. Other
cost reduction initiatives include continued emphasis on safety improvement,
particularly with the Challenge 2000 program, cargo claims reductions, and
aggressive administrative cost controls tied to process improvements and goal
awareness. Challenge 2000 is a comprehensive effort to mobilize the Company's
workforce to reduce injuries and increase safety.

Operating expenses increased 4.8%, but operating expenses per ton increased only
1.8%. Salaries, wages, and benefits were 63.8% of revenue in 1999, down from
65.0% in 1998. Cost increases in key direct labor areas were generally less than
the corresponding growth in revenue. Linehaul driver wages increased 2.4%.
Pickup and delivery wages were up 3.1%. Dock wages increased only 1.5%,
reflecting improved productivity driven by the changing freight mix. Indirect
wage and benefit costs increased 16% over 1998. This increase resulted primarily
from profit sharing and performance-based compensation related to results of
operations, which was 2.1% of total salaries, wages, and benefits for the year
compared to 1.0% in 1998. Another component, amounting to a $6.0 million
increase, was the impact of plan amendments to the Company's defined benefit
pension plan late in 1998.

Operating supplies and expenses per ton for 1999 were down slightly compared to
1998 levels. Fuel costs increased $4.7 million, as the Company's average fuel
prices increased 28.4% during the year. The dramatic rise in fuel prices in the
second half of the year resulted in the reinstatement of the fuel surcharge
discussed above. Long-term tractor and trailer leases and short-term equipment
rentals increased by $16.0 million, or 61% over 1998, in order to meet increased
demand, especially in the fourth quarter. Maintenance costs declined $7.2
million, related primarily to linehaul operations, and reflect the disposal of
older, more costly equipment, and the acquisition of new and refurbished
equipment. Terminal related operating supply and service costs rose only 0.8% as
the mix of freight shifted. Operating supplies and expenses for administrative
and other functions decreased $4.1 million, primarily due to reduced cost for
purchased information systems services, which more than offset the 6.0% cost
increase in other areas.

Purchased transportation expense increased $29.1 million during 1999, driven by
a $26.6 million increase in rail costs, reflecting the increased use of
railroads in certain linehaul operations during the year. For 1999, the Company
increased the use of railroads in linehaul operations to 28.9% of total miles.
This is up from 26.6% in 1998, principally due to tonnage increases in the
second half of 1999.

Operating taxes and licenses increased $1.5 million or 2.0% in 1999. This modest
increase is consistent with the actual increase in road miles driven with
Company-owned equipment.

The Company experienced an increase of $8.8 million in insurance and claims
expense, principally due to costs associated with public liability claims
related to increased business levels


                                       2
<PAGE>   3


and severity of claim losses, despite record highway safety performances.
Highway safety performance in 1999 exceeded the 1998 record-breaking results.
Expenses for incurred cargo claims remained flat despite the increase in tonnage
and revenue, reflecting continuation of improved freight handling techniques and
the network refinements, which have reduced freight handling and the resultant
cargo claims.

Depreciation expense increased primarily due to additional capital expenditures
for data processing equipment and software. These increases were partially
offset by reduced depreciation expense for revenue equipment that became fully
depreciated. The Company's system count has been reduced to 388 terminals, down
slightly from 396 at the end of 1998. The Company's small loss on the sale of
assets in 1999 compared to a $2.2 million gain in 1998 reflects reduced real
estate transactions.

The operating income of $77.2 million or 2.7% of revenue compares to an
operating income of $44.1 million or 1.7% of revenue in 1998.

The Company's tax rate in 1999 differs from the federal statutory rate due to
non-deductible operating expenses, state income taxes, and the impact of foreign
operations. The effective tax rate was 42.6% in 1999, compared to 42.7% in 1998.



1998 COMPARED TO 1997
---------------------


The Company had net income of $26.0 million or $1.31 per share (diluted), for
the year ended December 31, 1998, compared to income of $36.9 million, or $1.80
per share (diluted) in 1997. Revenues were $2.7 billion in 1998, a 0.6% decline
from 1997.

Tonnage was down 1.7% from the prior year, with LTL tonnage down 2.3%, while
truckload tonnage increased 0.8%. Overall revenue per ton increased 1.1% in
1998. LTL revenue per ton increased 1.9%, and truckload revenue per ton
decreased 3.6%.

Formal negotiations with the Teamsters began in late December 1997, well in
advance of the March 31, 1998 expiration of the contract. The Motor Freight
Carriers Association, whose members include the four largest LTL trucking
companies in the United States, represented the Company. A tentative contract
was settled on February 9, 1998, seven weeks before the existing contract
expired, in an attempt to avoid a diversion of freight to non-union carriers by
customers who were wary of a repeat of the 1994 strike. The new contract
provided the Company five years of labor stability and known, moderate wage and
benefit increases. Despite successful negotiation of a new five-year contract,
some diversion of freight did occur during 1998, which had an unexpected and
damaging effect on freight mix and revenue yield.



                                       3
<PAGE>   4


Salaries, wages, and benefits were 65.0% of revenue in 1998, up from 63.6% in
1997. The largest increases were in transportation and terminal operations. At
the terminal level, increased costs per ton for clerical wages, pickup and
delivery wages, and union health, welfare, and pension benefits were partially
offset by an increase in dock productivity. The net effect was an increase in
terminal costs per ton of 2.9%. In the transportation area, linehaul wages and
benefits increased by 2.4% per ton, reflecting the reduction of the use of
railroads in certain linehaul operations during the year. For 1998, the Company
decreased the use of railroads in linehaul operations to 26.6% of total miles.
This was down from 28.0% in 1997, principally due to lower business levels in
1998. In addition, benefits, primarily group insurance for certain
administrative employees, increased $6.2 million, or 16.8%.

Operating supplies and expenses per ton for 1998 were up slightly over 1997
levels. Higher long-term tractor and trailer lease rentals and linehaul repair
expenses were offset by a $14.6 million reduction in fuel costs.

Purchased transportation expense declined $7.9 million during 1998 compared to
1997. This reflects a $12.2 million decrease in rail costs, discussed above,
offset by increases in contracted pickup and delivery services.

