US XPRESS ENTERPRISES INC, 10-K, 2000-03-30

US XPRESS ENTERPRISES INC
10-K, 2000-03-30
TRUCKING (NO LOCAL)

Previous: COOPERATIVE BANKSHARES INC, 10-K, 2000-03-30

Next: FELCOR LODGING TRUST INC, 10-K, 2000-03-30

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE YEAR ENDED DECEMBER 31, 1999

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

COMMISSION FILE NUMBER 0-24806

U.S. XPRESS ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)

NEVADA 62-1378182
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

4080 JENKINS ROAD
CHATTANOOGA, TENNESSEE 37421
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: (423) 510-3000

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

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: CLASS A COMMON
STOCK, $0.01 PAR VALUE

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

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

The aggregate market value of the voting stock held by non-affiliates of the
Registrant was $69,524,398.50 as of March 15, 2000 (based upon the $8.50 per
share average of the closing bid and asked price on that date as reported by
NASDAQ). In making this calculation the Registrant has assumed, without
admitting for any purpose, that all executive officers, directors, and holders
of more than 10% of a class of outstanding common stock, and no other persons,
are affiliates.

As of March 15, 2000, the Registrant had 13,119,130 shares of Class A Common
Stock and 3,040,262 shares of Class B Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: The information set forth under Part III,
Items 11, 12, and 13 of this Report is incorporated by reference from the
Registrant's definitive proxy statement dated March 30, 2000 for the 2000 annual
meeting of stockholders.

<PAGE>
PART I

ITEM 1. BUSINESS

This report contains forward-looking statements relating to future events or the
future financial performance of the Company. Such forward-looking statements are
within the meaning of that term in Section 27A of the Securities Act and Section
21E of the Exchange Act. Such statements may include, but not be limited to,
projections of revenues, income or loss, capital expenditures, acquisitions,
plans for growth and future operations, financing needs or plans or intentions
relating to acquisitions by the Company, as well as assumptions relating to the
foregoing. Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified. Future events
and actual results could differ materially from those set forth in, contemplated
by or underlying the forward-looking statements.

GENERAL

U.S. Xpress Enterprises, Inc. (the "Company") provides transportation and
logistics services in the continental United States, Canada and Mexico. The
Company is one of the five largest publicly owned truckload carriers in the
United States. The Company is a leader in the time definite and expedited
services segment of the truckload market and in the adoption of proven new
technologies to improve service and reduce costs.

The Company has two operating units, U.S. Xpress, Inc. ("U.S. Xpress") and
CSI/Crown, Inc. ("CSI/Crown"). U.S. Xpress accounted for approximately 92% of
the Company's 1999 revenues.

U.S. Xpress provides four principal services: i) time-definite and expedited
services with lengths of haul of 400 to 3,000 miles; ii) regional services with
lengths of haul of 400 to 1,200 miles in the Western, Midwestern, and
Southeastern regions of the United States; iii) logistics services to the
airfreight industry; and iv) dedicated services.

CSI/Crown is a leading provider of logistics services to the floorcovering
industry. Services include: i) consolidation and distribution of
less-than-truckload shipments; ii) coordination of line-haul transportation to
Company operated service centers and third-party agent facilities for local
delivery; iii) warehousing and distribution services; and iv) retail sales of
installation supplies, including the Company's private-label "Installer's
Choice" brand of floorcovering installation products.

The Company's mission is to provide high levels of service to customers
utilizing proven technologies and skilled employees. The Company's operating and
growth strategies are focused on its target markets, while capitalizing on
evolving trends and growth markets in the transportation industry. These
strategies include:

1) POSITION THE COMPANY AS THE PREMIER HIGH SERVICE PROVIDER. The Company
specializes in providing time-definite and expedited truckload services to
customers that operate supply chain management systems, and particularly those
that manage their flow of raw materials, in-process products and finished goods
on a "just-in-time" basis. The Company was one of the first in the industry to
establish time-definite pickups and deliveries as a standard for service
quality. Time-definite service is a critical element in efficient supply chain
and distribution systems management. In addition, the Company is one of the few
truckload carriers to provide expedited service throughout the continental
United States and in parts of Canada and Mexico. This is particularly important
to shippers that operate multiple, geographically diverse facilities. In
addition, the Company has consistently been a leader in the truckload industry
in providing customers with easy access to operating and service-related
technologies that provide value to shippers. The Company's electronic commerce
("E-Commerce") capabilities, in particular, differentiate the Company from most
other truckload suppliers. The Company provides its customers with the ability
to use E-Commerce through the Internet, private networks and third-party
networks.

2) EXPAND CORE CARRIER RELATIONSHIPS WITH SHIPPERS. Most larger shippers are
reducing the number of carriers they use and are expanding relationships with
their most capable carriers. Those companies selected for the most significant
supplier relationships with shippers are called "core carriers". This trend is
resulting in opportunities due to the Company's broad range of service
capabilities which create an advantage over many of its competitors for the
reduced number of core carrier positions

2
<PAGE>

with major shippers and with third-party logistics providers. The Company offers
long-haul, mid-range and regional truckload services, time-definite and
expedited services and dedicated fleet services. This range of capabilities,
coupled with capacity of 4,734 U.S. Xpress owned, leased, and owner-operator
tractors at December 31, 1999, has positioned the Company as a core carrier for
many of the largest shippers in North America. In seeking these relationships,
the Company emphasizes its service capabilities and capacity, as well as its
commitment to flexibility, responsiveness and analytical planning. Customers
that have designated the Company as a core carrier include: E.I. DuPont, Federal
Express, Proctor and Gamble, Hewlett-Packard, Burlington Air Express, and
Kimberly Clark.

3) POSITION THE COMPANY AS A DRIVER-FRIENDLY EMPLOYER. The labor market for
qualified professional truck drivers is extremely competitive, providing an
advantage to driver-friendly employers like the Company. The Company focuses
significant resources and attention on the successful recruiting, hiring,
training and retention of qualified solo and team drivers. At December 31, 1999,
the Company operated 4,734 tractors in its fleet, an increase of 7.2% from
December 31, 1998. This increase was achieved through internal growth and an
aggressive owner-operator recruiting program. Management believes that its
success in hiring and retaining qualified drivers is due to its high-quality
equipment; high utilization, which translates into better take-home pay for
drivers; "driver-friendly freight" that does not require labor or lengthy
delays; flexible work schedules that enable drivers to better meet their
personal obligations and lifestyles; and creative recruiting strategies that
recognize the changing demographics of the American work force and that seek to
expand the diversity of the driver fleet. Management also believes that it is
critical for the Company to remain in the upper tier of carriers for total
driver compensation in order to continue to attract and retain experienced
drivers. Ongoing success in recruiting, training and retaining sufficient
drivers is critical to the Company in achieving its growth objectives.

4) EMPHASIZE RELATIONSHIPS WITH LOGISTICS PROVIDERS. Many major manufacturers
and distributors are increasingly focusing on their core competencies and
outsourcing some or all of their logistics and transportation requirements to
third parties. Some shippers recognize significant cost savings and improved
performance by outsourcing transportation management requirements and focusing
their resources on their core businesses. Logistics providers typically manage
transportation analysis and purchasing, and supply chain coordination for their
customers. This trend is providing opportunities for the Company to establish
working relationships with important logistics suppliers, and thereby obtain
significant new customer accounts with virtually no sales cost. Industry
analysts have estimated that logistics providers manage about 5% of freight in
the U.S., and this share is expected to grow significantly during the next
decade. A small number of logistics providers have moved to the forefront of
this industry and have awarded many opportunities to the Company as their
business volumes have increased.

The Company has established relationships with many of the leading logistics
suppliers, including: J.B. Hunt Logistics, Menlo Logistics and Ryder Integrated
Logistics. These relationships have resulted in significant opportunities to
serve major shippers that use these third-party logistics firms. Management
believes that as the Company continues to demonstrate its capabilities and
performs to the demanding requirements of logistics services providers, it can
earn additional business opportunities from other quality logistics providers.
On March 14, 2000 the Company signed a Letter of Intent with five other large
nationwide transportation companies - Covenant Transport, Inc.; J.B. Hunt
Transport Services, Inc.; M.S. Carriers, Inc.; Swift Transportation Co., Inc.
and Werner Enterprises, Inc. - pursuant to which the parties agreed to merge
their logistics business units into a commonly-owned Internet based
transportation logistics company, to be named Transplace.com.

5) PURSUE ACQUISITION OPPORTUNITIES. The Company has grown significantly through
eleven strategic acquisitions in the 1990's. U.S. Xpress now includes the
operations of Southwest Motor Freight, Hall Systems, National Freight Systems,
Michael Lima Transportation, JTI, Inc., Victory Express, Inc and PST Vans, Inc.
CSI/Crown's operations include several acquired companies, including: Crown
Transport Systems and CSI/Reeves; and assets purchased from Great Southern
Xpress and Rosedale Transport. These acquisitions have significantly expanded
the Company's capabilities and capacity and have been a significant contributor
to the Company's growth. While acquisitions remain an important part of the
Company's long-term strategy, the Company is placing its primary emphasis in
2000 on improving its operating results.

3
<PAGE>

SERVICES

TIME DEFINITE SERVICE
The Company's principal service specialty is time-definite service, which is the
pickup and delivery of freight to specific schedules over distances ranging from
400 to 3,000 miles. Time-definite transportation requires pickups and deliveries
be performed to exact appointment times or within a specified number of minutes.
This service is an essential point of differentiation from many other
transportation companies, which typically provide service only within time
"windows" ranging from a few hours to a few days. Time-definite service is
particularly important to the Company's customers that operate in a just-in-time
environment, distribution and retail inventory systems and to customers in the
air freight and logistics industries.

EXPEDITED SERVICE
The Company's expedited service consists of the pick up and delivery of freight
on prescribed schedules at transit times comparable to deferred airfreight
service. The Company is able to meet these transit times using team drivers or
relays at much lower cost than deferred airfreight. In 1999, revenue from
expedited services to manufacturers, distributors and airfreight companies was
$205.3 million. Shipments from airfreight customers in 1999 increased to $64.1
million and accounted for 31% of expedited service revenue. The remaining 69%
was derived from service to manufacturers, distributors, retailers, freight
forwarders, and consolidators.

REGIONAL SERVICE
About 70% of the freight transported in the U.S. moves over distances of less
than 1,000 miles. In addition, the average length of haul of shipments is
shrinking as manufacturers and distributors increasingly bring the various
elements of their supply and distribution chains into closer geographical
proximity. These factors make regional service capabilities an important aspect
in qualifying the Company for core carrier relationships. The Company provides
regional service involving shipments of 400-1,200 miles in the Western,
Midwestern and Southeastern regions of the United States. In 1999, revenues from
regional service totaled $163.0 million.

DEDICATED SERVICES
Some shippers use transportation or logistics companies to manage or operate
their private trucking operations. Many of these shippers have historically
operated their own fleets to transport their products. The Company's management
expertise, capacity and systems have positioned it to provide dedicated services
in which specific tractors and drivers are assigned to a specific customer
account. Through dedicated service relationships, customers obtain assurance of
capacity to meet their requirements. U.S. Xpress benefits by generating better
equipment utilization, increased business volume from important customers and by
improving planning of resources. Driver safety is enhanced because the same
drivers travel the same lanes repeatedly. Drivers also benefit through enhanced
scheduling, reduced downtime between loads and more predictability of their
off-duty time. These dedicated accounts represented $64.1 million in revenues in
1999. In addition, approximately 600 tractors at U.S. Xpress are dedicated to
specific customers or geographic lanes.

LOGISTICS SERVICES
U.S. Xpress provides logistics services utilizing Company equipment and a
network of contract carriers. Most of the customers for these services are
airlines, airfreight forwarders and customs brokers involved in the airfreight
industry. However, the Company anticipates significant growth from
non-traditional customers in the future as it further develops its capabilities.
The contract carrier network also provides supplementary capacity to U.S. Xpress
when U.S. Xpress equipment is not available. On March 14, 2000 the Company
signed a Letter of Intent with five other large nationwide transportation
companies - Covenant Transport, Inc.; J.B. Hunt Transport Services, Inc.; M.S.
Carriers, Inc.; Swift Transportation Co., Inc. and Werner Enterprises, Inc. -
pursuant to which the parties agreed to merge their logistics business units
into a commonly-owned Internet based transportation logistics company, to be
named Transplace.com.

FLOORCOVERING LOGISTICS
CSI/Crown is a leading provider of logistics services to the floorcovering
industry. CSI/Crown picks up floorcovering products from manufacturers;
consolidates shipments into truckloads bound for specific destinations;
contracts with U.S. Xpress and other truckload carriers to deliver the products
to CSI/Crown service centers or to contract agents and delivery services; and
delivers the products to floorcovering distributors, retailers, and large-scale
end users in all 50 states, Canada and Mexico. In

4
<PAGE>

addition, CSI/Crown provides warehouse facilities and other specialized services
such as custom carpet cutting and selling floorcovering installation supplies.
CSI/Crown also provides dedicated services by assigning specific equipment to
specific customers and uses the equipment to promote the customers' brands on
the equipment. In this way, customers obtain the benefits of assured capacity
and brand promotion without incurring the management costs and inherent
inefficiencies of operating a private fleet. CSI/Crown benefits by being assured
consistent volume for its dedicated equipment and drivers.

MARKETING AND CUSTOMERS
The Company's success in marketing its services is a result of commitment to
service, capabilities, capacity, and flexibility, responsiveness, analytical
planning and information technology management. The Company's marketing
department and sales personnel identify new business prospects and implement
programs to obtain and retain customer accounts.

Mr. Quinn, the Company's Co-Chairman, and Mr. Lusk, the Executive Vice President
of Marketing, are directly involved in marketing the Company's services at the
national account level while supporting local sales activities. In addition, the
Company employs 26 full-time marketing and national account representatives, who
have responsibility for specific geographic areas.

The Company's top 50 customers, most of which have designated the Company as a
core carrier, accounted for approximately 63% of revenues in 1999. During 1999,
no single customer accounted for more than 5% of the Company's revenue.

TECHNOLOGY
The Company utilizes proven new technologies that yield both competitive service
advantages and the ability to more profitably serve its customers. The Company
has long been a leader in the truckload industry in adopting new technology and
successfully integrating technology with operational systems and processes.
Management believes that the Company's information systems are one of its
principal competitive advantages.

