SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

Commission file number 0-19791

USF Corporation

(Exact name of registrant as specified in its charter)

8550 W. Bryn Mawr Ave., Ste. 700, Chicago, IL 60631

(Address of principal executive offices) (Zip Code)

(773) 824-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

8¹/2% Notes Due April 15, 2010

6¹/2% Notes Due May 1, 2009

(Title of Class)

      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 þ     No o

      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 registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K.     o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     Yes þ     No o

      The number of shares of common stock outstanding at March 1, 2005 was 28,398,209. The aggregate market value of the voting stock of the registrant as of March 1, 2005 was approximately $1,366,000,000.

TABLE OF CONTENTS

PART I

(Thousands of dollars, except share and per share amounts)

General Development of Business

      USF Corporation (“USF”) provides comprehensive supply chain management services in four business segments through its operating subsidiaries. In the less-than-truckload (“LTL”) segment, carriers provide regional and inter-regional delivery throughout the United States (“US”), certain areas of Canada and throughout Mexico. Our truckload (“TL”) segment offers premium regional and national truckload services. The logistics (“Logistics”) segment provides dedicated fleet, cross-dock operations, supply chain management, contractual warehousing, domestic ocean freight forwarding and reverse logistics services throughout the US, Canada and Mexico. Our corporate and other segment performs support activities for our business segments including executive, information technology (“IT”), corporate sales and various financial management functions. Principal subsidiaries in the LTL segment are USF Holland Inc. (“Holland”), USF Bestway Inc. (“Bestway”), USF Reddaway Inc. (“Reddaway”) and USF Dugan Inc. (“Dugan”). USF Glen Moore Inc. (“Glen Moore”) is our TL carrier. Logistics consists of USF Logistics Services Inc. and USF Processors Inc.

      In December 2003, we began offering transportation and logistics services in Mexico and across the United States/ Mexico border through a joint venture with the shareholders of Autolineas Mexicanas S.A. de C.V. (“ALMEX”). ALMEX, a nationwide LTL carrier in Mexico, has a network of 52 terminals providing service to virtually the entire country.

      In May 2004, we shut down USF Red Star Inc. (“Red Star”), our former Northeast carrier. Subsequent to the closure of Red Star we announced plans to expand Holland’s operations into the Northeast.

      During 2000, we acquired Tri-Star Corporation, Inc., a Tennessee-based truckload carrier. Total consideration for the 2000 acquisition amounted to approximately $17,000 of cash and debt assumed.

      In February 2003, we acquired the stock of System 81 Express, Inc., a truckload carrier based in Tennessee that owned or operated approximately 140 tractors and 260 trailers, for approximately $4,700 in cash and assumed debt. In addition, contingent performance based payments totaling $314 were subsequently made to the former owners of System 81 Express.

      During the first quarter of 2002 we relinquished our 50% interest in our consolidated subsidiary, USF Asia (“Asia”). We recorded a $12,760 charge, which included a $10,000 negotiated payment to our former partner. The remaining $2,760 represented the relinquishment of our net assets to our former partner. We initiated our commitment to dispose of our Asia operation in the fourth quarter of 2001. Accordingly, as required by Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, we applied the provisions of Accounting Principles Board (“APB”) Opinion No. 30, “Reporting the Results of Operations  — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.” The Asia operation was a component of our freight forwarding segment. APB No. 30 required presentation of a business disposal in discontinued operations only when a company disposed of an entire segment. We therefore did not present the Asia operation in discontinued operations.

(Thousands of dollars, except share and per share amounts)

      During 2002, we decided to focus on our core competencies of providing high value comprehensive supply chain management services, and in October 2002 disposed of our non-core freight forwarding business that included several companies operating domestically under the name USF Worldwide Inc. (“Worldwide”) and in Great Britain under the name USF Worldwide Logistics (UK) Ltd. (“LTD”). During the fourth quarter of 2002, we recorded an after-tax charge for the disposal of Worldwide amounting to $13,239. As a result, our consolidated financial statements have been restated to reflect the non-core freight forwarding segment (excluding Asia operations) as discontinued operations for all periods presented. Prior to the disposal, year to date 2002 losses after-tax benefits amounted to $16,978. In December 2002, we reacquired the ocean freight forwarding businesses of Worldwide for total consideration of $3,000. These businesses are recorded in continuing operations in the logistics segment.

      Segment financial information is included in Note 14 to the Consolidated Financial Statements found later in this Form 10-K.