Depreciation expense continued to decline as more revenue equipment became fully
depreciated, operating leases were utilized for refurbished trailers and
replacement tractors, and from the reduction in the number of terminal
facilities. The Company's system count was 396 terminals at the end of 1998,
down from 424 at the beginning of 1997. The sale of unused facilities resulted
in a $2.2 million gain in 1998, down from $6.0 million in 1997.

The Company's improved freight handling techniques and the network refinements
reduced freight handling and the resultant cargo claims. This improvement,
coupled with the record highway safety performance, resulted in a $7.0 million
decline in insurance and claims expense for 1998.

The operating income of $44.1 million or 1.7% of revenue compares to an
operating income of $61.3 million or 2.3% of revenue in 1997.

The Company's tax rate in 1998 differs from the federal statutory rate due to
non-deductible operating expenses, state income taxes, and the impact of foreign
operations. The effective tax rate was 42.7% in 1998, compared to 39.2% in 1997.
This increase was due to the non-availability of foreign tax credit carry
forwards and the greater impact of non-deductible expenses on the reduced
operating income.

LIQUIDITY AND CAPITAL RESOURCES


                                       4
<PAGE>   5


The Company had cash and equivalents of $80.8 million at December 31, 1999,
compared to $60.2 million at year-end 1998. The Company has a $38 million line
of credit available, and remains debt free. Capital expenditures are financed
primarily through internally generated funds. Future expenditures are expected
to be financed in a similar manner, except for a planned replacement in 2000 of
an additional 10% of the Company's linehaul trailers and 14% of the Company's
linehaul tractors through operating lease arrangements. During 1999, 11% of the
Company's linehaul tractors were replaced under operating leases. In addition to
the leases mentioned above, capital expenditures of $100 million are planned for
2000, up from $76 million in 1999. Most of the capital expenditures are
designated for revenue equipment, facilities and information systems. Management
believes that cash flows from operations and financing sources will be
sufficient to support its working capital needs, projected capital expenditures,
dividends to shareholders, and funds for other routine corporate needs during
2000, as was the case in 1999.

The impact of inflation on operating expenses has been moderate in recent years.


OTHER MATTERS


The Company's computer systems are successfully operating in the year 2000. The
systems necessary for moving freight and communicating with our customers are
performing as planned. Total expenditures during 1999, 1998, and 1997 to bring
the systems into compliance were $11.8 million, comprised of $4.7 million in
capital expenditures and $7.1 million in expense. The year 2000 project consumed
approximately 8% of the Company's total information technology budget for 1999
and 6% in 1998. Minimal additional expenditures are anticipated in 2000. All
expenditures were financed with operating cash flow.

Under the terms of the Teamster contract, which extends through March 31, 2003,
wage and benefit increases approximating 3.2% will be effective April 1, 2000.

The Company receives notices from the EPA from time to time identifying it as a
potentially responsible party ("PRP") under the Comprehensive Environmental
Response Compensation and Liability Act for various Superfund sites. The Company
believes that its obligation with regard to these sites is de minimis.

The Company's earnings are affected by changes in interest rates related to its
trailer leases. During 1998, the Company entered into interest rate swap
agreements with major commercial banks to fix the interest rate of its trailer
leases from previous variable interest rates. The value of the leases upon which
the payments are based was not changed. The agreements, which expire from 2002
to 2004, fix the Company's interest costs at rates varying from 6.07% to 7.12%
on leases valued at $39.7 million. An interest rate variation of 1% would have
no material impact on the Company.



                                       5
<PAGE>   6


CONSOLIDATED BALANCE SHEETS
Roadway Express, Inc. and Subsidiaries

<TABLE>
<CAPTION>
                                                                          DECEMBER 31
                                                                    1999               1998
                                                                --------------------------------
                                                                (in thousands, except share data)
<S>                                                             <C>                <C>
ASSETS
Current assets:
   Cash and cash equivalents                                    $    80,797        $    60,232
   Accounts receivable, net                                         299,599            280,170
   Prepaid expenses and supplies                                     17,940             18,978
                                                                -----------        -----------
Total current assets                                                398,336            359,380

Carrier operating property, at cost                               1,356,533          1,341,496
   Less allowance for depreciation                                  976,205            984,380
                                                                -----------        -----------
Net carrier operating property                                      380,328            357,116

Goodwill, net                                                        15,360              8,382
Deferred income taxes                                                37,384             23,955
                                                                -----------        -----------
Total assets                                                    $   831,408        $   748,833
                                                                ===========        ===========

LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
   Accounts payable                                             $   190,499        $   177,641
   Salaries and wages                                               120,695            103,723
   Freight and casualty claims payable                               52,165             47,249
                                                                -----------        -----------
Total current liabilities                                           363,359            328,613
Long-term liabilities:
   Casualty claims payable                                           49,077             51,812
   Accrued pension and postretirement health care                   118,212            104,091
   Future equipment repairs                                           9,805             14,708
                                                                -----------        -----------
Total long-term liabilities                                         177,094            170,611

Shareholders' equity:
   Preferred stock
     Authorized--20,000,000 shares
     Issued--none                                                         -                  -
   Common stock--$.01 par value
     Authorized--100,000,000 shares
     Issued--20,556,714 shares                                          206                206
   Additional paid-in capital                                        41,586             42,057
   Earnings reinvested in the business                              282,490            240,592
   Accumulated other comprehensive loss                              (5,591)            (6,041)
   Unearned portion of restricted stock awards                       (7,509)            (6,862)
   Treasury shares (1,166,579 shares in 1999 and
     1,166,215 shares in 1998)                                      (20,227)           (20,343)
                                                                -----------        -----------
Total shareholders' equity                                          290,955            249,609
                                                                -----------        -----------
Total liabilities and shareholders' equity                      $   831,408        $   748,833
                                                                ===========        ===========
</TABLE>

See accompanying notes.