QUALCOMM
The Company is a leader in the innovation of computer information systems that
are integrated with the QUALCOMM OmniTRACS(R) satellite based mobile
communications system. The OmniTRACS(R) system was first utilized by the Company
in 1990 and is tightly integrated with operational systems and the principal
office functions of payroll, billing, fuel, and accounting. The OmniTRACS(R)
system simplifies the location of equipment and permits timely and efficient
communication of critical operating data, such as shipment orders, loading
instructions, routing, fuel, payroll, safety, traffic and maintenance
information. For example, load planners assign loads by entering the required
information into the system. Drivers then access the previously-planned load
from the system and acquire all the necessary customer, order and routing
information through their onboard display unit, thus eliminating waiting time
and inefficient dependence on truck stop telephones. The OmniTRACS(R) system
permits transmission of load assignments directly to the onboard display unit
and will signal a driver when an assignment is available so that he or she may
sleep in the tractor pending an assignment. In addition, through the
OmniTRACS(R) system, drivers have direct access to the Company's IBM AS/400
computer. This capability enables the driver to access information from
operations and payroll systems, such as requesting payroll settlement
information and cash advances while on the road.

LOAD PLANNING/DISPATCH
The Company operates the SABRE Decision Support System ("QDSS"), a dispatch
optimization software system. This software package provides the capability to
efficiently "match" equipment and drivers to available loads. QDSS maximizes
utilization of the Company's equipment and contributes to improved customer and
driver satisfaction. Through QDSS, the Company seeks to identify potential
problems of too much or too little freight in a particular geographic area. The
Company then seeks additional freight in the impacted area, or its logistics
group seeks alternative carriers to handle overflow loads.

5
<PAGE>

FUEL OPTIMIZATION
The Company uses the EXPERT FUEL(R) decision support software from Integrated
Decision Support Corporation to optimize tractor fuel purchases by considering
all relevant fuel issues and identifying the best fuel purchase locations and
quantities at the time of dispatch. EXPERT FUEL(R) minimizes total fuel costs
with detailed route and fuel purchase instructions, optimization options, and
evaluation of terminal out-of-route purchases.

DOCUMENT IMAGING
The Company utilizes state of the art imaging systems for the scanning, storage,
and retrieval of a variety of business documents. These systems include the use
of barcodes and optical character recognition (OCR) when scanning trip packets
and driver logs. Other documents supporting each delivery, such as bills of
lading, seal manifests, confirmations, expense tickets, weight tickets, and
lumper receipts are scanned daily onto optical disks or other digital storage
media. In addition, Department Of Transportation (DOT) inspection reports and
tractor/trailer registrations are scanned and archived for retrieval. These
systems reduce the clerical staff time required to enter and retrieve
information, while increasing the availability, integrity, and utilization of
data by Company personnel and its customers.

E-COMMERCE
The Company's E-Commerce capabilities provide customers with an efficient means
of communicating with the Company and performing a myriad of tasks. These
capabilities have been developed over the last ten years, as the Company
continuously enhanced its electronic communication capabilities with customers.
Until 1996, most of the electronic communication with customers was conducted
using private computer networks or networks administered by third parties. In
1996, the Company introduced its proprietary Internet-based "Xpress Connect"
system that enables customers to perform E-Commerce functions via the Internet.

The Company's automated administrative and operating systems enable customers to
obtain freight rates, place orders, obtain real-time information on the status
of their shipments, receive invoices, pay bills, obtain optically-imaged proofs
of delivery and generate reports. This system provides significant operating
advantages to U.S. Xpress and its customers, including real-time information
flow, reduction or elimination of paperwork, error-free transcription and
reductions in clerical personnel. The Company's broad range of E-Commerce
capabilities enables customers to obtain and exchange information with the
Company in a variety of computer formats.

Management believes that its E-Commerce capabilities are an important aspect of
the total service it provides to customers. Management also believes that it
must continue to enhance its E-Commerce capabilities to ensure future
competitiveness in its industry. Enhanced and updated versions of the Company's
entire E-Commerce offerings are slated for release during the first half of
2000. "Xpress Connect 2000" replaces the current highly functional Internet
system, adds customizable reporting capabilities, and a sleek new design.
"XpressEDI" has been updated with an entire new front-end that provides
multicasting VPN capabilities as well as FTP and standard VAN communication
services. The Company's Internet web site, located at www.usxpress.com, provides
customer-specific information to qualified customers and provides security
protection to ensure that only specific customers can access information about
their orders.

EATON VORAD
Eaton Vorad collision avoidance systems are specified equipment on tractors used
by U.S. Xpress. These radar-based systems are designed to detect traffic ahead
and to the side of trucks, and to provide drivers with additional response time,
resulting in a safer vehicle for drivers and the motoring public.

TRANSIT TECHNOLOGIES
The Pre-PassTM technology enables a tractor to stop at one weigh station and
receive clearance for travel on participating highways. After the truck conducts
an initial visit to a weigh station, information regarding the truck and its
contents are downloaded onto a transponder located on the tractor. Thereafter, a
sensor located along the highway reads the information contained in the
transponder and allows the truck and its contents to be electronically cleared
without the delays associated with multiple weigh station visits. The Company
participated in beta tests for these technologies and equipped a majority of its
tractors with these systems in 1997. These technologies enhance fuel economy,
improve equipment utilization, improve transit times and reduce accidents.

6
<PAGE>

YEAR 2000 COMPLIANCE
The Company has completed all Year 2000 modifications to its software and
operating systems. The Company has not experienced any interruption of service
from suppliers or to customers resulting from Year 2000 system issues. In the
event that any of the Company's significant suppliers or customers have not
successfully achieved Year 2000 compliance, the Company's business or operations
could be adversely affected. The costs to the Company in achieving Year 2000
compliance were not material.

EQUIPMENT
The Company determines the specifications of equipment purchases based on such
factors as vehicle and component quality, warranty service, driver preferences,
new vehicle prices and the likely resale market. Because the fleet is
standardized and has warranty agreements with original equipment suppliers, the
Company has minimized parts inventories and maintenance costs. The Company has
negotiated a substantial portion of its repurchase commitments from its primary
equipment vendors for disposal of a substantial portion of its equipment. These
agreements reduce the Company's risks related to equipment disposal values.

The following table shows the type and age of U.S. Xpress company-owned and
leased equipment at December 31, 1999:

Model Year Tractors Trailers
---------- -------- --------
2000 898 982
1999 2,211 3,396
1998 1,105 1,407
1997 1 1,370
1996 25 1,932
1995 11 1,261
1994 & Prior - 1,370
--------- --------
Total 4,251 11,718
========= ========

TRACTORS
In the early 1990s, the Company's management and drivers worked with the
Company's principal tractor supplier, Freightliner, to design improvements in
its conventional tractors, such as more spacious and functional sleeper
compartments and improved aerodynamics. In 1996, the Company was among the first
to purchase the new Freightliner Century Class tractors, which provided superior
levels of operating safety, fuel efficiency, information management capabilities
and driver comforts. The Company was among the first to use Detroit Diesel 60
Series engines, which provided significant performance improvements and
maintenance cost reductions over non-electronic engines. The Company's engines
are designed with enough power to enable the tractor to stay with the flow of
traffic on most upgrades, which enhances safety and minimizes driver
frustration.

The Company now purchases or leases Century Class tractors or Volvo VIN 770s for
substantially all of the additions and replacements to its fleet. Tractors are
typically replaced every 36 to 48 months, generally well in advance of the need
for major engine overhauls. This schedule can be accelerated or delayed based on
resale values in the used truck market and the differential between those values
and new truck prices. In January 1998, the Company acquired Victory Express,
Inc. and in August 1998, the Company acquired PST Vans, Inc. These two
acquisitions resulted in the Company acquiring ownership and assuming leases for
tractors of various ages that were generally older than the Company's fleet. As
of December 31, 1999 substantially all tractors associated with the acquisitions
have been replaced.

All Company tractors are equipped with Eaton Vorad anti-collision systems,
electronic speed controls, anti-lock braking systems for improved safety, and
Qualcomm and in cab e-mail for improved communications. Over 80% of the tractor
fleet is equipped with Eaton automatic shift transmissions and approximately 35%
of the fleet with automatic traction control. All engines have fuel incentive
programming for increased fuel economy.

7
<PAGE>

TRAILERS
The Company's dry van trailers have cubic capacity that is among the largest in
the industry. In 1997, the Company began purchasing composite plate trailers
from Wabash National Corporation that are more durable, have greater cubic
capacity and stiffer sidewalls, and do not fracture as easily as conventional
aluminum trailers. The Company currently purchases Wabash Duraplate trailers for
substantially all of the additions and replacements to its fleet. In addition,
approximately 75% of the trailers are equipped with air ride suspension leading
to softer rides which result in less load damage.

COMPETITION
The transportation services business is extremely competitive. The Company
competes primarily with other truckload carriers and providers of deferred
airfreight service. Competition from railroads and providers of intermodal
transportation likely would increase if service standards for these modes were
dramatically improved.

Generally, competition for the freight transported by the Company is based on
service, efficiency and pricing. Historically, increased competition has created
downward pressure on the truckload industry's pricing structure. Prolonged
weakness in freight markets or downward pressure on freight rates could
adversely affect the Company's results of operations or financial condition.
Some competitors have greater financial resources, operate more equipment and
transport more freight than the Company.

REGULATION
The Company is a motor carrier that is subject to safety regulations promulgated
by the Federal Motor Carrier Safety Administration of the Department of
Transportation and various laws and regulations enforced by state agencies.
These regulatory authorities have broad powers, generally governing activities
such as authority to engage in motor carrier operations, accounting systems,
certain mergers, consolidations, acquisitions and periodic financial reporting.
Subject to Federal, State and Provincial regulatory authorities, the Company may
transport most types of freight to and from any point in the United States,
Mexico and certain Canadian provinces over any route selected by the Company.
The trucking industry is subject to possible regulatory and legislative change
which could affect the economics of the industry.

The Company's operations are also subject to various Federal, State and Local
environmental laws dealing with transportation, storage, presence, use, disposal
and handling of hazardous materials, discharge of storm water and underground
fuel storage tanks. The Company believes that its operations are in substantial
compliance with current laws and regulations and does not know of any existing
condition that would cause non-compliance with applicable environmental
regulations to have a material adverse effect on the Company's business or
operating results.

SAFETY AND RISK MANAGEMENT
The Company is committed to safe operations. The Company's emphasis on safety is
demonstrated through equipment specifications and active safety and loss
prevention programs. These programs reinforce the importance of driving safely,
abiding by all laws and regulations such as speed limits and driving hours,
performing regular equipment inspections and acting as good citizens on the
road. The Company's accident review committee meets regularly to review any new
accidents, take appropriate action related to drivers, examine accident trends
and implement changes in procedures or communications to address any safety
issues.

Management's emphasis on safety also is demonstrated through its equipment
specifications, such as anti-lock brakes, electronic engines, special mirrors,
conspicuity tape and the implementation of Eaton Vorad collision avoidance
systems on all tractors. The Eaton Vorad system is designed to provide drivers
with visible and audible warnings when other vehicles are beside them and when
vehicles ahead are traveling at slower speeds than the truck. The system
provides drivers with additional response time to prevent accidents.

The Company requires prospective drivers to meet higher qualification standards
than those required by the DOT. The DOT requires the Company's drivers to obtain
national commercial driver's licenses pursuant to the regulations promulgated by
the

8
<PAGE>

DOT. The DOT also requires that the employer implement a drug-testing program in
accordance with DOT regulations. The Company's program includes pre-employment,
random, reasonable cause, post-accident and post-injury drug testing.

Interstate motor carrier operations are subject to safety requirements
prescribed by the DOT. Such matters as equipment weight and dimensions are also
subject to federal and state regulations. DOT evaluates carriers and provides
safety fitness ratings based on conformance with requirements and accident
frequency. U.S. Xpress and CSI/Crown each have satisfactory safety fitness
ratings. Victory Express and PST Vans, which were acquired by the Company in
1998, also had satisfactory ratings at the time of their acquisitions.

The Company secures appropriate insurance coverage at cost-effective rates. The
primary claims arising in the Company's business consist of cargo loss and
damage and auto liability (personal injury and property damage). The Company
currently purchases primary and excess coverage for these types of claims at
levels that management believes are sufficient to adequately protect the Company
from significant claims. The Company also maintains primary and excess coverage
for damage to physical properties and equipment damage resulting from collisions
or other losses. The Company believes that its insurance and claims expense as a
percentage of operating revenue is one of the best in the industry.

HUMAN RESOURCES
At December 31, 1999, the Company and its subsidiaries employed 7,540 full-time
associates, of whom 5,935 were drivers, 215 were mechanics and other maintenance
personnel, 1,125 were office associates for U.S. Xpress, the truckload division,
and 265 were employed by CSI/Crown, the non-truckload division. U.S. Xpress also
had contracts with independent contractors (owner-operators) for the services of
615 tractors that provide both tractor and qualified drivers. None of the
Company's employees are represented by a union or collective bargaining
agreement, and the Company considers relations with its employees to be good.

DRIVER RECRUITING, TRAINING AND RETENTION
The Company recognizes that it is paramount to recruit, train, and retain a
professional driver workforce. The Company also realizes that competition for
qualified drivers will remain high and will be impacted by declining
unemployment rates, changes in workforce demographics, and reduced government
funding of training programs. Although the Company has experienced no
significant inability to attract qualified drivers, no assurance can be given
that a shortage of qualified drivers in the future will not adversely affect the
Company.

All Company drivers must meet or exceed specific guidelines relating to their
safety records, driving experience, and personal evaluations, including a
physical examination and mandatory drug testing as outlined in DOT regulations.
After an offer of employment is extended, a driver must successfully complete
training in all aspects of Company policies and operations, safety philosophy,
and fuel efficiency. All drivers must successfully complete a Company driving
exam and possess a valid Commercial Drivers License. The Company maintains an
ongoing safety and efficiency program to ensure that drivers comply with safe
and efficient operating procedures.

Senior management is actively involved with the development and retention of
drivers. Recognizing the shortage of new drivers entering the industry, the
Company has since January 1998 operated a professional driving school at its
facility in Medway, Ohio. The school was certified in 1998 by the Professional
Truck Driving Institute of America. The Company also contracts with driver
schools managed by independent organizations as well as community college
programs throughout the United States. The Company believes that the continued
and effective development of the driver training schools and training program
will provide the Company with an additional source of drivers.

