(Fort Smith, Arkansas, October 21, 2002) -- Arkansas Best Corporation (Nasdaq: ABFS) today announced third quarter 2002 net income of $18.3 million, or $0.73 per diluted common share, compared to third quarter 2001 net income of $13.0 million, or $0.52 per diluted common share.  The third quarter 2002 earnings-per-share figure includes three items of note.  First, an increase in earnings of $0.12 per diluted common share occurred during the quarter related to a previously announced favorable settlement between Arkansas Best Corporation and the Internal Revenue Service.  Second, Arkansas Best experienced an increase in earnings of $0.09 per diluted common share associated with the after-tax gains on sales of excess freight facilities at ABF.  Finally, there was a $0.02 per diluted common share decrease in earnings resulting from an increase in Arkansas Best’s liability reserves associated with the liquidation of Reliance Insurance Company.  Reliance insured Arkansas Best’s workers’ compensation claims in excess of $300,000 for the period from 1993 through 1999.  Last year’s third quarter earnings-per-share figure includes an after-tax gain of $2.8 million, or $0.11 per diluted common share, resulting from the August 2001 sale of G.I. Trucking Company.

“I am pleased with the performance of our Company during what has proven to be an interesting operating environment,” said Robert A. Young, III, Arkansas Best President and Chief Executive Officer.  “ABF improved its operating ratio nearly half a point versus the third quarter of last year.”

“Arkansas Best continues to have the strongest financial position in the nationwide long-haul, LTL industry,” said Mr. Young.  “During the third quarter, we had strong, positive cash flow and continued to pay down debt.  Total debt, including current maturities and net of temporary investments, was $103.0 million at the end of the quarter.  This produced a debt-to-equity ratio of 0.30:1.”  

ABF Freight System, Inc.®

Third quarter 2002 revenues at ABF were $336 million compared to $330 million during the third quarter of 2001.  ABF’s third quarter operating income was $23.7 million compared to $22.1 million during the third quarter of 2001.  ABF produced a third quarter 2002 operating ratio of 92.9% versus a 93.3% operating ratio during the third quarter of 2001.  This quarter’s operating ratio was negatively impacted by nearly three-quarters of an operating point as a result of increased insurance costs when compared to last year’s third quarter.  “ABF’s operations during the month of September were positively affected by the bankruptcy of Consolidated Freightways Corporation (CF),” said Mr. Young.  “It is sad to see a company with such a long history in our industry close its doors.”

Beginning with this quarter’s earnings press release, Arkansas Best will report revenue-per-hundredweight statistics for ABF on a “billed revenue” basis.  This method is more representative of ABF’s actual yield changes and is in line with the method ABF uses internally to monitor its yield performance.  Revenue-per-hundredweight figures reported in the past used financial statement revenues that include an adjustment to defer a portion of the revenue related to freight in our network not yet delivered at the end of the reporting period.  In prior periods, reported revenue per hundredweight was calculated using financial statement revenues divided by the tonnage billed during the period.  Revenue per hundredweight on a “billed revenue” basis compares the revenue billed during the period, without the revenue deferral adjustment required for financial statement revenues, to the tonnage billed during the same period, thus avoiding any distortion caused by period-to-period changes in deferred revenue.  The last two pages of this release provide a comparison of historical information on revenue-per-hundredweight figures on a “billed” and “financial statement” revenue-per-hundredweight basis. 

ABF’s billed LTL revenue per hundredweight, excluding fuel surcharge, was $22.39, an increase of 5.3% over last year’s third quarter billed LTL revenue per hundredweight of $21.27.  “The strength of this percentage improvement was the result of ABF’s continued emphasis on account profitability, the ability of ABF to reasonably hold its August 1 general rate increase and the September impact of new business gained from the CF bankruptcy,” said Mr. Young. 

LTL tonnage per day for the 2002 third quarter declined by 2.4% when compared to last year.  “During the month of September following CF’s closure, ABF’s LTL pounds per day increased approximately 11% over tonnage trends experienced in August,” said Mr. Young.  “In October, it has become more difficult to measure additional new business from the CF closure due to the longshoremen’s labor dispute affecting ports throughout the west coast.”

“At this point, it is difficult to determine the ultimate effect that CF’s closure will have on ABF’s business levels,” said Mr. Young.  “ABF understands that over half of CF’s business was under contract, with many of those contracts normally renewing during the fourth quarter of the year.  ABF also believes that some of the CF business taken by other carriers is being handled for a 60- or 90-day trial period.  As a result, much of this freight has not found a permanent home and may not do so until next spring.  ABF continues to be cautious about what new business it adds, with priority being placed on continuing to give superior service to our existing customers while emphasizing the profitability of any new business that is added.  The freight that ABF has received as a result of the CF closure, including business from new accounts and additional business from existing accounts, has profitability comparable to that of ABF’s business prior to the CF bankruptcy.  In addition, the new freight has allowed ABF to benefit from some of the operating leverage that existed in its network.”

