(Fort Smith, Arkansas, October 23, 2006) — Arkansas Best Corporation (Nasdaq: ABFS) today announced third quarter 2006 revenue of $507.3 million, an 11.2% per-day increase versus $463.3 million from continuing operations in the third quarter of 2005.  Third quarter 2006 income from continuing operations was $1.24 per diluted share compared to $1.58 per diluted share in the third quarter of 2005.  Excluding a previously disclosed after-tax settlement accounting charge of $0.02 per share, earnings were $1.26 per diluted share.  This was an improvement of $0.06 per share over third quarter 2005 earnings from continuing operations of $1.20 per diluted share, after adjusting for a $0.38 per share gain on the sale of properties to G.I. Trucking Company.

“ABF’s third quarter operating ratio, excluding the settlement accounting charge, was in the eighties for only the fourth time in the last thirty-five years,” said Robert A. Davidson, Arkansas Best President and Chief Executive Officer.  “As a result, for the past twelve-month period, Arkansas Best’s After-Tax Return on Capital Employed was 17% and our company’s balance sheet continues to be one of the strongest in the transportation industry.”

ABF Freight System, Inc.^®

“During this year’s third quarter, ABF experienced a healthy balance of tonnage growth and yield increases that produced a successful quarter,” said Mr. Davidson.  “ABF’s total tonnage per day increased by 2.5%.  Total tonnage would have been higher if we had not reduced spot volume tonnage with higher prices during the third quarter.  Total billed revenue per hundredweight without fuel surcharge increased by 3.1% which included yield improvement and the impact of profile changes.”

ABF had third quarter 2006 revenue of $493.7 million, a per-day increase of 11.0% compared to third quarter 2005 revenue of $451.8 million.  Third quarter 2006 operating income at ABF, excluding the settlement accounting charge, was $50.5 million compared to $52.0 million in the third quarter of 2005.  ABF’s third quarter 2006 operating ratio was 89.8%, after adjusting for the settlement accounting charge, versus an operating ratio of 88.5% during the third quarter of 2005. 

“ABF’s quarterly operating ratio wasn’t quite as good as the superior number that we posted in the third quarter of last year, but it still reflected an excellent result,” Davidson continued. “In the third quarter of this year, ABF took aggressive steps to improve service levels to customers.  In addition to reducing spot volume tonnage, ABF has added approximately 2,000 new employees throughout its network, resulting in a net increase of over 750 in ABF’s total employee count since the first of the year.  The additional employees also allowed us to reduce our rail usage and thus increase the amount of freight moving in ABF’s linehaul network.  This successful recruiting effort will also position ABF for future growth, especially as we expand in the regional markets.”

“ABF’s productivity statistics, as measured by total weight per labor hour, declined by 4.3% during this year’s third quarter.  This was only partially explained by ABF’s reduction in larger shipments,” said Mr. Davidson.  “As we have seen in the past, the addition of a large number of employees resulted in an initial reduction of productivity.  When these costs are combined with the costs of improvements in customer service levels, ABF’s third quarter operating ratio increased by nearly a point.  Our past experience suggests that productivity will improve as the new employees gain experience.”

Since the end of the third quarter, the percentage change in ABF’s total tonnage per day is running in the mid-to-high single digits below the same period last year.  Excluding the impact of reductions in spot volume tonnage that ABF continues to experience, the percentage change in early October tonnage is flat to down in the low, mid-single digits compared to the same period last year.  “In early October, ABF began to experience a slowdown in freight tonnage that appears to be related mostly to retail customers who have delayed the timing of normal holiday orders,” said Mr. Davidson.  “In addition, based on the continuing decline of ABF’s spot volume tonnage, we suspect that this slowdown is related to softness in the truckload market.”        

Total billed revenue per hundredweight was $25.91, an increase of 6.1% when compared to $24.43 in the third quarter of 2005.  Total billed revenue per hundredweight, excluding fuel surcharge, increased by 3.1%.  “During the third quarter, ABF secured good increases in a pricing environment that is competitive, yet rational,” said Mr. Davidson.  “ABF has a continued focus on obtaining necessary price increases on its base freight rates, especially as fuel prices and related surcharges decline,” said Mr. Davidson.  “ABF will maintain its overall pricing philosophy of focusing on individual account profitability.”