Management believes that there are several key elements to recruiting and
retaining experienced professional drivers, such as an attractive compensation
and benefits package, meeting reasonable driver expectations, providing
equipment with desirable driver amenities, and providing a company-wide culture
of support for driver needs. Drivers are compensated on the basis of miles
driven. The starting rate per mile is determined by the driver's experience
level and will increase with the driver's length of service with the Company.
Additional compensation may be earned through loading /unloading or stop pay,
and mileage bonuses. Drivers employed by the Company participate in Company
sponsored health, life, dental, and vision plans and are

9
<PAGE>

eligible to participate in a 401(k) Retirement Plan and an Employee Stock
Purchase Plan. Additional benefits include paid holidays, vacation pay, and
pre-paid phone cards.

The Company believes that meeting and managing driver's reasonable expectations
is critical to driver satisfaction and retention. From the solicitation of
driver friendly freight (no loading/unloading, decreased dwell time, drop/hook,
etc.), to training recruiters to provide candidates with a realistic view of
work requirements and the lifestyle of a long-haul driver, to getting drivers
home on a regular basis, the Company is dedicated to meeting our commitments.

The Company's late model Freightliner and Volvo conventional tractors are
designed for driver comfort and safety. Standard equipment includes automatic
transmissions, air ride suspensions, double sleeper bunks, air conditioning,
power steering, electronic engine brakes, and Eaton Vorad collision avoidance
systems.

Management believes that maintaining a culture of driver support through
flexible work schedules that enable drivers to accommodate personal obligations
and lifestyles, leveraging technology (in cab e-mail, Internet services, etc.)
that enables drivers to remain in touch with their families when on the road,
managing driver home time, seeking drivers' input in the decision making process
and seeking mutually satisfactory solutions, and providing career advancement
opportunities for drivers are key factors for developing one of the Company's
most valuable assets.

INDEPENDENT CONTRACTORS
The Company recognizes the benefits of augmenting its service capacity through
the use of independent contractors. Independent contractors provide their own
tractors and pay for all the expenses of operating their own equipment,
including wages and benefits, fuel, physical damage insurance, maintenance,
highway use taxes and debt service. Therefore, less capital is required for the
Company's growth. The Company has an aggressive independent contractor
recruiting program, with 615 contractors under contract at December 31, 1999.
The Company intends to continue adding independent contractors.

FUEL
Shortages of fuel or increases in fuel prices could have a materially adverse
effect on the operations and profitability of the Company. Many of the Company's
customer contracts contain fuel surcharge provisions to mitigate increases in
the cost of fuel ($2.1 million for the year ended December 31, 1999 compared to
$0 for the same period in 1998). However, there is no assurance that such fuel
surcharges can be used to offset future increases in fuel prices. Additionally,
at times fuel purchase contracts are used to mitigate the effects of increases
in the prices of fuel. During the later part of 1999, fuel prices steadily
increased. The Company maintains fuel storage tanks at certain of its terminals.
Leakage or damage to these tanks could subject the Company to environmental
clean-up costs. The Company believes it is in compliance with all laws and
regulations relating to maintenance of such fuel storage tanks.

10
<PAGE>

ITEM 2. PROPERTIES

The following table provides information regarding the Company's facilities:

<TABLE>
<CAPTION>
Company Location Facility Functions Owned or Leased
---------------- ------------------ ---------------
<S> <C> <C>
U.S. XPRESS:
Austell, Georgia Drop Yard Leased
Bayonne, New Jersey Drop Yard Leased
Birmingham, Alabama Terminal Leased
Boise, Idaho Drop Yard Leased
Bordertown, New Jersey Drop Yard Leased
Bowling Green, Kentucky Drop Yard Leased
Chattanooga, Tennessee Corporate Office Leased
Chicago, Illinois Drop Yard Leased
Dallas, Texas Drop Yard Leased
Denver, Colorado Drop Yard Leased
El Paso, Texas Drop Yard Leased
Fontana, California Terminal, Maintenance, Customer Service, Leased
Fleet Services, Driver Training
Greenville, South Carolina Drop Yard Leased
Hayward, California Drop Yard Leased
Houston, Texas Drop Yard Leased
Jacksonville, Florida Drop Yard Leased
Kent, Washington Drop Yard Leased
Knoxville, Tennessee Drop Yard Leased
Lincoln, Nebraska Terminal, Maintenance, Customer Service, Owned
Fleet Services, Driver Training, Independent
Contractor Recruiting
Laredo, Texas Drop Yard Leased
Medway, Ohio Terminal, Maintenance, Customer Service, Leased
Fleet Services, Driver School, Driver Recruiting
Memphis, Tennessee Drop Yard Leased
Oklahoma City, Oklahoma Terminal, Maintenance, Customer Service, Leased
Fleet Services, Driver Training, Driver Recruiting
Phoenix, Arizona Drop Yard Leased
Sacramento, California Terminal, Fleet Services Leased
Salt Lake City, Utah Terminal, Maintenance, Customer Service, Owned
Fleet Services, Driver Training
Sioux City, South Dakota Terminal Leased
Troutdale, Oregon Drop Yard Leased
Tunnel Hill, Georgia Terminal, Maintenance, Fleet Services, Leased
Driver Training

CSI/CROWN:
Akron, Ohio Distribution Center Leased
Albany, New York Distribution Center Leased
Baltimore, Maryland Distribution Center Leased
La Mirada, California Distribution Center Leased
Calhoun, Georgia Distribution Center Owned
Denver, Colorado Distribution Center Leased
Detroit, Michigan Distribution Center Leased
Eagan, Minnesota Distribution Center Leased
Fresno, California Distribution Center Leased
Grand Prairie, Texas Distribution Center Leased
Hayward, California Distribution Center Leased
Houston, Texas Distribution Center Leased
LeMont, Illinois Distribution Center Leased
Oklahoma City, Oklahoma Distribution Center Leased
Pittsburgh, Pennsylvania Distribution Center Leased
</TABLE>

11
<PAGE>

<TABLE>
<CAPTION>
Company Location Facility Functions Owned or Leased
---------------- ------------------ ---------------
<S> <C> <C>
CSI/CROWN (CONT.):
Rancho Cordova, California Distribution Center Leased
Rochester, New York Distribution Center Leased
Salt Lake City, Utah Distribution Center Leased
San Antonio, Texas Distribution Center Leased
San Diego, California Distribution Center Leased
Tunnel Hill, Georgia Corporate Office, Distribution Center Leased
</TABLE>

In late 1998, the Company entered into a five-year lease of a newly constructed
corporate office and operations facility in Chattanooga, Tennessee. By early
January 1999, the Company had completed the move of approximately 500 employees
from previously leased facilities to the new headquarters. The new facility
encompasses nearly 100,000 square feet of office space and includes
state-of-the-art information management and communications systems.

Most of the Company's operating facilities and terminals are leased. Through its
acquisition of Victory Express in 1998, the Company acquired a leased facility
in Medway, Ohio. In the August 1998 acquisition of PST Vans, the Company
acquired ownership of the facility based in Salt Lake City, Utah.

CSI/Crown is based in Tunnel Hill, Georgia, approximately 25 miles from the
Chattanooga location. The Tunnel Hill facility includes a 101-door loading dock
facility in which floorcovering shipments from multiple manufacturers are
consolidated into truckloads for delivery to Company-owned and agent-operated
distribution service centers. All CSI/Crown facilities operate as distribution
centers performing consolidation, warehousing, and local distribution.

ITEM 3. LEGAL PROCEEDINGS

On May 27, 1999, a settlement agreement and release was completed between the
Company and Employee Solutions, Inc. ("ESI"), pursuant to which the Company's
and ESI's claims in pending litigation were resolved. As a result of the
settlement, the Company recorded a non-recurring charge of $1.3 million to
operating expense in 1999.

The Company is party to certain other legal proceedings incidental to its
business. The ultimate disposition of these matters, in the opinion of
management, based in part on the advice of legal counsel, will not have a
material adverse effect on the Company's financial position or results of
operations.

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

During the quarter ended December 31, 1999, no matters were submitted to a vote
of security holders.

12
<PAGE>

PART II

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

COMMON STOCK AND STOCKHOLDER DATA
The Company's Class A Common Stock is traded on the NASDAQ National Market
System under the symbol XPRSA. At March 15, 2000, there were 194 registered
stockholders and an estimated 2,500 beneficial owners. At March 15, 2000 there
were 13,119,130 shares of Class A Common Stock outstanding and 3,040,262 shares
of Class B Common Stock outstanding. On March 15, 2000, the closing price for
the Common Stock was $8.50. Listed below is the trading activity for each
quarter in the last two fiscal years:

QUARTER ENDING HIGH LOW
- -------------------------------------------------------------------
March 31, 1998 24.88 18.38
June 30, 1998 21.12 15.50
September 30, 1998 18.38 10.38
December 31, 1998 16.75 9.38
March 31, 1999 17.75 11.00
June 30, 1999 12.88 8.50
September 30, 1999 11.25 5.38
December 31, 1999 9.19 5.88

DIVIDENDS
The Company does not pay cash dividends and intends to continue to retain
earnings to finance the growth of the Company for the foreseeable future.

13
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA
(In thousands, except per share and operating data)

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, MARCH 31,
--------------------------------------- -------------------------- -------------------------
1999 1998 1997(5) 1997(4) 1996(5) 1997 1996
- ----------------------------------------------------------------------------- -------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(1)
Operating revenue:
U.S. Xpress $ 656,029 $ 513,154 $ 370,674 $ 290,800 $ 228,484 $ 307,928 $ 261,533
CSI/Crown 57,713 74,533 72,330 57,645 51,158 65,845 47,817
Intercompany (5,530) (6,286) (9,169) (6,173) (8,386) (10,954) (9,653)
-------------------------------------- --------------------------- ------------------------
Consolidated $ 708,212 $ 581,401 $ 433,835 $ 342,272 $ 271,256 $ 362,819 $ 299,697
====================================== =========================== ========================
Income from operations $ 31,527 $ 44,405 $ 31,143 $ 26,151 $ 14,784 $ 19,776 $ 5,251
Income before income taxes $ 19,139 $ 34,497 $ 25,592 $ 21,983 $ 10,627 $ 14,236 $ 75
Net income $ 11,381 $ 20,717 $ 15,362 $ 13,191 $ 5,708 $ 7,878 $ 94
Earnings per share - basic $ .77 $ 1.38 $ 1.17 $ .98 $ .47 $ .65 $ .01
Weighted average number
of shares outstanding - basic 14,785 15,038 13,126 13,467 12,081 12,082 12,003
Earnings per share - diluted $ .77 $ 1.37 $ 1.16 $ .97 $ .47 $ .65 $ .01
Weighted average number
of shares outstanding - diluted 14,852 15,162 13,236 13,582 12,151 12,168 12,076

TRUCKLOAD OPERATING DATA(2)
Total revenue miles (in thousands) 533,628 418,665 308,813 241,541 194,324 261,596 222,496
Average revenue per mile $ 1.19 $ 1.18 $ 1.15 $ 1.16 $ 1.16 $ 1.15 $ 1.14
Tractors at end of period (6) 4,734 4,425 2,839 2,839 2,214 2,246 1,975
Trailers at end of period 11,718 10,413 5,875 5,875 5,331 5,520 4,396
Average revenue per tractor,
per week $ 2,633 $ 2,661 $ 2,656 $ 2,734 $ 2,794 $ 2,761 $ 2,646
Total loads 578,572 464,586 308,063 239,730 187,986 254,214 185,565
Average tractors during period(6) 4,651 3,572 2,537 2,615 2,091 2,111 1,848
Tractor miles (in thousands) 587,917 459,643 333,411 265,102 209,935 282,985 239,599

BALANCE SHEET DATA
Working capital $ 87,836 $ 98,306 $ 44,813 $ 44,813 $ 23,097 $ 33,829 $ 19,606
Total assets 409,037 426,539 233,777 233,777 183,479 178,084 177,821
Long-term debt,
net of current maturities 181,256 202,450 52,120 52,120 65,509 59,318 61,789
Stockholders' equity(3) 161,527 153,667 128,493 128,493 60,990 63,162 55,086
</TABLE>

(1) Data for U.S. Xpress includes data for all truckload operations, including
the following from their date of acquisition: Hall Systems, Inc. in October
1995; JTI, Inc. in April 1997; Victory Express, Inc. in January 1998; and
PST Vans, Inc. in August 1998. Data for CSI/Crown includes from their date
of acquisition CSI/Reeves, Inc. in August 1995 and the floorcovering assets
of Rosedale Transport, Inc. in April 1997.
(2) Average revenue per mile and average revenue per tractor per week are net
of fuel surcharges. Tractor and trailer data includes owned, leased
equipment, and owner operators.
(3) Reflects the sale by the Company of 2,885,000 shares of Class A Common
Stock in the 1997 transition period. Reflects in fiscal 1999 and 1998, the
issuance of 41,901 and 994,447 shares in connection with the purchase of
PST. Reflects, in fiscal 1999 and 1998, the repurchase of 485,000 and
1,134, 289 shares of Class A Common Stock.
(4) Effective December 31, 1997, the Company changed its fiscal year-end to
December 31 from March 31. As a result, the transition period ended
December 31, 1997 is a nine-month period.
(5) The twelve months ended December 31, 1997 and nine months ended December
31, 1996 unaudited information is provided for the purpose of comparison to
the years ended December 31, 1999 and 1998 and the nine months ended
December 31, 1997.
(6) U.S. Xpress owned, leased and owner-operator tractors.

14
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the components of the
consolidated statements of operations expressed as a percentage of operating
revenue:

<TABLE>
<CAPTION>
12 MONTHS ENDED
DECEMBER 31,
----------------------------------------
1999 1998 1997(UNAUDITED)
----------------------------------------
<S> <C> <C> <C>
OPERATING REVENUE 100.0% 100.0% 100.0%
--------------------------------------
OPERATING EXPENSES:
Salaries, wages and benefits 38.8 40.2 40.9
Fuel and fuel taxes 14.2 13.3 15.9
Vehicle rents 7.7 5.6 6.5
Depreciation and amortization, net of gain/loss 4.1 4.5 2.7
Purchased transportation 11.8 10.5 7.9
Operating expense and supplies 6.3 6.4 6.5
Insurance premiums and claims 4.0 3.6 3.1
Operating taxes and licenses 2.1 1.7 1.6
Communications and utilities 1.7 1.5 1.7
General and other operating 4.6 5.1 6.0
Non-recurring charge - litigation settlement .2 - -
------------------------------------
Total operating expenses 95.5 92.4 92.8
------------------------------------
INCOME FROM OPERATIONS 4.5 7.6 7.2

Interest Expense, net 1.8 1.6 1.3
------------------------------------
Income before income taxes 2.7 6.0 5.9

Income Taxes 1.1 2.4 2.4
------------------------------------
NET INCOME 1.6% 3.6% 3.5%
=====================================
</TABLE>

15
<PAGE>

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 TO THE
YEAR ENDED DECEMBER 31, 1998

OPERATING REVENUE in 1999 increased $126.8 million, or 21.8%, to $708.2 million,
compared to $581.4 million in 1998. U.S. Xpress revenue increased $143.6 million
due primarily to a 27.5% increase in revenue miles and increase in average
revenue per loaded mile to $1.193, versus $1.177 in 1998, due principally to per
mile rate increases. Weighted average tractors increased to 4,651 during 1999,
compared to 3,572 during 1998, due in part to the acquisition of PST Vans in
August 1998. CSI/Crown revenues decreased $16.8 million or 22.6% resulting from
a program to eliminate unprofitable operations, including the closure of certain
under-performing facilities.