“Though ABF’s improved third quarter operating ratio was favorably impacted by additional CF business added during September, it is important to point out that ABF was having a good third quarter prior to CF’s exit from the marketplace,” said Mr. Young.  “In fact, ABF’s operating ratio was in the lower 90s in August 2002.  Two things that positively impacted ABF’s performance were reduced cargo claims and improved productivity.”  ABF’s cargo claim ratio, a measure of net cash payouts to revenue, was 0.78% of total revenue in the third quarter of 2002.  Year to date, ABF’s cargo claim ratio is 0.79% of total revenue.  “We believe these cargo claim figures lead the long-haul, LTL industry and allow ABF to attract additional business when the customer places a high value on undamaged deliveries,” said Mr. Young.  “Throughout the third quarter, the productivity of ABF’s dock employees, city drivers and yard personnel continued to show improvement.”

In the third quarter of 2002, per day LTL shipments in two-day transit time lanes decreased 0.6% compared to a 0.3% shipment increase in ABF’s longer haul business. 

“In an effort to relieve current capacity issues at specific locations and position the Company for future growth, ABF is interested in some of the CF facilities that are now available throughout the United States,” said Mr. Young.  “We anticipate these properties will be sold at auction, perhaps before year-end.  ABF may bid on certain properties with market values up to $20 million in total.  Obviously, in an auction process, there is no way to predict how many of our bids might be successful, if any.”

Recognition of Excellence at ABF

During the third quarter, ABF and its employees in various areas of the Company were recognized with several honors.  In August, ABF was named to the Top 10 of the Net Marketing 100, a ranking of the best business-to-business Web sites.  ABF’s Web site (at: www.abf.com) is a repeat winner of this award and is the only LTL motor carrier Web site selected in 2002.  The American Trucking Associations (ATA) named ABF driver Scott Harris as the 2002 National Driver of the Year.  Harris is the second ABF driver to receive this honor in the last three years.  For the second consecutive year, the ATA recognized ABF as the top LTL motor carrier in claims/loss prevention.  In conjunction with this companywide honor, Richard Lang, Director of Customer Service for ABF, was honored by the ATA as the 2002 “Claims/Loss Prevention Professional of the Year.”  “We are proud of the recognition that has been earned in each of these areas of ABF,” said Mr. Young.  “The diversity of these awards illustrates how the hard work of every person on the ABF team has made us the premier motor carrier in the long-haul, LTL industry.”      

Teamster Negotiations

On October 8, negotiations began on the 2003 National Master Freight Agreement when representatives of Trucking Management Inc. (TMI), the carriers’ negotiating team, and the Teamsters exchanged bargaining goals.  These talks began nearly six months ahead of the March 31, 2003 expiration of the current contract.  ABF joins the other TMI members and representatives of the Teamsters in working toward an early settlement of a fair contract that will build a foundation for long-term growth among the union carrier companies.               

Conference Call

Arkansas Best Corporation will host a conference call with Company executives to discuss the 2002 third quarter results.  The call will be today, Monday, October 21, at 10:00 a.m. EDT.  Interested parties are invited to listen by calling (800) 319-9003.  Following the call, a recorded playback will be available through Thursday, October 31.  To listen to the playback, dial (888) 203-1112.  The passcode for the playback is 554511.  The conference call and playback can also be accessed on Arkansas Best’s Internet Web site at www.arkbest.com through Thursday, October 31.

Forward-Looking Statements

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995: Statements contained in this press release that are not based on historical facts are “forward-looking statements.”  Terms such as “estimate,” “expect,” “predict,” “plan,” “anticipate,” “believe,” “intend,” “should,” “would,” “scheduled,” and similar expressions and the negatives of such terms are intended to identify forward-looking statements.  Such statements are by their nature subject to uncertainties and risk, including, but not limited to, union relations; availability and cost of capital; shifts in market demand; weather conditions; the performance and needs of industries served by Arkansas Best’s subsidiaries; actual future costs of operating expenses such as fuel and related taxes; self-insurance claims and employee wages and benefits; actual costs of continuing investments in technology, the timing and amount of capital expenditures; competitive initiatives and pricing pressures; general economic conditions; and other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s SEC public filings.

ABF FREIGHT SYSTEM, INC.
OPERATING STATISTICS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002
(Includes Fuel Surcharge Revenue, unless otherwise noted)

*Billed Revenue does not include revenue deferral required for financial statement purposes under the Company’s revenue recognition policy. Prior to the third quarter 2002, the Company reported revenue-per-hundredweight statistics using financial statement revenue recognized on a relative transit time basis.

There were 64 workdays in the three months ended September 30, 2002 and 63 workdays in the three months ended September 30, 2001.
There were 191 workdays in the nine months ended September 30, 2002 and in the nine months ended September 30, 2001.
Includes U.S., Canadian and Puerto Rican operations of ABF affiliates.

Contact: Mr. David E. Loeffler, Vice President, Chief Financial Officer and Treasurer

             Telephone: (479) 785-6157

             Mr. David Humphrey, Director of Investor Relations

             Telephone: (479) 785-6200