                                       6
<PAGE>   7

STATEMENTS OF CONSOLIDATED INCOME
Roadway Express, Inc. and Subsidiaries


<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31
                                                                    1999             1998            1997
                                                              ---------------------------------------------------
                                                                    (in thousands, except per share data)

<S>                                                             <C>             <C>              <C>
Revenue                                                         $  2,813,214    $    2,654,094   $  2,670,944

Operating expenses:
   Salaries, wages and benefits                                    1,793,594         1,724,970      1,699,692
   Operating supplies and expenses                                   468,452           456,884        462,895
   Purchased transportation                                          289,544           260,445        268,344
   Operating taxes and licenses                                       76,113            74,604         74,777
   Insurance and claims                                               62,700            53,948         60,920
   Provision for depreciation                                         45,492            41,422         49,010
   Net loss (gain) on sale of carrier operating property
                                                                         103            (2,239)        (5,955)
                                                              ---------------------------------------------------
Total operating expenses                                           2,735,998         2,610,034      2,609,683
                                                              ---------------------------------------------------
Operating income                                                      77,216            44,060         61,261

Other income (expense):
   Interest expense                                                     (716)             (937)        (2,076)
   Other, net                                                          3,245             2,290          1,471
                                                              ---------------------------------------------------
                                                                       2,529             1,353           (605)
                                                              ---------------------------------------------------
Income before income taxes                                            79,745            45,413         60,656
Provision for income taxes                                            33,972            19,379         23,751
                                                              ---------------------------------------------------

Net income                                                      $     45,773    $       26,034   $     36,905
                                                              ===================================================

Earnings per share--basic                                       $       2.43    $         1.33   $       1.83
                                                              ===================================================

Earnings per share--diluted                                     $       2.39    $         1.31   $       1.80
                                                              ===================================================

Dividends declared per share                                    $       0.20    $         0.20   $       0.20
                                                              ===================================================
</TABLE>


See accompanying notes.


                                       7
<PAGE>   8

STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
Roadway Express, Inc. and Subsidiaries


<TABLE>
<CAPTION>
                                                                       EARNINGS     ACCUMULATED      UNEARNED
                                                          ADDITIONAL   INVESTED        OTHER        PORTION OF
                                                COMMON      PAID-IN     IN THE     COMPREHENSIVE     RESTRICTED     TREASURY
                                    TOTAL        STOCK      CAPITAL    BUSINESS    INCOME (LOSS)    STOCK AWARDS     STOCK
                                 -----------------------------------------------------------------------------------------------
                                                                         (in thousands)
<S>                              <C>           <C>         <C>         <C>            <C>            <C>           <C>
YEAR ENDED DECEMBER 31, 1997
  Balance at January 1, 1997     $   224,596   $      206  $   43,100  $  185,758     $  (4,283)                   $    (185)
  Net income                          36,905                               36,905
  Foreign currency translation
    adjustments                            7                                                  7
                                 -------------
  Total comprehensive income          36,912
  Dividends declared                  (4,111)                              (4,111)
  Treasury stock activity - net       (4,411)                                                                         (4,411)
  Restricted stock award              (3,550)                     423                                $ (3,973)
    activity
                                 -----------------------------------------------------------------------------------------------

  Balance at December 31, 1997       249,436          206      43,523     218,552        (4,276)       (3,973)        (4,596)

YEAR ENDED DECEMBER 31, 1998
  Net income                          26,034                               26,034
  Foreign currency translation
    adjustments                       (1,765)                                            (1,765)
                                 -------------
  Total comprehensive income          24,269
  Dividends declared                  (3,994)                              (3,994)
  Treasury stock activity - net      (15,747)                                                                        (15,747)
  Restricted stock award              (4,355)                  (1,466)                                 (2,889)
    activity
                                 -----------------------------------------------------------------------------------------------

  Balance at December 31, 1998       249,609          206      42,057     240,592        (6,041)       (6,862)       (20,343)

YEAR ENDED DECEMBER 31, 1999
  Net income                          45,773                               45,773
  Foreign currency translation
    adjustments                          450                                                450
                                 -------------
  Total comprehensive income          46,223
  Dividends declared                  (3,875)                              (3,875)
  Treasury stock activity - net          116                                                                             116
  Restricted stock award              (1,118)                    (471)                                   (647)
    activity
                                 -----------------------------------------------------------------------------------------------

BALANCE AT DECEMBER 31, 1999     $   290,955   $      206  $   41,586  $  282,490     $  (5,591)     $ (7,509)     $ (20,227)
                                 ===============================================================================================
</TABLE>


See accompanying notes.


                                       8
<PAGE>   9


STATEMENTS OF CONSOLIDATED CASH FLOWS
Roadway Express, Inc. and Subsidiaries



<TABLE>
<CAPTION>
                                                                             YEAR ENDED DECEMBER 31
                                                                        1999           1998          1997
                                                                   ---------------------------------------------
                                                                                  (in thousands)
<S>                                                                  <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                           $    45,773    $    26,034   $    36,905
Adjustments to reconcile net income to net
  cash provided by operating activities:
     Depreciation and amortization                                        45,635         42,440        49,558
     Loss (gain) on sale of carrier operating property                       103         (2,239)       (5,955)
     Changes in assets and liabilities:
       Accounts receivable                                               (19,429)         7,880       (14,760)
       Other assets                                                      (13,509)       (16,687)         (480)
       Accounts payable and accrued items                                 34,785          3,690        12,987
       Long-term liabilities                                               6,483         (1,137)      (15,364)
                                                                   ---------------------------------------------
Net cash provided by operating activities                                 99,841         59,981        62,891

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of carrier operating property                                  (76,063)       (52,481)      (36,902)
Sales of carrier operating property                                        7,256         14,266        20,135
Business acquisitions                                                     (6,924)             -       (15,000)
                                                                   ---------------------------------------------
Net cash used in investing activities                                    (75,731)       (38,215)      (31,767)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid                                                            (3,872)        (3,986)       (4,103)
Treasury stock activity - net                                                116        (15,747)       (4,411)
                                                                   ---------------------------------------------
Net cash used in financing activities                                     (3,756)       (19,733)       (8,514)

Effect of exchange rate changes on cash                                      211           (306)         (348)
                                                                   ---------------------------------------------
Net increase in cash and cash equivalents                                 20,565          1,727        22,262

Cash and cash equivalents at beginning of year                            60,232         58,505        36,243
                                                                   ---------------------------------------------

Cash and cash equivalents at end of year                             $    80,797    $    60,232   $    58,505
                                                                   =============================================
</TABLE>


See accompanying notes.