OPERATING EXPENSES represented 95.5% of operating revenue for 1999, compared to
92.4% during 1998.

SALARIES, WAGES AND EMPLOYEE BENEFITS as a percentage of revenue were 38.8%
during 1999, compared to 40.2% during 1998. The decrease was primarily
attributable to an increase in the average number of owner-operators to 487 in
1999, compared to 152 in 1998. All owner-operator expenses are reflected as
purchased transportation. CSI/Crown salaries, wages and benefits decreased 23.3%
during 1999, compared to 1998 due to facility closures described above and
efficiencies gained through a new bar-coding process.

FUEL AND FUEL TAXES as a percentage of operating revenue were 14.2% during 1999,
compared to 13.3% during 1998. This increase was primarily due to a 9.1%
increase in the average fuel cost per mile, the effect of which was offset by
the increased use of owner-operators who are responsible for their fuel expense.
The Company's exposure to increases in fuel prices is partially mitigated by
fuel surcharges to its customers and, on a limited basis, by fuel purchase
contracts.

VEHICLE RENTS as a percentage of operating revenue were 7.7% during 1999,
compared to 5.6% during 1998. The increase resulted from increased operating
leases for tractors to 3,041 and trailers to 5,426 at December 31, 1999,
compared to 1,809 leased tractors and 2,383 leased trailers at December 31,
1998. Depreciation and amortization as a percentage of operating revenue was
4.1% for 1999, compared to 4.5% during 1998. The Company includes gains and
losses from the sale of revenue equipment in depreciation expense. Net gains
from the sale of revenue equipment for 1999 were $0.8 million compared to a loss
of $.2 million in 1998. Overall, as a percentage of operating revenue, vehicle
rents and depreciation were 11.8% during 1999, compared to 10.1% in 1998.
Increasing the ratio of leased to owned revenue equipment effectively shifts
financing expenses from interest to "above the line" operating expenses.

PURCHASED TRANSPORTATION as a percentage of operating revenue was 11.8% during
1999, compared to 10.5% in 1998. This increase was primarily due to an increase
in the average owner-operator fleet to 487 for 1999 compared to 152 in 1998.
Owner-operators provide a tractor and driver incurring substantially all of
their operating expenses in exchange for a fixed payment per mile, which is
included in purchased transportation. Owner-operator miles increased from 26.2
million miles during 1998 to 66.9 million miles in 1999. The effect of the
increase in owner-operators was offset by a $7.8 million decrease in purchased
transportation related to the decrease in revenue and related purchased
transportation by CSI/Crown.

INSURANCE PREMIUMS & CLAIMS as a percentage of operating revenue was 4.0% during
1999, compared to 3.6% in 1998. The increase results from an increase effective
January 1, 1999 in cargo insurance cost and increases experienced in physical
damage and liability insurance cost related principally to the average cost and
frequency of claims below the deductible amounts for liability and for physical
damage per each occurrence.

GENERAL AND OTHER OPERATING EXPENSES as a percentage of operating revenue were
4.6% during 1999, compared to 5.1% in 1998. This decrease was primarily due to
the 21.8% increase in revenue, while many expenses included in general and other
operating expenses are relatively fixed.

NON-RECURRING CHARGE - LITIGATION SETTLEMENT was $1.3 million during 1999, as a
result of the settlement of litigation with a professional employer organization
that formerly administered the Company's payroll and benefits systems.

16
<PAGE>

INCOME FROM OPERATIONS for 1999 decreased $12.9 million, or 29.0%, to $31.5
million from $44.4 million in 1998. As a percentage of operating revenue, income
from operations was 4.5% for 1999, and 7.6% in 1998.

INTEREST EXPENSE during 1999 increased $2.5 million, or 25.0%, to $12.4 million,
compared to $9.9 million during 1998. The increase was primarily due to the
increase in outstanding debt to finance the 1998 acquisitions of Victory Express
and PST Vans.

THE COMPANY'S EFFECTIVE TAX RATE increased to 41% in 1999 compared to 40% for
1998, due primarily to the increased amount of non-deductible goodwill
amortization resulting from the 1998 acquisitions of Victory Express and PST
Vans.

17
<PAGE>

COMPARISON OF THE TWELVE MONTHS ENDED DECEMBER 31, 1998 TO THE
TWELVE MONTHS ENDED DECEMBER 31, 1997

OPERATING REVENUE during the fiscal year ended December 31, 1998 increased
$147.6 million, or 34.0%, to $581.4 million, compared to $433.8 million during
the same period in 1997. The revenue increase was primarily generated by a 44.2%
increase in weighted average tractors to 3,572 in 1998, compared to 2,537 in
1997, due in part to the acquisitions of Victory Express in January 1998 and PST
Vans in August 1998. The Company's average revenue per loaded mile increased
2.1% to $1.177 in 1998, versus $1.153 in 1997, due principally to per mile rate
increases negotiated by the Company.

OPERATING EXPENSES represented 92.4% of operating revenue for the year ended
December 31, 1998, compared to 92.8% during the same period in 1997.

SALARIES, WAGES AND EMPLOYEE BENEFITS as a percentage of revenue were 40.2%
during the year ended December 31, 1998, compared to 40.9% during the same
period in 1997. The decrease was primarily attributable to the significant
increase in the number of owner-operators to 450 at December 31, 1998 from 130
at December 31, 1997. The acquisition of PST Vans on August 28, 1998 added 277
owner-operators at the time of acquisition. All owner-operator expenses and
purchased linehaul services are reflected as purchased transportation.

FUEL AND FUEL TAXES as a percentage of operating revenue were 13.3% during the
year ended December 31, 1998, compared to 15.9% during the same period in 1997.
This decrease was primarily attributable to a 16.0% decrease in average price
per gallon, as well as the increased use of owner-operators who pay for their
fuel purchases. The Company's exposure to increases in fuel prices is managed by
fuel surcharges to its customers and, on a limited basis, by fuel purchase
contracts.

VEHICLE RENTS as a percentage of operating revenue were 5.6% during the year
ended December 31, 1998, compared to 6.5% during the same period in 1997.
Depreciation and amortization as a percentage of operating revenue was 4.5% for
the year ended December 31, 1998, compared to 2.7% during the same period in
1997. The Company includes gains and losses from the sale of revenue equipment
in depreciation expense. Net losses from the sale of revenue equipment for the
year ended December 31, 1998 were $0.2 million compared to gains of $2.0 million
during the same period in 1997. Overall, as a percentage of operating revenue,
vehicle rents and depreciation were 10.1% during the year ended December 31,
1998, compared to 9.2% during the same period of 1997. The overall increase in
expense was due primarily to the reduction in gains experienced in 1998 as
compared to 1997, as stated above.

PURCHASED TRANSPORTATION as a percentage of operating revenue was 10.5% during
the year ended December 31, 1998, compared to 7.9% during the same period in
1997. This increase is primarily due to the significant increase in the use of
owner-operators in 1998. Owner-operators provide a tractor and driver and cover
substantially all of their operating expenses in exchange for a fixed payment
per mile, which is included in purchased transportation. Additionally, logistics
revenue increased 57.0% to $21.5 million during the year ended December 31, 1998
from $13.7 million during the same period 1997. Logistics revenue is serviced
primarily by purchasing transportation from outside agents.

GENERAL AND OTHER OPERATING EXPENSES as a percentage of operating revenue were
5.1% during the year ended December 31, 1998, compared to 6.0% during the same
period in 1997. This decrease was primarily due to the 34.0% increase in revenue
and that most items associated with general and other operating expenses are
relatively fixed. Additionally, the Company eliminated some terminals during the
second and third quarters in 1997, which reduced building rent and overhead
expenses in 1998.

INCOME FROM OPERATIONS for the year ended December 31, 1998 increased $13.3
million, or 42.6%, to $44.4 million from $31.1 million during the same period in
1997. As a percentage of operating revenue, income from operations was 7.6% for
the twelve months ended December 31, 1998, compared to 7.2% during the same
period in 1997.

INTEREST EXPENSE increased $4.3 million, or 78.5%, to $9.9 million, compared to
$5.6 million in 1997. The increase results principally from the increase in long
term debt to finance the 1998 acquisitions of Victory Express and PST Vans.

THE COMPANY'S EFFECTIVE TAX RATE remained constant at 40% in 1998 and 1997.

18
<PAGE>

SPECIAL CONSIDERATIONS
The trucking industry is affected by economic risks and uncertainties, some of
which are beyond its control. These include economic recessions and downturns in
customers' business cycles, increases in fuel prices, the availability of
qualified drivers and fluctuations in interest rates.

The trucking industry is highly competitive and includes numerous regional,
inter-regional and national truckload carriers. Some of these carriers have
greater financial resources, equipment and freight capacity than the Company.
Management believes its strategies of controlled growth and focused marketing
will continue to provide freight at sufficient volumes and prices to remain
profitable. Changes in economic conditions could reduce both the amount of
freight available and freight rates, which could have a material adverse effect
on the Company's results.

Fuel is one of the Company's largest expenditures. Shortages of fuel or
increases in fuel prices could have a materially adverse effect on the
operations and profitability of the Company. Many of the Company's customer
contracts contain fuel surcharge provisions to mitigate increases in the cost of
fuel ($2.1 million for the year ended December 31, 1999 compared to $0 for the
same period in 1998). However, there is no assurance that such fuel surcharges
could be used to offset future increases in fuel prices. Additionally, at times,
fuel purchase contracts are used to mitigate the effects of increases in the
prices of fuel. During the later part of 1999, fuel prices steadily increased,
and they remain at significantly higher levels than 1998 and the first half of
1999. These increased fuel costs will have an impact on the fiscal 2000
operations to the extent that they are not offset by higher rates, surcharges
and effective fuel purchase contracts.

Competition for available qualified drivers in the truckload industry is
intense, and will likely remain so for the foreseeable future. The Company and
many of its competitors experience high rates of turnover and occasionally have
difficulty in attracting and retaining qualified drivers in sufficient numbers
to operate all available equipment. Management believes the Company's current
pay structure, benefits, policies and procedures related to drivers are
effective in attracting and retaining drivers. However, there can be no
assurance that it will not be affected by a shortage of qualified drivers in the
future. The inability to attract and retain qualified drivers would have a
material adverse effect on the Company's results.

The trucking industry is extremely capital intensive. The Company depends on
operating leases, lines of credit, secured equipment financing and cash flows
from operations to finance the expansion and maintenance of its modern and cost
efficient revenue equipment and facilities. At present, the Company is more
highly leveraged than some of its competitors. If the Company were unable in the
future to obtain financing at acceptable levels, it could be forced to limit the
growth or replacement of its equipment and facilities. If interest rates
increased significantly, it could have a material adverse effect on the
Company's results.

LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity and capital resources during 1999
were funds provided by operations, borrowings under lines of credit, proceeds
from sales of used revenue equipment, and the use of long-term operating leases
for revenue equipment acquisitions. On December 31, 1999, the Company had in
place a $225.0 million credit facility with a group of banks with a weighted
average interest rate of 7.29%, of which $39.1 million was available for
borrowing. The loan matures January 15, 2002. Interest on outstanding borrowings
is based upon the London Interbank Offered Rate plus applicable margins, as
defined in the credit agreement. The note is collateralized by certain property
and equipment of the Company. The Company also had a $10.0 million credit
facility at December 31, 1999, all of which was available for borrowing. In
2000, the Company's primary sources of liquidity are expected to be funds
provided by operations, borrowings under lines of credit, proceeds from sale of
used revenue equipment and long-term operating lease financing for the
acquisition of revenue equipment.

Cash generated from operations increased to $35.4 million in 1999 from $29.9
million in 1998. Net cash used in investment activities was $15.6 million in
1999 and $99.0 million in 1998. In 1999, $74.6 million was used to acquire
additional property and equipment, compared to $96.8 million for 1998.
Additionally, the use of cash in investment activities in 1998 included $62.6
million related principally to the acquisition of Victory Express and PST Vans.
Proceeds from the sale of property and equipment were $60.8 million in 1999,
compared to $60.5 million in 1998.

19
<PAGE>

In 1998, the Company financed the acquisitions of Victory Express and PST Vans
and repaid a substantial portion of its long-term debt with proceeds from the
$225.0 million revolving line of credit established in 1998. In 1999, the
Company used cash to purchase 485,000 shares of Class A Common Stock.

On February 24, 2000, the Company's Board of Directors authorized the repurchase
of up to $10 million of its outstanding Class A Common Stock. The repurchases
are authorized to be made from time to time in open-market and/or negotiated
transactions through December 31, 2000, as market conditions warrant.

Management believes that funds provided by operations, borrowings under lines of
credit and long-term operating lease financing will be sufficient to fund its
cash needs and anticipated capital expenditures through at least the next twelve
months.

INFLATION
Inflation has not had a material effect on the Company's results of operations
or financial condition during the past three years. However, inflation higher
than experienced during the past three years could have an adverse effect on the
Company's future results.

SEASONALITY
In the trucking industry, shipments generally show a seasonal pattern as
customers increase shipments prior to and reduce shipments during and after the
winter holiday season. Additionally, shipments can be adversely impacted by
winter weather conditions.

RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities". The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized currently in
earnings, unless specific hedge accounting criteria are met. Special accounting
for qualifying hedges allows a derivative's gains and losses to offset related
results on the hedged item in the income statement, and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting.