LTL Trucking

      LTL shipments are defined as shipments of less than 10,000 pounds. Typically, LTL carriers transport freight along scheduled routes from multiple shippers to multiple consignees utilizing a network of terminals together with fleets of line-haul and pickup and delivery tractors and trailers. Freight is picked up from customers by local drivers and consolidated for shipment. The freight is then loaded into intercity trailers and transferred by line-haul drivers to the terminal servicing the delivery area. There, the freight is transferred to local trailers and delivered to its destination by local drivers.

      LTL carriers are generally categorized as regional, interregional or long-haul carriers, depending on the distance freight travels from pickup to final delivery. Regional LTL carriers usually have average lengths of haul of 500 miles or less and tend to provide either overnight or second-day service. Regional LTL carriers usually are able to load freight for direct transport to a destination terminal, thereby avoiding the costly and time-consuming use of relay or breakbulk terminals (where freight is rehandled and reloaded to its ultimate destination). In contrast, long-haul LTL carriers (average lengths of haul in excess of 1,000 miles) operate networks of relay or breakbulk and satellite terminals (hub-spoke systems) and rely heavily on interim handling of freight. Interregional carriers (500 to 1,000 miles per average haul) also rely on breakbulk terminals but to a lesser degree than long-haul carriers.

      Our LTL trucking subsidiaries principally compete against regional, interregional and long-haul LTL carriers. To a lesser degree, we compete against truckload carriers, overnight package companies, railroads and airlines. Significant barriers to entry into the regional LTL market exist as a result of the substantial capital requirements for terminals, tractors and trailers. LTL is a competitive market with intense pricing pressure and increasing costs that present a challenge to profit margins.

      Our LTL trucking subsidiaries’ three primary LTL service products are USF Premier® (“Premier”), USF PremierPlus®(“PremierPlus”) and USF Guaranteed® (“Guaranteed”). Premier service is overnight and second-day deliveries generally within each of our LTL trucking subsidiaries’ regional service areas. PremierPlus service is interregional longer haul service between two of our LTL trucking subsidiaries. Guaranteed service includes deliveries within our regional and interregional service areas with a guaranteed date of delivery. Revenue for our Premier, PremierPlus and Guaranteed services accounted for approximately 87%, 12% and 1%, respectively, of the total LTL trucking revenue in 2004. Our Premier and PremierPlus revenue included both LTL and TL shipments. The average length of haul, for combined inter- and intra-regional service was approximately 506 miles.

(Thousands of dollars, except share and per share amounts)

Truckload Trucking

      TL shipments are defined as shipments of 10,000 or more pounds. Typically, TL carriers transport freight along irregular routes from single shippers to single consignees, without the necessity of a network of terminals, using fleets of line-haul sleeper tractors and trailers. Full truckload freight is picked up from the customer and delivered to its final destination by either an employee driver or an independent owner-operator under a leasing agreement.

      Glen Moore transports TL shipments interstate throughout the US generally from the Northeastern and Southeastern states to the West Coast and into the North Central states. It also operates over shorter distances in certain of its dedicated customer lanes. At the end of 2004, Glen Moore operated 760 tractors and 3,116 trailers. Glen Moore primarily utilizes sleeper line-haul tractors and 53 foot trailers. Its average length of haul in 2004 was approximately 200 miles for its short-haul dedicated business and approximately 700 miles for its traditional long-haul business.

Logistics Subsidiaries

      Logistics provides dedicated fleet, cross-dock operations, supply chain management, contractual warehousing, domestic ocean freight forwarding and reverse logistics services to the retail and industrial markets with a focus on consolidation/distribution and fulfillment programs.

      Our cross-docking operation, which accounts for 39% of Logistics’ revenue, has increased in size through a combination of geographic acquisitions and internal expansion to meet the needs of its retail customers. It operates out of 18 centers in the larger metropolitan areas of the US.

Seasonality

      Our results, consistent with the trucking industry in general, typically show seasonal patterns with tonnage and revenue declining during the winter months. Also, inclement weather in the winter months can negatively affect our results.

Customers

      We are not dependent upon any particular industry. We provide services to a wide variety of customers including many large, publicly held companies. For the year ended December 31, 2004, no single customer accounted for more than 3.3% of our revenue and our 50 largest customers as a group accounted for approximately 25% of total revenue.

Fuel

      The motor carrier industry is dependent upon the availability of diesel fuel. Shortages of fuel or rationing of petroleum products could have a material adverse effect on our profitability. Our LTL regional trucking subsidiaries periodically assess a fuel surcharge to offset increases in fuel prices. Fuel surcharges in the TL industry are difficult to implement and collect. In most cases, TL operators generally recover the increases in fuel costs through increases in rates charged for their services. We have not experienced any difficulty in maintaining fuel supplies sufficient to support our operations. We do not use derivatives to manage risk associated with our fuel costs.