                                       9
<PAGE>   10


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Roadway Express, Inc. and Subsidiaries
December 31, 1999


1.    NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Roadway Express, Inc. (the "Company") provides long haul, less-than-truck load
("LTL") freight services in North America and offers services to an additional
66 countries worldwide in a single business segment. Approximately 74% of the
Company's employees are represented by various labor unions, primarily the
International Brotherhood of Teamsters ("IBT"). The current agreement with the
IBT expires on March 31, 2003.

2.    ACCOUNTING POLICIES

Principles of Consolidation--The consolidated financial statements include the
accounts and operations of the Company and its subsidiaries. All significant
intercompany accounts and transactions have been eliminated.

Cash Equivalents--The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents.

Depreciation--Depreciation of carrier operating property is computed by the
straight-line method based on the useful lives of the assets. The useful life of
structures ranges from 15 to 33 years, and equipment from 3 to 10 years.

Financial Instruments--The carrying value of cash and cash equivalents, accounts
receivable, accounts payable and short-term borrowings approximate their fair
value due to the short-term nature of these instruments. The only derivative
financial instruments the Company uses are interest rate swaps on certain
trailer leases as part of its overall risk management policy. The Company does
not use derivative financial instruments for trading purposes (See note 10).

Goodwill--Goodwill represents costs in excess of net assets of acquired
businesses, which are amortized using the straight-line method primarily over a
period of 20 years. The Company evaluates the realizability of goodwill based on
the undiscounted cash flows of the businesses acquired over the remaining
amortization period. Should the review indicate that goodwill is not
recoverable, the Company's carrying value of goodwill would be reduced by the
estimated shortfall of the cash flows. No reduction of goodwill for impairment
has been necessary to date.


                                       10
<PAGE>   11


2.    ACCOUNTING POLICIES (CONTINUED)

Casualty Claims Payable--These accruals represent management's estimates of
claims for property damage and public liability and workers' compensation.
Expenses resulting from workers' compensation claims are included in salaries,
wages, and benefits in the accompanying statements of consolidated income.

Revenue Recognition--The Company recognizes revenue as earned on the date of
freight delivery to consignee. Related expenses are recognized as incurred.

Future Equipment Repairs--This accrual represents the estimated costs of
anticipated major future repairs on inter-city tractors purchased prior to
January 1, 1996.

Stock-Based Compensation--The Company accounts for stock-based compensation in
accordance with Accounting Principles Board ("APB") Opinion No. 25, Accounting
for Stock Issued to Employees.

Foreign Currency Translation--Income statement items are translated at average
currency exchange rates. Transaction gains and losses are included in
determining net income. All balance sheet accounts of foreign operations are
translated at the current exchange rate as of the end of the period. The
resulting translation adjustment is recorded as a separate component of
shareholders' equity.

Use of Estimates in the Financial Statements--The preparation of the financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
revenues and expenses during the period, the reported amount of assets and
liabilities, and disclosure of contingent assets and liabilities at the date of
the financial statements. Actual results could differ from these estimates.

Impairment of Long-lived Assets--In the event that facts and circumstances
indicate that the carrying value of intangibles and long-lived assets or other
assets may be impaired, an evaluation of recoverability would be performed. If
an evaluation were required, the estimated future undiscounted cash flow
associated with the asset would be compared to the asset's carrying amount to
determine if a write-down is required.

Concentration of Credit Risks--The Company sells services and extends credit
based on an evaluation of the customer's financial condition, without requiring
collateral. Exposure to losses on receivables is principally dependent on each
customer's financial condition. The Company monitors its exposure for credit
losses and maintains allowances for anticipated losses.



                                       11
<PAGE>   12

2.    ACCOUNTING POLICIES (CONTINUED)

Impact of Recently Issued Accounting Standard--Statement of Financial Accounting
Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging
Activities, is required to be adopted in the year 2001. SFAS No. 133 will
require, among other things, the Company to recognize all derivatives on the
balance sheet at fair value. If adopted, SFAS No. 133 would not have a material
effect on earnings or financial position of the Company.

3.    ACQUISITION OF REIMER EXPRESS LINES LTD.

On April 30, 1997, the Company acquired all of the outstanding shares of Reimer
Express Lines Ltd., a privately held Canadian common carrier for $15,000,000.
The purchase agreement also contained provisions for additional payments of up
to $10,000,000, subject to Reimer achieving defined performance criteria over a
five-year period. As of December 31, 1999, approximately $7,000,000 of
additional purchase price has been paid, which was recorded as additional
goodwill. Reimer provides truckload and LTL service throughout Canada, and
international service to and from Canada.

The acquisition was paid in cash and recorded under the purchase method of
accounting. The results of Reimer's operations subsequent to the date of
acquisition are included in the Company's consolidated financial statements.

4.    EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>
                                                       1999            1998             1997
                                                 ---------------------------------------------------
                                                      (in thousands, except per share data)

<S>                                                 <C>             <C>              <C>
Net income                                          $    45,773     $    26,034      $    36,905
                                                 ===================================================

Weighted-average shares for
   basic earnings per share                              18,811          19,617           20,210

Incentive stock plans                                       308             198              316
                                                 ---------------------------------------------------

Weighted-average shares for
   diluted earnings per share                            19,119          19,815           20,526
                                                 ===================================================

Basic earnings per share                            $      2.43     $      1.33      $      1.83
                                                 ===================================================

Diluted earnings per share                          $      2.39     $      1.31      $      1.80
                                                 ===================================================
</TABLE>


                                       12
<PAGE>   13


5.    CARRIER OPERATING PROPERTY

Carrier operating properties consist of the following:

<TABLE>
<CAPTION>
                                                                    1999                1998
                                                              -------------------------------------
                                                                         (in thousands)

<S>                                                             <C>                 <C>
Land                                                            $     74,120        $     74,785
Structures                                                           385,918             377,408
Revenue equipment                                                    684,708             703,211
Other operating property                                             211,787             186,092
                                                              -----------------   -----------------

Carrier operating property, at cost                                1,356,533           1,341,496
Less allowance for depreciation                                      976,205             984,380
                                                              -----------------   -----------------

Net carrier operating property                                  $    380,328        $    357,116
                                                              =================   =================
</TABLE>



6.    ACCOUNTS PAYABLE

Items classified as accounts payable consist of the following:

<TABLE>
<CAPTION>
                                                                    1999                1998
                                                              -------------------------------------
                                                                         (in thousands)