As amended by SFAS No. 137, Statement 133 is effective for fiscal years
beginning after June 15, 2000. A company may also implement the Statement as of
the beginning of any fiscal quarter after issuance. Statement 133 cannot be
applied retroactively. Statement 133 must be applied to (a) derivative
instruments and (b) certain derivative instruments embedded in hybrid contracts
that were issued, acquired or substantively modified after December 31, 1997
(and, at the Company's election, before January 1, 1998).

The Statement could increase the volatility in earnings and other comprehensive
income, however, based on the Company's current and anticipated level of
derivative instruments and hedging activities, the Company does not believe the
impact would be material.

20
<PAGE>

RECENT EVENTS
On March 14, 2000 the Company signed a Letter of Intent with five other large
nationwide transportation companies - Covenant Transport, Inc.; J.B. Hunt
Transport Services, Inc.; M.S. Carriers, Inc.; Swift Transportation Co., Inc,;
and Werner Enterprises, Inc. - pursuant to which the parties agreed to merge
their logistics business units into a commonly-owned, Internet based
transportation logistics company, to be named Transplace.com. Subject to
negotiation of definitive agreements, regulatory filings and approvals and other
customary conditions, the parties agreed to merge their respective logistics
businesses into the newly-formed logistics company. As planned, the Company
would hold a 13% interest in the newly-formed logistics company. The other
owners would have the following equity interests: Covenant, 13%; J.B. Hunt, 28%;
M.S. Carriers, 14%; Swift, 16%; and Werner, 16%. Transplace.com's initial
service will focus on truckload, refrigerated and intermodal deliveries.
Although there can be no certainty as to the level of business to be achieved by
the new entity, the logistics businesses that would be contributed to it
experienced aggregated revenues of $650 million in 1999.

21
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To U.S. Xpress Enterprises, Inc.:

We have audited the accompanying consolidated balance sheets of U.S. Xpress
Enterprises, Inc. (a Nevada corporation) and subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of operations,
stockholders' equity and cash flows for the periods ended December 31, 1999,
1998 and 1997. 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 financial position of U.S. Xpress Enterprises, Inc.
and subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for the periods ended December 31, 1999, 1998
and 1997 in conformity with accounting principles generally accepted in the
United States.

/s/ ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
February 1, 2000

22
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

YEAR ENDED NINE
DECEMBER 31, MONTHS ENDED
----------------------------- DECEMBER 31,
1999 1998 1997
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUE $ 708,212 $ 581,401 $ 342,272

OPERATING EXPENSES:
Salaries, wages and benefits 275,070 233,953 138,582
Fuel and fuel taxes 100,295 77,046 52,438
Vehicle rents 54,522 32,399 21,912
Depreciation and amortization, net of gain/loss on
disposition of equipment 29,250 26,007 8,806
Purchased transportation 83,897 60,773 29,205
Operating expenses and supplies 44,629 37,575 22,459
Insurance premiums and claims 28,431 20,159 11,425
Operating taxes and licenses 14,709 9,830 5,228
Communications and utilities 12,174 9,002 5,683
General and other operating expenses 32,458 30,252 20,383
Non-recurring charge - litigation settlement 1,250 - -
----------------------------------------------
Total operating expenses 676,685 536,996 316,121
----------------------------------------------
INCOME FROM OPERATIONS 31,527 44,405 26,151

Interest Expense, net 12,388 9,908 4,168
----------------------------------------------
Income Before Income Tax Provision 19,139 34,497 21,983
Income Tax Provision 7,758 13,780 8,792
----------------------------------------------
NET INCOME $ 11,381 $ 20,717 $ 13,191
==============================================
EARNINGS PER SHARE - BASIC $ .77 $ 1.38 $ .98
==============================================
Weighted average shares - basic 14,785 15,038 13,467
==============================================
EARNINGS PER SHARE - DILUTED $ .77 $ 1.37 $ .97
==============================================
Weighted average shares - diluted 14,852 15,162 13,582
==============================================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED STATEMENTS.

23
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share amounts)
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------
1999 1998
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 259 $ 6,613
Customer receivables, net of allowance of $3,255 and $3,751 101,870 94,814
Other receivables 9,807 22,327
Operating and installation supplies 6,078 5,214
Deferred income taxes 2,148 4,223
Other current assets 4,170 4,723
----------- ----------
Total current assets 124,332 137,914
----------- ----------
PROPERTY AND EQUIPMENT, AT COST 275,880 269,148
Less accumulated depreciation and amortization (69,547) (52,221)
----------- -----------
Net property and equipment 206,333 216,927
----------- -----------
OTHER ASSETS
Goodwill, net 70,161 64,806
Other 8,211 6,892
----------- -----------
Total other assets 78,372 71,698
----------- -----------
TOTAL ASSETS $ 409,037 $ 426,539
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 17,442 $ 17,090
Accrued wages and benefits 7,268 6,573
Claims and insurance accruals 5,530 8,382
Other accrued liabilities 5,074 6,694
Current maturities of long-term debt 1,182 869
----------- -----------
Total current liabilities 36,496 39,608
----------- -----------
LONG-TERM DEBT, NET OF CURRENT MATURITIES 181,256 202,450
----------- -----------
DEFERRED INCOME TAXES 26,526 28,820
----------- -----------
OTHER LONG-TERM LIABILITIES 3,232 1,994
----------- -----------
COMMITMENTS AND CONTINGENCIES (NOTES 7 AND 9)
STOCKHOLDERS' EQUITY
Preferred Stock, $.01 par value, 2,000,000 shares authorized, no shares
issued -- --
Common Stock Class A, $.01 par value, 30,000,000 shares authorized,
13,087,545 and 13,017,867 shares issued and outstanding at December 31,
1999 and 1998, respectively 131 130
Common Stock Class B, $.01 par value, 7,500,000 shares authorized, 3,040,262
shares issued and outstanding 30 30
Additional paid-in capital 104,259 103,255
Retained earnings 74,732 63,351
Treasury Stock, Class A, at cost (1,619,289 and 1,134,289 shares at
December 31, 1999 and 1998, respectively) (17,392) (12,866)
Notes receivable from stockholders (233) (233)
----------- -----------
Total stockholders' equity 161,527 153,667
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 409,037 $ 426,539
=========== ===========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED BALANCE
SHEETS.

24
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

YEAR ENDED NINE
DECEMBER 31, MONTHS ENDED
------------------------------ DECEMBER 31,
1999 1998 1997
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 11,381 $ 20,717 $ 13,191
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income tax provision 1,181 8,882 4,160
Depreciation and amortization 30,014 25,770 10,522
(Gain)/loss on sales of equipment (764) 237 (1,716)
Changes in operating assets and liabilities, net of acquisitions:
Receivables 4,113 (8,889) (5,590)
Operating and installation supplies (616) (260) 729
Other assets (4,004) (8,136) 1,690
Accounts payable and other accrued liabilities (6,538) (7,550) (4,867)
Accrued wages and benefits 606 (906) (804)
Other 56 47 22
------------------------------------------------------
Net cash provided by operating activities 35,429 29,912 17,337
------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchases of property and equipment (74,622) (96,822) (58,653)
Proceeds from sales of property and equipment 60,773 60,461 16,359
Acquisition of businesses, net of cash acquired (1,798) (62,626) (4,990)
------------------------------------------------------
Net cash used in investing activities (15,647) (98,987) (47,284)
-------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) under lines of credit (21,000) 169,500 (3,000)
Payments of long-term debt (852) (84,174) (44,159)
Borrowings under long-term debt -- -- 22,819
Proceeds from exercise of stock options -- 91 213
Proceeds from issuance of common stock, net 242 403 51,716
Purchase of Class A Common Stock (4,526) (12,866) --
------------------------------------------------------
Net cash provided by (used in) financing activities (26,136) 72,954 27,589
------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (6,354) 3,879 (2,358)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 6,613 2,734 5,092
------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 259 $ 6,613 $ 2,734
======================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 12,838 $ 10,062 $ 4,842
======================================================
Cash paid during the period for income taxes, net $ 6,967 $ 2,600 $ 2,100
======================================================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED STATEMENTS.

25
<PAGE>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollars in thousands)
<TABLE>
<CAPTION>
NOTES
COMMON STOCK ADDITIONAL RECEIVABLE
------------------ PAID-IN RETAINED TREASURY FROM
CLASS A CLASS B CAPITAL EARNINGS STOCK STOCKHOLDERS TOTAL
------- ------- ------- -------- ----- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, MARCH 31, 1997 $ 90 $ 30 $ 33,832 $ 29,443 $ -- $ (233) $ 63,162

Net income -- -- -- 13,191 -- -- 13,191
Issuance of 1,210 shares of Class A Common
Stock for non-employee director compensation -- -- 22 -- -- -- 22
Proceeds from exercise of 36,832 stock options -- -- 213 -- -- -- 213
Issuance of 10,000 shares of Class A Common
Stock to officer 1 -- 188 -- -- -- 189
Issuance of 2,885,000 shares of Class A Common
Stock 29 -- 51,687 -- -- -- 51,716
--------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 120 30 85,942 42,634 -- (233) 128,493

Net income -- -- -- 20,717 -- -- 20,717
Issuance of 2,661 shares of Class A Common
Stock for non-employee director compensation -- -- 47 -- -- -- 47
Proceeds from exercise of 15,167 stock options -- -- 91 -- -- -- 91
Issuance of 26,008 shares of Class A Common
Stock for employee stock purchase plan -- -- 403 -- -- -- 403
Issuance of 994,447 shares of Class A Common
Stock for PST acquisition 10 -- 16,772 -- -- -- 16,782
Repurchase of 1,134,289 shares of Class A
Common Stock -- -- -- -- (12,866) -- (12,866)
--------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 130 30 103,255 63,351 (12,866) (233) 153,667

Net income -- -- -- 11,381 -- -- 11,381
Issuance of 5,068 shares of Class A Common
Stock for non-employee director compensation -- -- 56 -- -- -- 56
Issuance of 22,709 shares of Class A Common
Stock for employee stock purchase plan -- -- 242 -- -- -- 242
Issuance of 41,901 shares of Class A Common
Stock for PST acquisition 1 -- 706 -- -- -- 707
Repurchase of 485,000 shares of Class A
Common Stock -- -- -- -- (4,526) -- (4,526)
--------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1999 $ 131 $ 30 $ 104,259 $ 74,732 $ (17,392) $ (233) $161,527
================================================================================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED STATEMENTS.

26
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)

Effective December 31, 1997, the Company changed its fiscal year-end from March
31 to December 31. Therefore, for purposes of these financial statements and
notes, "fiscal 1999" and "fiscal 1998" refer to the fiscal years ended December
31, 1999 and 1998, and "1997 transition period" relates to the nine-month period
ended December 31, 1997.

1. ORGANIZATION AND OPERATIONS

U.S. Xpress Enterprises, Inc. (the "Company") provides transportation and
logistics services through two business segments. U.S. Xpress, Inc. ("U.S.
Xpress") is a truckload carrier serving the continental United States and parts
of Canada and Mexico. CSI/Crown, Inc. ("CSI/Crown") provides transportation and
logistics services to the floorcovering industry.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany transactions and accounts have
been eliminated.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS
Cash and cash equivalents include all highly liquid investment instruments with
an original maturity of three months or less.

RECOGNITION OF REVENUE
For financial reporting purposes, the Company generally recognizes revenue and
direct costs when shipments are completed.

CONCENTRATION OF CREDIT RISK
Concentrations of credit risk with respect to customer receivables are limited
due to the large number of entities comprising the Company's customer base and
their dispersion across many different industries. The Company performs ongoing
credit evaluations and generally does not require collateral.

OPERATING AND INSTALLATION SUPPLIES
Operating supplies consist primarily of tires, parts, materials and supplies for
servicing the Company's revenue and service equipment. Installation supplies
consist of various accessories used in the installation of floorcoverings and
are held for sale at various CSI/Crown distribution centers. Operating and
installation supplies are recorded at the lower of cost (on a first-in,
first-out basis) or market. Tires and tubes purchased as part of revenue and
service equipment are capitalized as part of the cost of the equipment.
Replacement tires and tubes are charged to expense when placed in service.

PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Depreciation and amortization of
property and equipment are computed using the straight-line method for financial
reporting purposes and accelerated methods for tax purposes over the estimated
useful lives of the related assets (net of salvage value). The cost and lives
are as follows:

27
<PAGE>
Cost
------------------------
Lives 1999 1998
----------- ---------- ----------
Land and buildings 10-30 years $ 10,377 $ 9,771
Revenue and service equipment 3-7 years 223,991 229,377
Furniture and equipment 3-7 years 19,169 14,864
Leasehold improvements 5-6 years 22,343 15,136
---------- ---------
$275,880 $269,148
========== =========

The Company recognized $27,101, $24,097 and $9,895 in depreciation expense in
fiscal 1999, 1998 and the 1997 transition period, respectively. Gains (losses)
on sales of equipment of $764, $(237) and $1,716 for fiscal 1999, 1998 and the
1997 transition period, respectively, are included in depreciation expense on
the consolidated statements of operations.

Upon the retirement of property and equipment, the related asset cost and
accumulated depreciation are removed from the accounts and any gain or loss is
reflected in the Company's statement of operations with the exception of gains
on trade-ins, which are included in the basis of the new asset. Expenditures for
normal maintenance and repairs are expensed. Renewals or betterments that affect
the nature of an asset or increase its useful life are capitalized.

GOODWILL
The excess of the consideration paid by the Company over the estimated fair
value of identifiable net assets acquired has been recorded as goodwill and is
being amortized on the straight-line basis over periods ranging from 20 to 40
years. The Company continually evaluates whether subsequent events and
circumstances have occurred that indicate the remaining estimated useful life of
goodwill might warrant revision or that the remaining balance may not be
recoverable. When factors indicate that goodwill should be evaluated for
possible impairment, the Company uses an estimate of the future undiscounted net
cash flows of the related businesses over the remaining life of the goodwill in
measuring whether goodwill is recoverable. The Company recognized $1,977, $1,244
and $323 of goodwill amortization expense in fiscal 1999, fiscal 1998 and the
1997 transition period, respectively. Accumulated amortization was $4,572 and
$2,595 at December 31, 1999 and 1998, respectively.