In August, ABF began marketing its Regional Performance Model or RPM which provides improved next-day and second-day services throughout the East Coast.  Beginning in October, ABF has expanded its RPM operation to include most facilities in the eastern two-thirds of the United States. New RPM linehaul operating models that are separate from and parallel to those of ABF’s national linehaul network are being developed.  Once all of these are in place in November, ABF will be offering RPM service in 220 of its 288 systemwide facilities.  “The initial RPM operations are going well, and ABF is adding new employees and making capital investments in equipment to support this initiative.  Our sales and operations employees are excited about the additional business and growth opportunities in RPM,” said Mr. Davidson.  “It is important to remember, however, that business development in these new lanes will occur gradually over time.  We do not expect these RPM shipments to have a meaningful impact on our system revenue totals until sometime in 2007.” 

“We anticipate fourth quarter operating ratio deterioration of as much as a percentage point related to continuing investments in ABF’s RPM initiative,” said Mr. Davidson.  “Though establishment of the RPM network will require initial costs and investments that may adversely affect our current results, ABF is firmly committed to this new market and we expect it to provide significant future long-term growth opportunities.  Fortunately, our strong balance sheet, considerable cash reserves and ABF’s flexibility in offering value to the marketplace allow us to be patient while establishing a new service like RPM.”

Common Stock Purchase

During the third quarter of 2006, Arkansas Best purchased 100,000 shares of its common stock in the open market for an aggregate cost of $4.2 million.  These common shares were added to the company’s treasury stock.  Since January 2003, Arkansas Best has purchased 1,243,150 shares totaling $41.7 million.  Under a program announced in July 2005, Arkansas Best currently has authorization to purchase up to an additional $33.3 million of its common stock.  Arkansas Best plans to continue making open-market purchases of its stock on an opportunistic basis. 

Accounting for Defined Benefit Pension and Other Postretirement Plans

The Financial Accounting Standards Board recently issued Statement No. 158, which requires the funded status of defined benefit pension and other postretirement benefit plans to be recognized in the balance sheet.  As a result of adjusting liabilities to record the funded status of Arkansas Best’s plans, previously unrecognized actuarial losses and prior service costs will be recognized, net of deferred taxes, within a component of stockholders’ equity.  Actual results and assumptions used to determine the funded status of the company’s plans will vary.  Based on current information, Arkansas Best’s stockholders’ equity is estimated to be reduced, net of deferred taxes, by approximately $40 million at December 31, 2006 due to the new accounting standard. 

Conference Call

Arkansas Best Corporation will host a conference call with company executives to discuss the 2006 third quarter results.  The call will be today, Monday, October 23, at 11:00 a.m. EDT (10:00 a.m. CDT).  Interested parties are invited to listen by calling (877) 275-1257 or (706) 634-6529 (for international callers).  Following the call, a recorded playback will be available through the end of the day on Friday, November 17, 2006.  To listen to the playback, dial (800) 642-1687 or (706) 645-9291 (for international callers).  The conference call ID for the playback is 7883322.  The conference call and playback can also be accessed, through Friday, November 17, on Arkansas Best’s Web site at www.arkbest.com.

Company Description

Arkansas Best Corporation, headquartered in Fort Smith, Arkansas, is a transportation holding company.  ABF Freight System, Inc., Arkansas Best’s largest subsidiary, has been in continuous service since 1923.  ABF provides transportation of less-than-truckload (“LTL”) general commodities throughout North America.  More information is available at www.arkbest.com and www.abf.com.

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,” “forecast,” “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; union and non-union 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 Arkansas Best’s Securities and Exchange Commission (“SEC”) public filings.

The following table shows financial data and operating statistics on ABF Freight System, Inc.

ABF FREIGHT SYSTEM, INC.
OPERATING STATISTICS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006

 

	Three Months Ended Sept 30				Nine Months Ended Sept 30
	2006	2005	% Change		2006	2005	% Change
			(Unaudited)
Workdays	63	64			191	192
Billed Revenue* / CWT	$    25.91	$   24.43	6.1%		$     25.01	$    23.77	5.2%
Billed Revenue* / CWT
(without fuel surcharge)	$   22.40	$   21.72	3.1%		$     21.84	$    21.40	2.1%
Billed Revenue* / Shipment	$ 328.85	$  310.53	5.9%		$   318.95	$  295.52	7.9%
Total Shipments	1,482,049	1,466,125	1.1%		4,323,433	4,270,715	1.2%
Total Tonnage (tons)              Tons/Day	940,357          14,926	931,970        14,562	0.9%      2.5%		2,756,654           14,433	2,655,056            13,828	3.8%       4.4%

*Billed revenue does not include revenue deferral required for financial statement purposes under the Company’s revenue recognition policy.  

Includes U.S., Canadian and Puerto Rican operations of ABF affiliates.

Contact:   Ms. Judy R. McReynolds, Vice President, Controller
              Telephone: (479) 785-6157

              Mr. David Humphrey, Director of Investor Relations
              Telephone: (479) 785-6200