<S>                                                             <C>                 <C>
Trade and other payables                                        $     68,232        $     76,782
Drafts outstanding                                                    36,817              31,403
Income taxes payable                                                  24,272              14,744
Taxes, other than income                                              31,795              26,423
Multi-employer health, welfare,
  and pension plans                                                   29,383              28,289
                                                              -----------------   -----------------

                                                                $    190,499        $    177,641
                                                              =================   =================
</TABLE>



                                       13
<PAGE>   14


7.    INCOME TAXES

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                          1999            1998            1997
                                                    -------------------------------------------------
                                                                      (in thousands)
<S>                                                   <C>             <C>             <C>
Current taxes:
   Federal                                            $    40,489     $    20,355     $   21,523
   State                                                    5,775           3,045          3,852
   Foreign                                                  1,137          (1,318)         1,436
                                                    -------------------------------------------------
                                                           47,401          22,082         26,811
Deferred taxes:
   Federal                                                (10,874)         (2,024)        (2,794)
   State                                                   (1,411)           (360)          (417)
   Foreign                                                 (1,144)           (319)           151
                                                    -------------------------------------------------
                                                          (13,429)         (2,703)        (3,060)
                                                    -------------------------------------------------

Provision for income taxes                            $    33,972     $    19,379     $   23,751
                                                    =================================================
</TABLE>

In addition to the 1999 provision for income taxes of $33,972,000, deferred
income tax benefits of $197,000 were allocated directly to shareholders' equity.
Income tax payments amounted to $35,344,000 in 1999, $16,645,000 in 1998, and
$26,435,000 in 1997.

Income before income taxes consists of the following:

<TABLE>
<CAPTION>
                                                          1999            1998           1997
                                                    ------------------------------------------------
                                                                    (in thousands)

<S>                                                    <C>             <C>             <C>
Domestic                                               $  83,572       $  49,875       $  56,400
Foreign                                                   (3,827)         (4,462)          4,256
                                                    ------------------------------------------------

                                                       $  79,745       $  45,413       $  60,656
                                                    ================================================
</TABLE>


                                       14
<PAGE>   15



7.    INCOME TAXES (CONTINUED)



Significant components of the Company's deferred taxes are as follows:

<TABLE>
<CAPTION>
                                                                       1999              1998
                                                                 -----------------------------------
                                                                           (in thousands)
<S>                                                                 <C>               <C>
Deferred tax assets:
   Freight and casualty claims                                      $    36,946       $    36,171
   Retirement benefit liabilities                                        46,103            40,595
   Other                                                                 35,098            28,568
                                                                 ----------------- -----------------
Total deferred tax assets                                               118,147           105,334

Deferred tax liabilities:
   Depreciation                                                          48,536            50,538
   Multi-employer pension plans                                          32,227            30,841
                                                                 ----------------- -----------------
Total deferred tax liabilities                                           80,763            81,379
                                                                 ----------------- -----------------

Net deferred tax assets                                             $    37,384       $    23,955
                                                                 ================= =================
</TABLE>

At December 31, 1999, the Company had approximately $7,611,000 of foreign
operating loss carry forwards, which have expiration dates ranging from 2005 to
2009. For financial reporting purposes, a valuation allowance of $700,000 has
been recognized to offset a deferred tax asset relating to foreign tax credit
carry forwards, which expire in 2001.



                                       15
<PAGE>   16


7.    INCOME TAXES (CONTINUED)

The effective tax rate differs from the federal statutory rate as set forth in
the following reconciliation:

<TABLE>
<CAPTION>
                                                                  1999        1998         1997
                                                              ---------------------------------------

<S>                                                                <C>         <C>          <C>
Federal statutory tax rate                                         35.0%       35.0%        35.0%
State income taxes, net of
    federal tax benefit                                             3.6         3.8          3.7
Non-deductible operating costs                                      2.5         4.9          4.0
Impact of foreign operations                                        1.2        (0.9)        (3.1)
Other, net                                                          0.3        (0.1)        (0.4)
                                                              ---------------------------------------

Effective tax rate                                                 42.6%       42.7%        39.2%
                                                              =======================================
</TABLE>






8.    EMPLOYEE BENEFIT PLANS

MULTI-EMPLOYER PLANS

The Company charged to operations $155,241,000 in 1999, $149,608,000 in 1998,
and $144,702,000 in 1997 for contributions to multi-employer pension plans for
employees subject to labor contracts. The Company also charged to operations
$150,731,000 in 1999, $153,166,000 in 1998, and $148,951,000 in 1997 for
contributions to multi-employer plans that provide health and welfare benefits
to employees and certain retirees who are or were subject to labor contracts.
These amounts were determined in accordance with provisions of industry labor
contracts. Under provisions of the Multi-employer Pension Plan Act of 1980,
total or partial withdrawal from a plan would result in an obligation to fund a
portion of the plan's unfunded vested liability. Management has no intention of
changing operations so as to subject the Company to any material obligation.


                                       16
<PAGE>   17


8.    EMPLOYEE BENEFIT PLANS (CONTINUED)

RETIREMENT PLANS

The following tables set forth the change in benefit obligation, change in plan
assets, funded status and amounts recognized in the consolidated balance sheets
of the defined benefit pension and postretirement health care benefit plans as
of December 31, 1999 and 1998:

<TABLE>
<CAPTION>
                                                      PENSION BENEFITS            HEALTH CARE BENEFITS
                                                ----------------------------- ------------------------------
                                                     1999          1998            1999           1998
                                                ----------------------------- ------------------------------
                                                                      (in thousands)
<S>                                               <C>           <C>             <C>            <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of
   year                                           $   243,435   $   192,386     $    32,461    $    24,372
Service cost                                           15,588        12,287           1,739          1,365
Interest cost                                          18,483        14,712           2,377          2,206
Actuarial losses (gains)                                5,930        26,571          (1,029)         6,508
Benefits paid                                         (24,588)       (2,521)         (2,042)        (1,990)
                                                ----------------------------- ------------------------------

Benefit obligation at end of year                 $   258,848   $   243,435     $    33,506    $    32,461
                                                ============================= ==============================

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of
   year                                           $   251,439   $   217,676     $         -    $         -
Actual return on plan assets                          115,699        36,284               -              -
Benefits paid                                         (24,588)       (2,521)              -              -
                                                ----------------------------- ------------------------------

Fair value of plan assets at end of year          $   342,550   $   251,439     $         -    $         -
                                                ============================= ==============================

FUNDED STATUS
Plan assets (in excess) less than projected
   benefit obligation                             $   (83,702)  $    (8,004)    $    33,506    $    32,461
Unamortized:
   Net actuarial gain                                 200,522        91,935          12,052         11,512
   Net asset at transition                             12,558        13,953               -              -
   Prior service (cost) benefit                       (58,549)      (39,760)          1,825          1,994
                                                ----------------------------- ------------------------------

Accrued benefit cost                              $    70,829   $    58,124     $    47,383    $    45,967
                                                ============================= ==============================
</TABLE>

Plan assets are primarily invested in listed stocks, bonds, and cash
equivalents.