CLAIMS AND INSURANCE ACCRUALS
Claims and insurance accruals consist of cargo loss, damage and liability
(personal injury and property damage) in excess of established deductible levels
and group health claims. Claims in excess of deductible levels are covered by
insurance in amounts which the Company considers adequate. Although the Company
utilized insurance policies with large self-insurance levels prior to 1997,
current deductible levels range from $3 for liability, $50 for cargo loss and $5
after an aggregate annual deductible of $2,500 for physical damage. Claims
accruals represent the uninsured portion of pending claims at December 31, 1999
and 1998, plus an estimated liability for incurred but not reported claims.
Accruals for cargo loss, damage and liability claims are estimated based on the
Company's evaluation of the type and severity of individual claims. Accruals for
group health insurance claims are based on the Company's estimate of outstanding
claims determined by the Company's past claims experience.

OTHER LONG-TERM LIABILITIES
Periodically, the Company receives volume rebates from vendors related to
certain operating leases for new revenue and service equipment. Additionally,
certain equipment leases include spare tires, which increase tire inventories.
The Company defers recognition of these rebates and amortizes such amounts as a
reduction of vehicle rent expense over the respective lease terms. At December
31, 1999 and 1998, other long-term liabilities include deferred rents of $2,814
and $1,752, respectively.

DERIVATIVE FINANCIAL INSTRUMENTS
The Company has only limited involvement with derivative financial instruments
and does not use them for trading purposes. Interest rate swap agreements, which
are used by the Company to manage its interest rate exposure, are accounted for
on the accrual basis. Amounts to be paid or received under interest rate swap
agreements are recorded in interest expense in the period in which they accrue.

28
<PAGE>

EARNINGS PER SHARE
The difference between basic and diluted EPS is due to the assumed conversion of
dilutive outstanding options resulting in approximately 67,000, 124,000 and
115,000 equivalent shares in fiscal 1999, fiscal 1998 and the 1997 transition
period respectively.

STOCK-BASED COMPENSATION
The Company accounts for its stock-based compensation plans under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB No. 25"). Effective fiscal 1997, the Company adopted the disclosure option
of Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation."

RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". The Statement
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or liability
measured at its fair value. The Statement requires that changes in the
derivative's fair value be recognized currently in earnings, unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company must formally
document, designate and assess the effectiveness of transactions that receive
hedge accounting.

RECLASSIFICATIONS
Certain reclassifications have been made in the 1997 transition period and in
the fiscal 1998 financial statements to conform to the 1999 presentation.

3. ACQUISITIONS

All acquisitions have been accounted for under the purchase method of
accounting. The results of operations of the acquired businesses are included in
the financial statements from the dates of acquisition. Under the terms of the
purchase agreements for acquisitions prior to 1999 and in settlement of certain
contingent purchase price arrangements, the Company incurred approximately
$4,000 of additional consideration in 1999, of which approximately $1,800 was
paid in cash.

Effective January 29, 1998, the Company acquired Victory Express, Inc.
("Victory"), a non-union truckload carrier based in Medway, Ohio, for $51,000 in
cash and assumption of approximately $2,000 in debt.

Effective August 28, 1998, the Company acquired all of the outstanding shares of
PST Vans, Inc. ("PST"), a non-union truckload carrier based in Salt Lake City,
Utah, for $12,281 in cash, 1,036,348 shares of U.S. Xpress Common Stock, and the
assumption of $52,000 in debt.

The pro forma financial information below is based on the historical financial
statements of U.S. Xpress Enterprises, PST Vans, and Victory Express and
adjusted as if the acquisitions had occurred as of the beginning of the periods
presented, with certain assumptions made that management believes to be
reasonable.

29
<PAGE>
FISCAL 1997
1998 TRANSITION PERIOD
---------------------------------------
(Unaudited)
Operating Revenue $ 679,596 $ 504,511
Net Income 17,568 7,850
Basic Earnings Per Share 1.11 0.54
Diluted Earnings Per Share 1.11 0.54

This information is for comparative purposes only and does not purport to be
indicative of the results of operations that would have occurred had the
transactions been completed at the beginning of the respective periods or
indicative of the results that may occur in the future.

4. INCOME TAXES

The income tax provision for fiscal 1999, fiscal 1998, and the 1997 transition
period consisted of the following:

Fiscal Fiscal 1997
1999 1998 Transition Period
--------------------------------------------------------
Current:
Federal $ 5,979 $ 4,171 $ 3,854
State 598 727 778
---------------------------------------------------------
6,577 4,898 4,632
Deferred 1,181 8,882 4,160
--------------------------------------------------------
$ 7,758 $ 13,780 $ 8,792
========================================================

A reconciliation of the income tax provision as reported in the consolidated
statements of operations to the amounts computed by applying federal statutory
rates is as follows:

<TABLE>
<CAPTION>
Fiscal Fiscal 1997
1999 1998 Transition Period
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal income tax at statutory rate $ 6,699 $ 12,074 $ 7,694
State income taxes, net of federal income tax benefit 395 1,366 513
Nondeductible goodwill amortization 548 349 58
Nondeductible driver per diems -- -- 193
Other, net 116 (9) 334
----------------------------------------
Income tax provision $ 7,758 $ 13,780 $ 8,792
========================================
</TABLE>

30
<PAGE>

The tax effect of temporary differences that give rise to significant portions
of deferred tax assets and liabilities at December 31, 1999 and 1998 consisted
of the following:

<TABLE>
<CAPTION>
1999 1998
-------------------------------
Deferred tax assets
<S> <C> <C>
Allowance for doubtful accounts $ 601 $ 1,303
Insurance reserves 2,157 3,269
Alternative minimum tax credit carryforwards 2,369 1,115
Claims and other reserves 340 673
Net operating loss carryforwards 6,229 5,100
Other 597 684
-------------------------------
Total deferred tax assets $ 12,293 $ 12,144
================================
Deferred tax liabilities
Book over tax basis of property and equipment $ 34,980 $ 35,233
Deductible goodwill amortization 575 152
Prepaid license fees 468 1,005
Other 648 351
--------------------------------
Total deferred tax liabilities $ 36,671 $ 36,741
================================
</TABLE>

At December 31, 1999, the Company has approximately $19,000 of net operating
loss ("NOL") carryforwards from the PST acquisition, which expire in 2010 and
2011. The utilization of the NOL carryforwards is limited to future net income
generated from PST. Management believes it will be able to utilize the NOL
carryforwards prior to their expiration. The Company also has approximately
$2,000 of alternative minimum tax ("AMT") credit carryforwards. AMT credits may
generally be carried forward indefinitely and used in future years to the extent
the Company's regular tax liability exceeds the AMT liability for such future
years.

5. LONG-TERM DEBT

Long-term debt at December 31, 1999 and 1998 consisted of the following:

<TABLE>
<CAPTION>
1999 1998
-----------------------------
<S> <C> <C>
Obligation under line of credit with a group of banks, weighted average
interest rate of 7.29% at December 31, 1999, maturing January 2002 $ 178,000 $ 199,000

Installment note with bank, interest rate of 8.05% at December 31, 1999,
maturing December 2003 860 1,060

Capital lease obligations maturing through January 2008 1,760 2,284

Other 1,818 975
-----------------------------
182,438 203,319
Less: current maturities of long-term debt (1,182) (869)
-----------------------------
$ 181,256 $ 202,450
=============================
</TABLE>

During 1998, the Company entered into a line of credit with a syndicate of banks
with aggregate capacity up to $225,000. The facility has among its financial
covenants, limitations on the amount of total debt, and thresholds for the
capital adequacy of the Company. A portion of the availability under this line
was immediately used to payoff certain existing long-term indebtedness bearing
higher interest rates. Letters of credit outstanding against the line of credit
were $7,916, and $39,084 was available under the facility at December 31, 1999.

31
<PAGE>

Borrowings (including letters of credit) under the line of credit are limited to
the lesser of: (a) 90% of the book value of eligible revenue equipment plus 85%
of eligible accounts receivable, or (b) $225,000. Borrowings under the line of
credit bear interest, at the option of the Company, equal to either: (i) the
greater of the bank's prime rate or the federal funds rate plus .50%, (ii) the
rate offered in the Eurodollar market for amounts and periods comparable to the
relevant loan plus a margin that is determined by a financial covenant, or (iii)
the rate offered to the Company for a loan of a specific amount and maturity by
any of the participating banks under a competitive bid process. At December 31,
1999, the margin applicable to the Eurodollar interest rate was equal to 1.1%.

The Company also has available a $10,000 revolving line of credit that bears
interest at the Federal Funds rate plus .50% and a margin that is determined by
a financial covenant, and has the same financial covenants as the Company's
$225,000 facility. No amounts were outstanding under this line of credit at
December 31, 1999 and 1998.

The aggregate annual maturities of long-term debt for each of the next five
years are:

2000 $ 1,182
-----------------------
2001 1,118
----------------------
2002 178,364
-----------------------
2003 419
-----------------------
2004 228
-----------------------

6. DERIVATIVE FINANCIAL INSTRUMENTS

Interest rate swap agreements are used to manage well-defined interest rate
risks. Under interest rate swap agreements, the Company agrees with other
parties to exchange, at specified intervals, the difference between fixed rate
and variable rate interest amounts calculated by reference to an agreed-upon
notional amount. Under these agreements, the Company receives interest payments
at rates equal to LIBOR reset quarterly, and pays interest at fixed rates shown
below:

Notional Fixed Rate Variable Rate Effective Expiration
Amounts Component Component Date Date
------- --------- --------- ---- ----

$ 10,000 5.730% 6.133% February 6, 1998 February 6, 2003
15,000 5.705 6.133 February 6, 1998 February 6, 2003
10,000 5.145 6.133 August 6, 1999 February 6, 2003
10,000 5.565 6.120 September 8, 1998 September 8, 2003

The Company is exposed to credit losses in the event of non-performance by the
counterparties to its interest rate swap agreements. The Company anticipates,
however, that the counterparties will be able to fully satisfy their obligations
under the contracts. The Company does not obtain collateral or other security to
support financial instruments subject to credit risk, but monitors the
credit-standing of counterparties.

The fair value of the interest rate swap agreements is defined as the amount the
Company would receive or pay to relinquish itself from further obligations under
the agreements. At December 31, 1999, the Company estimates the amount it would
receive to terminate the agreements approximates $1,351.

7. LEASES

The Company leases certain revenue and service equipment and office and terminal
facilities under long-term non-cancelable operating lease agreements expiring at
various dates through December 2004. Rental expense under non-cancelable
operating leases was approximately $60,335, $37,213 and $21,912 for fiscal 1999,
fiscal 1998 and the 1997 transition period, respectively.

32
<PAGE>

During 1998, the Company entered into a five-year lease of a new corporate
office and operations facility. Payments under the lease are based on LIBOR
rates applied to the cost of the facility funded by the lessor. The Company has
an option to renew the lease for up to three three-year extensions, subject to
certain conditions. If the Company does not purchase the property at the end of
the lease term, whether caused by expiration, default or otherwise, the Company
would guarantee a residual value to the lessor of up to the lessor's net
investment in the property. Under the lease, the Company is required to maintain
compliance with certain financial covenants.

Approximate aggregate minimum future rentals payable under these operating
leases for each of the next five years are:

2000 $ 64,253
-----------------------
2001 54,627
-----------------------
2002 28,775
-----------------------
2003 12,605
-----------------------
2004 6,754
-----------------------

8. RELATED PARTY TRANSACTIONS

The Company leases certain office and terminal facilities from entities owned by
the two principal stockholders of the Company. The lease agreements are for
five-year terms and provide the Company with the option to renew the lease
agreements for four three-year terms. Rent expense of approximately $868, $1,480
and $1,145 was recognized in connection with these leases during fiscal 1999,
fiscal 1998 and the 1997 transition period, respectively.

The two principal stockholders of the Company and certain partnerships
controlled by their families own 100% of the outstanding common stock of Paragon
Leasing LLC ("Paragon"). Paragon leases certain revenue and service equipment to
the Company on a temporary basis. Rent expense of approximately $590, $1,162 and
$1,276 was recognized in connection with these leases during fiscal 1999, fiscal
1998 and the 1997 transition period, respectively.

The two principal stockholders of the Company and certain partnerships
controlled by their families own 45% of the outstanding common stock of
Transcommunications, Inc. ("Transcom"). Beginning in 1999, the Company began
utilizing Transcom charge cards for over-the-road fuel purchases. The Company
paid Transcom $11,572 for these services in 1999. Transcom also makes a debit
card system available to the Company's drivers through which phone calls and
Internet e-mail can be credited while the driver is on the road. Total payments
by the Company to Transcom for these services were approximately $441, $209 and
$112 in fiscal 1999, fiscal 1998 and the 1997 transition period, respectively.

9. COMMITMENTS AND CONTINGENCIES

On May 27, 1999, a settlement agreement and release was completed between the
Company and Employee Solutions, Inc. ("ESI"), pursuant to which the Company's
and ESI's claims were resolved. As a result of the settlement, the Company
recorded a non-recurring charge of $1,250 to operating expense in 1999.

Letters of credit of $8,116 were outstanding at December 31, 1999. The letters
of credit are maintained primarily to support the Company's insurance program
(see Note 2). The Company pays commitment fees of .75% on the outstanding
portion of the letters of credit.

33
<PAGE>

10. EMPLOYEE BENEFIT PLAN

The Company has a 401(k) Retirement Plan covering substantially all employees of
the Company, whereby participants may contribute a percentage of their
compensation, as allowed under applicable laws. The plan provides for a matching
contribution by the Company. Participants are 100% vested in participant
contributions and become vested in employer matching contributions over a period
of four years. The Company recognized $1,425, $1,263 and $604 in expense under
this employee benefit plan for fiscal 1999, fiscal 1998 and the 1997 transition
period, respectively.

11. STOCKHOLDERS' EQUITY

PUBLIC OFFERING
In the 1997 transition period, the Company completed a secondary public offering
through the issuance of 2,885,000 shares of Class A Common Stock. As a result of
this offering, the Company received proceeds, net of underwriting discounts and
commissions and issuance costs, of $51,716. The Company utilized the net
proceeds to acquire certain equipment previously leased under operating leases
and to reduce outstanding debt.

STOCK BUYBACK
During fiscal 1999, as authorized by its Board of Directors, the Company
purchased 485,000 shares of the Company's outstanding Class A Common Stock in
the open market at a cost of $4,526. During fiscal 1998, as authorized by its
Board of Directors, the Company purchased 950,000 shares of the Company's
outstanding Class A Common Stock in the open market. In addition, during fiscal
1998, the Company repurchased 184,289 shares of the Company's Class A Common
Stock in a private transaction with a non-affiliated stockholder. In total,
during fiscal 1998, the Company repurchased 1,134,289 shares in the open market
and private transactions at an aggregate cost of $12,866.