                                       17
<PAGE>   18


8.    EMPLOYEE BENEFIT PLANS (CONTINUED)

RETIREMENT PLANS (CONTINUED)

The following table summarizes the assumptions used by the consulting actuary,
and the related benefit cost information:

<TABLE>
<CAPTION>
                                       PENSION BENEFITS                      HEALTH CARE BENEFITS
                            --------------------------------------- ----------------------------------------
                                1999        1998         1997          1999         1998          1997
                            --------------------------------------- ----------------------------------------
                                                        (dollars in thousands)
<S>                           <C>         <C>          <C>            <C>          <C>            <C>
WEIGHTED-AVERAGE
   ASSUMPTIONS
Discount rate                   7.50%       7.00%        7.50%          7.50%      7.00%           7.50%
Future compensation
   assumptions                  3.25%       3.25%        3.25%             -          -                -
Expected long-term return
   on plan assets               8.50%       8.00%        8.00%             -          -                -

COMPONENTS OF NET PERIODIC
   BENEFIT COST
Service cost                  $15,588     $12,287      $ 9,615        $ 1,739      $1,365         $1,128
Interest cost                  18,483      14,712       13,430          2,377       2,206          1,748
Expected return on plan       (20,944)    (17,406)     (14,808)            -            -              -
   assets
Amortization of:
   Prior service cost           5,225       3,636        3,698           (169)       (169)          (169)
(benefit)
   Net asset gain at           (1,395)     (1,395)      (1,395)            -            -              -
transition
   Net actuarial gain          (4,238)     (5,115)      (4,888)          (489)       (709)          (880)
                            --------------------------------------- ----------------------------------------

Net periodic benefit cost     $12,719     $ 6,719      $ 5,652        $ 3,458      $2,693         $1,827
                            ======================================= ========================================
</TABLE>

For measurement purposes, the Company assumed a weighted-average annual rate of
increase in the per capita cost of health care benefits (health care cost trend
rate) of 7.9% for 2000 declining gradually to 5.0% in 2006 and thereafter.

The assumed health care cost trend rate has a significant effect on the amounts
reported. For example, a one percentage point increase in the assumed health
care cost trend rate would increase the accumulated post retirement benefit
obligation by $4,267,000 and the service and interest costs components by
$629,000 as of December 31, 1999. Conversely, a one percentage point decrease in
the assumed health care cost trend rate would decrease the accumulated post
retirement benefit obligation by $3,661,000 and the service and interest costs
components by $528,000.

The Company charged to operations $9,134,000 in 1999, $8,034,000 in 1998, and
$7,290,000 in 1997 relating to its defined contribution 401(k) plan. This plan
covers employees not subject to labor contracts. Annual contributions are
related to the level of voluntary employee participation.


                                       18
<PAGE>   19


9.    STOCK PLANS

MANAGEMENT INCENTIVE STOCK PLAN

The Company's Management Incentive Stock Plan (the "Stock Plan") authorizes the
granting of up to an aggregate of 1,200,000 shares of common stock at the
discretion of the Board of Directors to officers and certain key employees of
the Company. An award of incentive stock involves the immediate transfer to a
participant of a specific number of shares of the Company's common stock in
consideration of the performance of future services. The participant is
immediately entitled to voting, dividend, and certain other ownership rights in
the shares. The Board approved grants of 656,000 shares, of which 181,000 were
awarded in 1999, and 159,000 were awarded in 1998. These grants are recorded as
the unearned portion of restricted stock awards. The grants, originally recorded
at market price, are amortized to compensation expense over the period for which
the stock is restricted. Compensation expense relating to the Stock Plan
amounted to $ 1,820,000 in 1999, $1,222,000 in 1998, and $728,000 in 1997.

EQUITY OWNERSHIP PLAN AND NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN

Under the Equity Ownership Plan, which was implemented in 1998, the Board is
authorized to award officers and key employees with various types of stock-based
compensation, including stock options. Stock options vest over a period of four
years from the date of grant, are exercisable at the rate of 25% each year, and
expire at the end of ten years. The number of shares of common stock that may be
issued or transferred under the plan may not exceed 1,300,000. During 1999, the
Board approved grants of 704,250 stock options under this plan.

Under the Nonemployee Directors' Stock Option Plan, directors can elect to
invest all or a portion of their retainers in stock options. These stock options
vest 1 year from the date of grant and expire at the end of ten years. The
number of options issued under this plan may not exceed 100,000. During 1999 and
1998, 10,329 and 6,599 options were issued under this plan.



                                       19
<PAGE>   20

9.    STOCK PLANS (CONTINUED)


The following tables summarize all stock option activity:

<TABLE>
<CAPTION>
                                                 1999                            1998
                                      ----------------------------    ----------------------------
                                                      WEIGHTED                        Weighted
                                       NUMBER OF       AVERAGE         Number of      Average
                                     STOCK OPTIONS    EXERCISE           Stock     Exercise Price
                                                        PRICE           Options
                                     -------------- --------------    ------------ ---------------

<S>                                     <C>           <C>                  <C>        <C>
Outstanding January 1                     6,599       $   24.56              -            -
     Exercised                              -               -                -            -
     Granted                            714,579           20.41            6,599      $  24.56
     Forfeited or expired                   -               -                -            -
                                     -------------- --------------    ------------ ---------------
Outstanding December 31                 721,178       $   20.45            6,599      $  24.56
                                     ============== ==============    ============ ===============

 Exercisable at year-end                  6,599       $   24.56              -            -

 Weighted-average fair value of
 options granted during the year
                                       $   8.86                         $  12.03
</TABLE>


The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model. The following table shows the
weighted-average valuation assumptions used in 1999 and 1998:

<TABLE>
<CAPTION>
                                          1999                1998
                                     ---------------- -- ----------------

<S>                                     <C>                  <C>
    Expected life                        5.0 YEARS            8.0 years
    Risk-free interest rate              5.9%                 5.7%
    Volatility                          44.7%                38.2%
    Dividend yield                       1.0%                 0.8%
</TABLE>



                                       20
<PAGE>   21

9.    STOCK PLANS (CONTINUED)

The following table summarizes information about stock options outstanding as of
December 31, 1999:

<TABLE>
<CAPTION>
                                        Options Outstanding                             Options Exercisable
                        ----------------------------------------------------      --------------------------------
                                               Weighted         Weighted                             Weighted
                                                Average          Average                               Average
       Range of             Number             Remaining         Exercise              Number         Exercise
   Exercise Prices        Outstanding       Contractual Life       Price             Exercisable         Price
----------------------- ---------------- --------------------- -------------      ----------------- --------------
<S>                          <C>                 <C>             <C>                   <C>            <C>
      $  10 - 15              10,329             0.0 years       $   14.44               -                  -
         20 - 25             710,849             3.8                 20.54             6,599          $   24.56
                        ---------------- --------------------- -------------      ----------------- --------------
                             721,178             3.8 years       $   20.45             6,599          $   24.56
                        ================ ===================== =============      ================= ==============
</TABLE>


As permitted under SFAS No. 123, Accounting for Stock-Based Compensation, the
Company has elected to follow APB No. 25, Accounting for Stock Issued to
Employees and related Interpretations, in accounting for stock-based awards to
employees. Under APB No. 25, compensation expense is not recognized in the
Company's financial statements because the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant.

Under SFAS No. 123, compensation cost is measured at the grant date based on the
value of the award and is recognized over the vesting period. Had compensation
cost been determined under SFAS No. 123, based on the Black-Scholes value at the
grant date, the Company's pro forma net income and earnings per share would have
been as follows:

<TABLE>
<CAPTION>
                                                     1999                   1998                1997
                                            ------------------------ ------------------- --------------------
                                                         (in thousands, except per share data)
<S>                                              <C>                   <C>                 <C>
Net income - as reported                         $    45,773           $    26,034         $    36,905
Net income - pro forma                                45,590                26,000              36,905
Net income per share
    Basic:
       As reported                               $      2.43             $    1.33          $     1.83
       Pro forma                                        2.42                  1.33                1.83
    Diluted:
       As reported                               $      2.39             $    1.31          $     1.80
       Pro forma                                        2.38                  1.31                1.80
</TABLE>




                                       21
<PAGE>   22


9.    STOCK PLANS (CONTINUED)

OTHER STOCK PLANS

Under the Company's Employees' Stock Purchase Plan, all full-time eligible
employees may purchase shares of the Company's common stock up to 10% of their
respective compensation through payroll deductions. The purchase price under the
plan is 85% of the fair market value of the Company's common stock. Under this
plan, employees purchased 215,000 shares in 1999, 240,000 shares in 1998, and
172,000 shares in 1997.

The Company's Union Stock Plan provides stock awards to employees subject to
labor contracts who meet the eligibility and performance requirements of
providing a safe, reliably staffed, and injury-free work environment. The
Company allocated 50,000 shares in 1999, 10,000 shares in 1998, and 20,000
shares in 1997 for grant under this plan.



10.   LEASES

The Company leases certain terminals and revenue equipment under noncancellable
operating leases requiring minimum future rentals aggregating $133,419,000
payable as follows: 2000--$35,445,000; 2001--$33,897,000; 2002--$22,683,000,
2003--$11,711,000; 2004--$6,842,000; and thereafter $22,841,000. Rental expense
for operating leases was $34,687,000, $23,557,000 and $14,997,000 for 1999,
1998, and 1997, respectively.

Interest rate swaps were entered with major commercial banks to modify interest
characteristics of certain revenue equipment leases. The fair value of the
Company's interest rate swap agreements is estimated using present value
discounting techniques. These values represent the amounts the Company would
receive or pay to terminate the agreements taking into consideration current
interest rates.

11.   CREDIT FACILITIES

At December 31, 1999, the Company had $38,000,000 available through unsecured
credit facilities with certain banks. Borrowings under the agreements generally
bear interest at LIBOR plus .25%, and include covenants that require the Company
to maintain certain financial ratios, including a minimum level of consolidated
net worth. Under these facilities, interest expense, which approximates interest
paid, amounted to $716,000 in 1999, $937,000 in 1998, and $451,000 in 1997.



                                       22
<PAGE>   23

12.    CONTINGENCIES

Various legal proceedings arising from the normal conduct of business are
pending but, in the opinion of management, the ultimate disposition of these
matters will have no material effect on the financial condition or operations of
the Company.

The Company has received notices from the Environmental Protection Agency
("EPA") that it has been identified as a potentially responsible party ("PRP")
under the Comprehensive Environmental Response Compensation and Liability Act
(Superfund) at certain hazardous waste sites. Such designations are made
regardless of the Company's limited involvement at each site. The claims for
remediation have been asserted against numerous other entities which are
believed to be financially solvent and are expected to fulfill their
proportionate share. The Company accrues for losses associated with
environmental remediation obligations when such losses are probable and
reasonably estimable. Based on its investigations, the Company believes that its
obligation with regard to these sites is de minimis, although there can be no
assurances in this regard.

The Company's former parent is currently under examination by the Internal
Revenue Service for tax years 1994 and 1995, years prior to the spin-off of the
Company. The IRS has proposed substantial adjustments for these tax years for
multi-employer pension plan deductions. The IRS is challenging the timing, not
the validity of these deductions. The Company is unable to predict the ultimate
outcome of this matter; however, its former parent intends to vigorously contest
these proposed adjustments.