COMMON STOCK
Holders of Class A Common Stock are entitled to one vote per share. Holders of
Class B Common Stock are entitled to two votes per share. Once the Class B
Common Stock is no longer held by the two principal stockholders of the Company,
or their families, as defined, the stock is automatically converted into Class A
Common Stock on a share per share basis.

PREFERRED STOCK
Effective December 31, 1993, the Board of Directors approved the designation of
2,000,000 shares of preferred stock with par value of $.01 per share. The Board
of Directors has the authority to issue these shares and to determine the
rights, terms and conditions of the preferred stock as needed.

NON-EMPLOYEE DIRECTORS STOCK PLAN
In August 1995, the Company adopted the 1995 Non-Employee Directors Stock Award
and Option Plan (the "Directors Stock Plan") providing for the issuance of stock
options to non-employee directors upon their election to the Company's Board of
Directors. The Directors Stock Plan also provides non-employee directors the
option to receive certain board-related compensation in the form of the
Company's Class A Common Stock in lieu of cash. The number of shares of Class A
Common Stock available for option or issue under the Directors Stock Plan may
not exceed 50,000 shares.

The Directors Stock Plan provides for the grant of 1,200 options to purchase the
Company's Class A Common Stock to each non-employee director upon the election
or re-election of each such director to the board. The exercise price of options
issued under the Directors Stock Plan is set at the fair market value of the
Company's stock on the date granted. Options vest ratably on each of the first,
second and third anniversaries of the date of grant.

If a board member elects to receive board-related compensation in the form of
stock, the number of shares issued to each director in lieu of cash is
determined based on the amount of earned compensation divided by the fair market
value of the Company's stock on the date compensation is earned.

34
<PAGE>

EMPLOYEE STOCK PURCHASE PLAN
In August 1997, the Company adopted an Employee Stock Purchase Plan (the "ESPP")
through which employees meeting certain eligibility criteria may purchase shares
of the Company's common stock at a discount. Under the ESPP, eligible employees
may purchase shares of the Company's common stock, subject to certain
limitations, at a 15% discount. Common stock is purchased for employees in
January and July of each year. Employees may not purchase more than 1,250 shares
in any six-month period or purchase stock having a market value of more than
$25,000 per calendar year. The Company has reserved 300,000 shares for issuance
under the ESPP. In January and July 1999, employees purchased 9,752 and 12,957
shares of the Company's Class A Common Stock at $12.75 and $9.09 per share,
respectively. In January and July 1998, employees purchased 17,001 and 9,007
shares of the Company's Class A Common Stock at $16.15 and $14.24 per share,
respectively. At December 31, 1999, 251,283 shares were available for purchase
under the ESPP. In January 2000, employees purchased 30,899 shares of the
Company's Class A Common Stock at $6.27 per share.

STOCK OPTIONS
Stock options generally vest over periods ranging from three to six years and
expire ten years from the date of grant. A summary of the Company's stock option
activity for 1999, 1998 and the 1997 transition period follows:

<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
SHARES OPTION PRICE EXERCISE PRICE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at March 31, 1997 199,342 $ 4.72 - $ 9.50 $ 5.77
Granted at market price 109,900 18.00 - 19.13 18.93
Exercised (37,332) 4.72 - 6.88 5.72
Canceled or expired (667) 6.88 6.88
----------------
Outstanding at December 31, 1997 271,243 4.72 - 19.13 11.10
Granted at market price 108,550 12.25 - 20.88 12.63
Exercised (15,167) 4.72 - 6.88 6.02
Canceled or expired (7,500) 6.88 - 19.13 15.04
----------------
Outstanding at December 31, 1998 357,126 4.72 - 20.88 11.70
Granted at market price 51,300 10.13 - 15.00 13.13
Canceled or expired (14,000) 12.25 - 19.13 14.71
-----------------
Outstanding at December 31, 1999 394,426 4.72 - 20.88 11.78
=================
</TABLE>

ACCOUNTING FOR STOCK-BASED COMPENSATION
For SFAS No. 123 purposes, the fair value of each option grant and each stock
purchase right under the ESPP has been estimated as of the date of grant using
the Black-Scholes pricing model with the following weighted average assumptions
for fiscal 1999, fiscal 1998 and the 1997 transition period, respectively:
risk-free interest rate of 5.26%, 4.52% and 6.06%, expected life of five years,
expected dividend yield of 0% and expected volatility of 60%, 61% and 51%. Using
these assumptions, the fair value of the awards granted in fiscal 1999, fiscal
1998 and the 1997 transition period is $473, $756 and $737, respectively, which
would be amortized as compensation expense over the vesting period. Had
compensation cost for the plan been determined in accordance with SFAS No. 123,
utilizing the assumptions detailed above, the Company's pro forma net income
would have been $11,083, $20,500 and $13,054 for fiscal 1999, fiscal 1998 and
the 1997 transition period, respectively. Pro forma basic earnings per share
would have been $0.75, $1.36 and $.97 for fiscal 1999, fiscal 1998 and the 1997
transition period, respectively. Pro forma diluted earnings per share would have
been $0.75, $1.35 and $.96 for the same periods.

The pro forma effect on net income in this pro forma disclosure may not be
representative of the pro forma effect on net income in future years, because it
does not take into consideration pro forma compensation expense related to
grants made prior to March 31, 1996.

The weighted-average fair value of options granted during fiscal 1999, fiscal
1998 and the 1997 transition period was $7.42, $6.45 and $9.00, respectively. Of
the options outstanding at December 31, 1999, 141,276 have exercise prices
between $4.72 and $6.88, with a weighted average exercise price of $5.67 and a
weighted average contractual life of 5.1 years. All of these options are
exercisable. Options to exercise 118,450 shares have exercise prices between
$9.50 and $12.25, with a weighted average exercise price of $11.88 and a
weighted average remaining contractual life of 8.8 years. Of these options,
26,088 were

35
<PAGE>

exercisable at a weighted average exercise price of $12.00. Options to exercise
the remaining 134,700 shares have exercise prices between $15.00 and $20.88,
with a weighted average exercise price of $18.11 and a weighted average
remaining contractual life of 8.0 years. Of these options, 42,200 were
exercisable at a weighted average exercise price of $18.97. As of December 31,
1998, 128,423 of the options outstanding were exercisable with a weighted
average exercise price of $7.86 per share. As of December 31, 1997, 77,259 of
the options outstanding were exercisable with a weighted average exercise price
of $5.50 per share.

12. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, customer and other
receivables, accounts payable and accrued liabilities are reasonable estimates
of their fair values because of the short maturity of these financial
instruments. Based on the borrowing rates available to the Company for long-term
debt with similar terms and average maturities, the carrying amounts approximate
the fair value of such financial instruments.

13. OPERATING SEGMENTS

The Company has two reportable segments based on the types of services it
provides to its customers: U.S. Xpress, which provides truckload operations and
related logistics services throughout the continental United States and parts of
Canada and Mexico, and CSI/Crown, which provides transportation and logistics
services to the floorcovering industry.

The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. All intersegment sales prices are
market based. The Company evaluates performance based on operating income of the
respective business units.

U.S. Xpress CSI/Crown Consolidated
----------- --------- ------------
1997 Transition Period
Revenues - external customers $ 284,627 $ 57,645 $ 342,272
Intersegment revenues 6,173 0 6,173
Operating income 23,750 2,401 26,151
Depreciation and amortization 9,919 603 10,522
Total assets 215,402 18,375 233,777
Capital expenditures 57,743 910 58,653

Fiscal 1998
Revenues - external customers $ 506,868 $ 74,533 $ 581,401
Intersegment revenues 6,286 0 6,286
Operating income 41,837 2,568 44,405
Depreciation and amortization 24,874 896 25,770
Total assets 406,386 20,153 426,539
Capital expenditures 95,653 1,169 96,822

Fiscal 1999
Revenues - external customers $ 650,499 $ 57,713 $ 708,212
Intersegment revenues 5,530 0 5,530
Operating income 28,869 2,658 31,527
Depreciation and amortization 28,932 1,082 30,014
Total assets 390,922 18,115 409,037
Capital expenditures 74,180 442 74,622

The difference in consolidated operating income as shown above and consolidated
income before income tax provision on the consolidated statements of operations
is interest expense, net of $12,388, $9,908 and $4,168 in fiscal 1999, fiscal
1998 and the 1997 transition period, respectively.

36
<PAGE>

14. CHANGE IN FISCAL YEAR

Effective December 31, 1997, the Company changed its fiscal year end from March
31 to December 31. As a result, the December 31, 1997 results of operations are
for a nine-month period. Following are selected financial data for the
twelve-month periods ended December 31, 1998 and 1997 and the nine-month periods
ended December 31, 1997 and 1996.

<TABLE>
<CAPTION>
TWELVE-MONTH PERIODS ENDED NINE-MONTH PERIODS ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------- ----------------------------
1998 1997 (UNAUDITED) 1997 1996 (UNAUDITED)
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Revenue $ 581,401 $ 433,835 $ 342,272 $ 271,256
Income from operations 44,405 31,143 26,151 14,784
Income before income tax provision 34,497 25,592 21,983 10,627
Net income 20,717 15,362 13,191 5,708
Earnings per share - basic 1.38 1.17 0.98 0.47
Earnings per share - diluted 1.37 1.16 0.97 0.47
</TABLE>

15. QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 TOTAL
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999
Operating revenue $ 161,266 $ 176,439 $ 180,702 $ 189,805 $ 708,212
Income from operations 9,359 9,316 6,538 6,314 31,527
Income before income taxes 6,194 6,212 3,433 3,300 19,139
Net income 3,717 3,727 2,058 1,879 11,381
Earnings per share - basic 0.25 0.25 0.14 0.13 .77
Earnings per share - diluted 0.25 0.25 0.14 0.13 .77

YEAR ENDED DECEMBER 31, 1998
Operating revenue $ 123,909 $ 138,434 $ 150,165 $ 168,893 $ 581,401
Income from operations 7,246 11,655 12,497 13,007 44,405
Income before income taxes 5,475 9,467 9,800 9,755 34,497
Net income 3,284 5,683 5,879 5,871 20,717
Earnings per share - basic 0.22 0.38 0.39 0.39 1.38
Earnings per share - diluted (1) 0.22 0.38 0.39 0.39 1.37
</TABLE>

(1) The sum of quarterly earnings per share differs from annual earnings per
share because of differences in the weighted average number of common
shares used in the quarterly and annual computations.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

No items have occurred within the 24 months prior to December 31, 1999 involving
a change of accountants or disagreements on accounting and financial disclosure
matters.

37
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
James B. Baker 54 Director
Steven J. Cleary 41 President, CSI/Crown, Inc.
Robert P. Corker, Jr. 46 Director
William K. Farris 47 Director, Executive Vice President - Operations and President, U.S. Xpress, Inc.
Max L. Fuller 47 Co-Chairman of the Board of Directors, Vice President and Secretary
Ray M. Harlin 50 Director, Executive Vice President - Finance and Chief Financial Officer
E. William Lusk, Jr. 44 Director and Executive Vice President - Marketing
Ronald E. Pate 57 President, U.S. Xpress Leasing, Inc.
Patrick E. Quinn 53 Co-Chairman of the Board of Directors, President and Treasurer
Robert J. Sudderth, Jr. 57 Director
A. Alexander Taylor, II 46 Director
</TABLE>

JAMES B. BAKER has served as a director of the Company since 1994. Mr. Baker has
been a partner in River Associates, LLC since 1993. Mr. Baker is also a director
of Wellman, Inc. (chemical company).

STEVEN J. CLEARY joined the Company in 1991 as Director of Human Resources and
was named Vice President of Human Resources and Safety in 1994 and Executive
Vice President of Human Resources in 1996. He was named Chief Executive Officer
and General Manager of CSI/Crown in 1997 and President of CSI/Crown later in
1997. Prior to joining the Company, he served in operations and human resources
management positions for Ryder Distribution Services and Rollins Transportation
Services.

ROBERT P. CORKER, JR. has served as a director of the Company since 1998. Mr.
Corker has served as President of Corker Group, Inc., a commercial real estate
developer, since 1982. From 1995 to 1996, Mr. Corker served as Commissioner of
Finance and Administration for the State of Tennessee. Mr. Corker also is a
director of JDN Realty, Inc., a real estate investment trust.

WILLIAM K. FARRIS was named Executive Vice President - Operations of the Company
and President of U.S. Xpress in 1996. He previously had served as Vice President
of Operations of the Company since 1993. Prior to that, Mr. Farris was Vice
President of Operations of Southwest Motor Freight, a former operating
subsidiary of the Company, from 1991 to 1993. Mr. Farris was first elected a
director of the Company in 1994.

MAX L. FULLER has served as Co-Chairman of the Board of the Company since March
1994 and Vice President and Secretary of the Company since 1985. Mr. Fuller was
first elected a director of the Company in 1985.

RAY M. HARLIN joined the Company in 1997 as Executive Vice President - Finance
and Chief Financial Officer. He was elected a Director in August 1997. Mr.
Harlin was employed for 25 years with the public accounting firm of Arthur
Andersen LLP. He was a partner with that firm for the last 14 years.

E. WILLIAM LUSK, JR. has served as Vice President - Marketing of the Company
since 1991 and was named an Executive Vice President of the Company in 1996. Mr.
Lusk previously served as Executive Vice President of U.S. Xpress from 1987 to
1990. Mr. Lusk was first elected a director of the Company in 1994.

RONALD E. PATE joined the Company in 1994 as Assistant Director of Maintenance.
He was named Director of Maintenance later that year and was named Executive
Vice President of U.S. Xpress Leasing, Inc., the Company's equipment leasing and
maintenance subsidiary, in 1995. He was named President of U.S. Xpress Leasing,
Inc. in 1996. Prior to joining the Company, Mr. Pate was Vice President of
Chattanooga Operations for Universal Tire Company in Chattanooga, Tennessee.

38
<PAGE>

PATRICK E. QUINN has served as Co-Chairman of the Board of the Company since
March 1994 and President and Treasurer of the Company since 1985. Mr. Quinn was
first elected a director of the Company in 1985.

ROBERT J. SUDDERTH, JR. has served as a Director of the Company since 1998. Mr.
Sudderth has served as Chairman and Chief Executive Officer of SunTrust Bank,
Chattanooga, N.A. since 1989. Mr. Sudderth also is a director of SunTrust
Service Corporation and Dixie Group, Inc., a textile company.

A. ALEXANDER TAYLOR, II has served as a director of the Company since 1994. Mr.
Taylor was named President and Chief Operating Officer of Chattem, Inc., a
consumer products company, in January 1998. Prior to that, Mr. Taylor had served
as a partner with the law firm of Miller & Martin LLP since 1983. Mr. Taylor is
also a director of Chattem, Inc. and The Krystal Company, a quick-service
restaurant company.

ITEM 11. EXECUTIVE COMPENSATION

The information set forth under the caption "Executive Compensation and Other
Information" on pages 7 and 8 of the Proxy Statement is incorporated herein by
reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The information set forth under the caption "Voting Securities and Principal
Holders Thereof" on page 4 of the Proxy Statement is incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information set forth under the caption "Election of Directors" on page 5
and "Certain Transactions" on page 6 of the Proxy Statement is incorporated
herein by reference.

39
<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON
FORM 8-K

(A) 1. FINANCIAL STATEMENTS:
The financial statements are set forth in Part II,
Item 8.

2. FINANCIAL STATEMENT SCHEDULES:
Report of Independent Public Accountants
Schedule II - - Valuation and Qualifying Accounts

3. EXHIBITS:
See the Exhibit Index on page 43 of this Form 10-K.

(B) REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the quarter
ended December 31, 1999.

40
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO U.S. XPRESS ENTERPRISES, INC.:

We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements of U.S. XPRESS ENTERPRISES,
INC. (a Nevada corporation) AND SUBSIDIARIES in this Form 10-K and have issued
our report thereon dated February 1, 2000. Our audit was made for the purpose of
forming an opinion on the financial statements taken as a whole. Schedule II is
the responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.

/s/ ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
February 1, 2000

41
<PAGE>

SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND THE YEARS ENDED
DECEMBER 31, 1998 AND 1999
(In Thousands)

<TABLE>
<CAPTION>
BALANCE AT
BEGINNING CHARGED TO CHARGED TO BALANCE AT END
DESCRIPTION OF PERIOD COST/EXPENSES OTHER (1) DEDUCTIONS(2) OF PERIOD
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOR THE NINE MONTHS ENDED 12/31/97
Reserve for doubtful accounts $ 2,733 $ 774 $ 490 $ 1,097 $ 2,900

FOR THE YEAR ENDED 12/31/98
Reserve for doubtful accounts $ 2,900 $ 641 $ 2,219 $ 2,009 $ 3,751

FOR THE YEAR ENDED 12/31/99
Reserve for doubtful accounts $ 3,751 $ 1,419 $ 683 $ 2,598 $ 3,255

(1) For the nine months ended 12/31/97
Recoveries on accounts written off $ 268
Balance acquired through purchase of JTI 222
-----------
$ 490
===========
For the year ended 12/31/98
Recoveries on accounts written off $ 168
Balance acquired through purchase of Victory 252
Balance acquired through purchase of PST Vans 1,799
-----------
$ 2,219
===========
For the year ended 12/31/99
Recoveries on accounts written off $ 283
Final adjustment resulting from purchase of PST Vans 400
-----------
$ 683
===========
</TABLE>

(2) Accounts written off

42
<PAGE>

EXHIBIT NO. DESCRIPTION
- ----------- -----------

(1) 3.1 Restated Articles of Incorporation of the Company.

(1) 3.2 By-Laws of the Company.

(1) 4.1 Restated Articles of Incorporation of the Company filed as
Exhibit 3.1 and incorporated herein by reference.

(1) 4.2 By-Laws of the Company filed as Exhibit 3.2 and incorporated
herein by reference.

(1) 4.3 Stock Purchase Agreement dated June 10, 1993 by and among Max
L. Fuller, Patrick E. Quinn and the Company.

(1) 4.4 Agreement of Right of First Refusal with regard to Class B
Shares of the Company dated May 11, 1994 by and between Max L.
Fuller and Patrick E. Quinn.

(1) 10.1 Accounts Financing Agreement (Security Agreement) dated
February 2, 1988, as amended, between Congress Financial Corp.
(Southern) and Southwest Motor Freight, Inc.

(1) 10.2 Security Agreement dated December 18, 1985, as amended, by and
between Exchange National Bank of Chicago and U.S. Xpress,
Inc.

(1) 10.3 Security Agreement dated September 17, 1987, as amended, by
and between Exchange National Bank of Chicago and Crown
Transport Systems, Inc.

(1) 10.4 1993 Incentive Stock Plan of the Company.

(1) 10.5 Stock Option Agreement Under 1993 Incentive Stock Plan.

(1) 10.6 Stock Rights and Restrictions Agreement for Restricted Stock
Award Under 1993 Incentive Stock Plan.

(1) 10.7 Self-Funded Employee Benefits Plan Document of the Company.

(1) 10.8 Service Agreement dated May 2, 1994 by and between TTC,
Illinois, Inc. and the Company for the provision of leased
personnel to the Company.

(1) 10.9 Salary Continuation Agreement dated June 10, 1993 by and
between the Company and Max L. Fuller.

(1) 10.10 Salary Continuation Agreement dated June 10, 1993 by and
between the Company and Patrick E. Quinn.

(1) 10.11 Stock Purchase Agreement dated November 28, 1990 by and
between the Company and Clyde Fuller for the acquisition by
the Company of the capital stock of Southwest Motor Freight,
Inc. held by Mr. Fuller, such stock constituting all of the
issued and outstanding capital stock of Southwest Motor
Freight, Inc.

(1) 10.12 Stock Purchase Agreement dated September 30, 1992 by and
between the Company and Clyde Fuller for the acquisition by
the Company of the capital stock of Chattanooga Leasing, Inc.
held by Mr. Fuller, such stock constituting all of the issued
and outstanding capital stock of Chattanooga Leasing, Inc.

(1) 10.13 Articles of Merger and Plan of Merger filed February 24, 1993,
pursuant to which Chattanooga Leasing, Inc. was merged with
and into Southwest Motor Freight, Inc.

43
<PAGE>

EXHIBIT NO. DESCRIPTION
- ----------- -----------

(1) 10.14 Stock Purchase Agreement dated January 1, 1993 by and among
Max L. Fuller, Patrick E. Quinn and the Company for the
acquisition by the Company of the capital stock of U.S.
Xpress, Inc. held by Messrs. Fuller and Quinn, such stock
constituting all of the issued and outstanding capital stock
of U.S. Xpress, Inc.

(1) 10.15 Stock Purchase Agreement dated January 1, 1993 by and among
Max L. Fuller, Patrick E. Quinn and the Company for the
acquisition by the Company of the capital stock of U.S. Xpress
Leasing, Inc. held by Messrs. Fuller and Quinn, such stock
constituting all of the issued and outstanding capital stock
of U.S. Xpress Leasing, Inc.

(1) 10.16 Stock Purchase Agreement dated March 10, 1994 by and between
the Company and L.D. Miller, III for the acquisition by the
Company of the capital stock of Crown Transport Systems, Inc.
held by Mr. Miller, such stock constituting 40% of the issued
and outstanding capital stock of Crown Transport Systems, Inc.

(1) 10.17 Stock Purchase Agreement dated March 17, 1994 by and between
the Company, Patrick E. Quinn and Max L. Fuller for the
acquisition by the Company of the capital stock of Crown
Transport Systems, Inc. held by Messrs. Quinn and Fuller, such
stock constituting 60% of the issued and outstanding capital
stock of Crown Transport Systems, Inc.

(1) 10.18 Stock Purchase Agreement dated March 18, 1994 by and between
the Company and Ken Adams for the acquisition by the Company
of 50% of the capital stock of Hall Systems, Inc. held by Mr.
Adams and the grant of an option to the Company to purchase
the remaining 50% of the capital stock of Hall Systems, Inc.
from Mr. Adams, exercisable beginning April 1, 1997.

(2) 10.19 Software Acquisition Agreement dated September 15, 1994 by and
among Qualcomm Incorporated, Xpress Data Services, Inc., U.S.
Xpress Enterprises, Inc., Patrick E. Quinn, Max L. Fuller,
Information Management Solutions, Inc. and James Coppinger.

(3) 10.20 Stock Purchase Agreement dated October 31, 1994 by and between
the Company and Ken Frohlich for the acquisition by the
Company of the capital stock of National Freight Systems, Inc.
held by Mr. Frohlich, such stock constituting all of the
issued and outstanding capital stock of National Freight
Systems, Inc.

(4) 10.21 Asset Purchase Agreement with respect to acquisition of
CSI/Reeves, Inc.

(5) 10.22 Stock Purchase Agreement with respect to Hall Systems, Inc.

(5) 10.23 Credit Agreement with NationsBank.

(6) 10.24 Amendment No. 1 to Credit Agreement with NationsBank.

(7) 10.25 Asset Purchase Agreement dated June 18, 1996 with
respect to acquisition of Michael Lima Transportation, Inc.

(7) 10.26 Asset Purchase Agreement dated April 1, 1997 with respect to
acquisition of assets from Rosedale Transport, Inc. and
Rosedale Transport, Ltd.

(7) 10.27 Asset Purchase Agreement dated April 25, 1997 with respect to
acquisition of JTI, Inc.

(8) 10.28 Loan and Security Agreement dated June 24, 1997 by and between
Wachovia Bank, N.A. and U.S. Xpress Leasing.

44
<PAGE>

EXHIBIT NO. DESCRIPTION
- ----------- -----------

(9) 10.29 Stock Purchase Agreement dated as of December 24, 1997 by and
between U.S. Xpress Enterprises, Inc. and Richard H. Schaffer,
Richard H. Schaffer Irrevocable Trust dated December 24, 1991
and Richard H. Schaffer Irrevocable Non-Withdrawal Trust dated
December 24, 1991.

(9) 10.30 Credit Agreement dated as of January 15, 1998 among U.S.
Xpress Enterprises, Inc., Wachovia Bank, N.A., NationsBank,
N.A., BankBoston, N.A., SunTrust Bank, Chattanooga, N.A. and
the banks listed therein.

(10) 10.31 Investment and Participation Agreement between U.S. Xpress
Enterprises, Inc. and Wachovia Capital Markets, Inc.

(10) 10.32 Acquisition, Agency, Indemnity and Support Agreement between
U.S. Xpress Enterprises, Inc. and Wachovia Capital Markets,
Inc.

(10) 10.33 Lease Agreement between U.S. Xpress Enterprises, Inc. and
Wachovia Capital Markets, Inc.

(11) 10.34 Agreement and Plan of Merger dated as of July 7, 1998 among
U.S. Xpress Enterprises, Inc. PST, Acquisition Corp. and PST
Vans, Inc.

22 List of the current subsidiaries of the Company.

23 Consent of Arthur Andersen LLP, Independent Public
Accountants.

27 Financial Data Schedule
- --------------------------------

(1) Filed in Registration Statement on Form S-1 dated May 20,
1994. (SEC File No. 33-79208)
(2) Filed in Pre-Effective Amendment No. 2 to Registration
Statement on Form S-1 dated October 4, 1994. (SEC File No.
33-79208)
(3) Filed in Form 10-Q dated November 17, 1994
(4) Filed in Form 10-Q dated November 10, 1995
(5) Filed in Form 10-Q dated February 13, 1996
(6) Filed in Form 10-Q dated November 14, 1996
(7) Filed in Form 10-K dated March 31, 1997
(8) Filed in Registration Statement Form S-1 dated August 19,
1997.
(9) Filed in Form 8-K dated January 29, 1998
(10) Filed in Form 10-Q dated March 28, 1998
(11) Filed in Form S-4 dated July 30, 1998

45
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on the thirtieth
day of March, 1999.

U.S. XPRESS ENTERPRISES, INC.

Date: March 30, 2000 By: /s/ Ray M. Harlin
-------------------------- ----------------------------------
Ray M. Harlin
Chief Financial Officer

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

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Patrick E. Quinn Co-Chairman of the Board of Directors, March 30, 2000
------------------------------ President and Treasurer
Patrick E. Quinn

/s/ Max L. Fuller Co-Chairman of the Board of Directors, March 30, 2000
------------------------------ Vice President and Secretary
Max L. Fuller

/s/ Ray M. Harlin Executive Vice President of Finance and March 30, 2000
------------------------------ Chief Financial Officer (principal financial
Ray M. Harlin and accounting officer)

/s/ E. William Lusk, Jr. Director and Executive Vice President of March 30, 2000
------------------------------ Marketing
E. William Lusk, Jr.

/s/ William K. Farris Director and Executive Vice President March 30, 2000
------------------------------ of Operations
William K. Farris

/s/ James B. Baker Director March 30, 2000
------------------------------
James B. Baker

/s/ Robert P. Corker, Jr. Director March 30, 2000
------------------------------
Robert P. Corker, Jr.

/s/ Robert J. Sudderth, Jr. Director March 30, 2000
------------------------------
Robert J. Sudderth, Jr.

/s/ A. Alexander Taylor, II Director March 30, 2000
------------------------------
A. Alexander Taylor, II
</TABLE>

EXHIBIT 22

SUBSIDIARIES OF U.S. XPRESS ENTERPRISES, INC.
FOR YEAR ENDED DECEMBER 31, 1999

U.S. Xpress, Inc.
CSI/Crown, Inc.
Victory Express, Inc.
PST Vans, Inc.
U.S. Xpress Leasing, Inc.
Xpress Company Store, Inc.
Xpress Air, Inc.

EXHIBIT 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
reports included in this Form 10-K into the Company's previously filed
Registration Statements on Form S-8 (File No. 33-91238, File No. 33-94878, File
No. 33-99728 and File No. 333-37795).

/s/ ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
March 28, 2000

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 259
<SECURITIES> 0
<RECEIVABLES> 105,125
<ALLOWANCES> 3,255
<INVENTORY> 6,078
<CURRENT-ASSETS> 124,332
<PP&E> 275,880
<DEPRECIATION> 69,547
<TOTAL-ASSETS> 409,037
<CURRENT-LIABILITIES> 36,496
<BONDS> 0
0
0
<COMMON> 161
<OTHER-SE> 161,366
<TOTAL-LIABILITY-AND-EQUITY> 409,037
<SALES> 0
<TOTAL-REVENUES> 708,212
<CGS> 0
<TOTAL-COSTS> 675,108
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,577
<INTEREST-EXPENSE> 12,388
<INCOME-PRETAX> 19,139
<INCOME-TAX> 7,758
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,381
<EPS-BASIC> 0.77
<EPS-DILUTED> 0.77

</TABLE>