Under a tax sharing agreement entered into by the Company and its former parent
at the time of the spin-off, the Company is obligated to reimburse the former
parent for any additional taxes and interest that relate to the Company's
business prior to the spin-off. The amount and timing of such payments, if any,
is dependent on the ultimate resolution of the former parent's disputes with the
IRS and the determination of the nature and extent of the obligations under the
tax sharing agreement. The Company has established certain reserves with respect
to these proposed adjustments. There can be no assurance, however, that the
amount or timing of any liability of the Company to the former parent will not
have a material adverse effect on the Company's results of operations and
financial position.



                                       23
<PAGE>   24

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of Roadway Express, Inc.

We have audited the accompanying consolidated balance sheets of Roadway Express,
Inc. and subsidiaries as of December 31, 1999 and 1998, and the related
statements of consolidated income, shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Roadway Express,
Inc. and subsidiaries at December 31, 1999 and 1998, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States.




Akron, Ohio
January 21, 2000


                                       24
<PAGE>   25


SELECTED QUARTERLY FINANCIAL DATA
Roadway Express, Inc. and Subsidiaries

<TABLE>
<CAPTION>
                        1ST QUARTER              2ND QUARTER                 3RD QUARTER                 4TH QUARTER
                    1999           1998      1999          1998          1999           1998          1999          1998
                  -------------------------------------------------------------------------------------------------------------
                                                    (in thousands, except per share data)

<S>               <C>           <C>        <C>            <C>           <C>           <C>           <C>            <C>
Revenue           $605,278      $621,663   $621,122       $609,352      $652,218      $617,135      $934,596      $805,944
Operating income  $ 13,472      $ 10,824   $ 12,781       $  9,078      $ 16,219      $  8,315      $ 34,744      $ 15,843
Net income        $  7,939      $  6,609   $  7,624       $  5,307      $  9,645      $  4,328      $ 20,565      $  9,790
Net income per
   share:
    -basic        $   0.42      $   0.33   $   0.41       $   0.26      $   0.51      $   0.23      $   1.09      $   0.51
    -diluted      $   0.42      $   0.32   $   0.40       $   0.27      $   0.50      $   0.22      $   1.07      $   0.50
Common stock
    -High         $     18 5/8  $     26   $     20 7/16  $     26 3/4  $     23      $     18 7/8  $     23 3/8  $     16 3/16
    -Low          $     13 1/2  $     20   $     15 5/8   $     15 1/4  $     17 5/8  $     10 5/8  $     16 5/8  $      9 5/8
Dividends
   declared per
   share          $   0.05      $   0.05   $   0.05       $   0.05      $   0.05      $   0.05      $   0.05      $   0.05
Average shares
   outstanding
    -basic          18,800        20,108     18,803         20,110        18,815        19,267        18,823        19,120
    -diluted        18,985        20,337     19,072         20,352        19,122        19,473        19,142        19,297
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>


The Company uses 13 four-week accounting periods with 12 weeks in each of the
first three quarters and 16 weeks in the fourth quarter . There are
approximately 26,000 holders of record of common stock.

The Company's common stock trades on the NASDAQ Stock Market under the symbol
ROAD. The NASDAQ Stock Market is a highly regulated electronic securities market
comprised of competing Market Makers whose trading is supported by a
communications network linking them to quotation dissemination, trade reporting,
and order execution systems




                                       25
<PAGE>   26

HISTORICAL DATA
ROADWAY EXPRESS, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                             1999          1998          1997           1996          1995
                                         -----------------------------------------------------------------------
                                                          (in thousands except per share data)

<S>                                       <C>           <C>           <C>           <C>            <C>
Revenue                                   $ 2,813,214   $ 2,654,094   $2,670,944    $ 2,372,718    $ 2,288,844
Operating Expenses
   Salaries, wages and benefits             1,793,594     1,724,970    1,699,692      1,544,926      1,545,000
   Operating supplies and expenses            468,452       456,884      462,895        409,900        395,170
   Purchased transportation                   289,544       260,445      268,344        193,640        158,494
   Operating taxes and licenses                76,113        74,604       74,777         75,041         74,720
   Insurance and claims                        62,700        53,948       60,920         50,856         54,826
   Provision for depreciation                  45,492        41,422       49,010         62,681         71,669
   Net (gain) loss on sale of
     carrier operating property                   103        (2,239)      (5,955)        (8,256)          (267)
                                         -----------------------------------------------------------------------
Total operating expenses                    2,735,998     2,610,034    2,609,683      2,328,788      2,299,612
                                         -----------------------------------------------------------------------
Operating income (loss)                        77,216        44,060       61,261         43,930        (10,768)
Other income (expense) - net                    2,529         1,353         (605)        (1,460)        (3,107)
                                         -----------------------------------------------------------------------
Income (loss) before income taxes              79,745        45,413       60,656         42,470        (13,875)
Provision (benefit) for income taxes           33,972        19,379       23,751         20,582         (1,206)
                                         -----------------------------------------------------------------------
Net income (loss)                         $    45,773   $    26,034   $   36,905    $    21,888    $   (12,669)
                                         =======================================================================
Earnings (loss) per share - basic(1)      $      2.43   $      1.33   $     1.83    $      1.08    $     (0.62)
Earnings (loss) per share - diluted       $      2.39   $      1.31   $     1.80    $      1.07    $     (0.62)
Cash dividends declared per share (2)     $      0.20   $      0.20   $     0.20    $      0.15           n/a
Average number of shares outstanding
    -basic                                     18,811        19,617       20,210         20,338         20,557
    -diluted                                   19,119        19,815       20,526         20,533         20,557
Total shareholders' equity                $   290,955   $   249,609   $  249,436   $    224,596    $   205,642
Total assets                              $   831,408   $   748,833   $  743,986   $    709,624    $   713,607
Tons of freight - less-than-truckload           6,779         6,566        6,717          6,238          6,053
                - truckload                     1,665         1,632        1,620          1,403          1,444
                                         -----------------------------------------------------------------------
Total                                           8,444         8,198        8,337          7,641          7,497
Intercity miles                               755,855       718,238      724,683        650,602        642,224
Ton miles                                  11,011,683    10,752,532   10,923,998      9,873,927      9,647,661
----------------------------------------------------------------------------------------------------------------
</TABLE>


Notes: (1) Earnings per share for the year 1995 were retroactively computed
           based on the number of shares outstanding following the spin-off from
           the former parent.
       (2) Dividends declared for year 1995 were paid to former parent and are
           not applicable.



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