Regulation

      We operate under regulatory requirements from the Department of Transportation, the Environmental Protection Agency and various other federal and state agencies. These regulations include driver hours of service rules, drug testing, emission standards, and underground storage tank testing and monitoring. Regulatory and legislative changes may influence operating practices of the trucking industry, the demands for services to shippers, and the costs of providing those services.

(Thousands of dollars, except share and per share amounts)

      Effective January 1, 2004, the federal government instituted new hours of service rules changing the number of hours drivers can work in a 24 hour day. We have implemented procedures in our TL and LTL operations to ensure compliance with the law, as well as to minimize the effect to our cost of operations. The law has had minimal impact on our LTL business because of the shorter length of haul in our LTL operations.

Insurance and Safety

      We are effectively self-insured on our significant operations up to $5,000 per occurrence for cargo loss and damage, bodily injury and property damage, and up to $2,500 per occurrence for workers’ compensation claims. We have obtained third-party insurance for workers’ compensation claims for amounts in excess of $2,500 per occurrence and all other losses in excess of $5,000. As of December 31, 2004, our financial statements included an estimated total liability of $147,680 with respect to these exposures.

      Each of our operating subsidiaries employs safety specialists and maintains safety programs. In addition, we employ specialists to perform compliance checks and conduct safety tests throughout our operations.

      Our insurance expense as a percentage of revenue over the last three years was as follows:

Employees

      At December 31, 2004, we employed approximately 20,000 people, of whom approximately 45% were members of unions. Of these union workers, approximately 90% were employed by Holland and belonged to the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (“IBT”). Members of the IBT at Holland are presently working under the terms of a five-year, industry-wide labor agreement that expires in March 2008.

Forward-Looking Statements

      Certain statements contained in this document or in documents that we incorporate by reference are “forward-looking statements” as outlined in the Private Securities Litigation Reform Act of 1995, such as statements relating to management’s views with respect to future events and financial performance. These statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by them. Accordingly, a forward-looking statement is not a prediction of future events or circumstances, and those future events or circumstances may not occur. A forward-looking statement is usually identified by our use of certain terminology, including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “pro forma,” “anticipates,” “intends” or “plans” or by discussions of strategies, intentions or outlook. Potential risks and uncertainties include, but are not limited to:

(Thousands of dollars, except share and per share amounts)

      We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by applicable laws and regulations.

Available Information

      We make available free of charge on or through our Web site at www.usfc.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.

      Our executive offices are located at 8550 West Bryn Mawr Ave., Ste. 700, Chicago, IL 60631. Our 27,500 square foot facility is occupied under a lease terminating in August 2008.

      Our network of 227 terminals (114 are owned and 113 are leased) is a key element in the operation of our LTL trucking subsidiaries. The terminals vary significantly in size according to the markets served. Sales personnel at each terminal are involved in the solicitation of new business. Each terminal maintains a team of dispatchers who communicate with customers and coordinate local pickup and delivery drivers. Terminals also maintain teams of dockworkers, line-haul drivers and administrative personnel. Certain of our larger and geographically located terminals have maintenance facilities and mechanics. Each terminal is directed by a terminal manager who has general supervisory responsibilities and also plays an important role in monitoring costs and service quality.

      Our TL subsidiary operates from 3 terminals (2 are owned and 1 is leased), and our logistics subsidiaries operate from 60 facilities (8 are owned and 52 are leased).

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

      On December 23, 2003, Idealease Services, Inc. (“Idealease”) filed a complaint against Logistics, in the Circuit Court of Cook County in Chicago, Illinois. Idealease is asking the court to require Logistics to specifically perform an alleged contractual obligation to buy back from Idealease a fleet of vehicles it claims is valued at approximately $14,500 or to pay Idealease that amount. Idealease also contends that Logistics is

(Thousands of dollars, except share and per share amounts)

liable for $557 in lease payments and that certain riders to a lease agreement are invalid due to a lack of consideration. Logistics denies the material allegations in the Idealease complaint and plans to vigorously contest the lawsuit in court.

      On January 14, 2005, USF Corporation was served with a complaint which was filed by Guaranteed Overnight Delivery, Inc. (G.O.D.) on December 29, 2004 in the Superior Court of New Jersey, Bergen County. In the complaint, G.O.D. alleges that USF Corporation owes G.O.D. $1,324 for services performed by G.O.D. for USF Corporation pursuant to an interline agreement. On January 26, 2005 USF Corporation filed an answer to the Complaint denying all allegations. In addition, USF asserted numerous affirmative defenses (including, but not limited to, failure to sue proper parties, failure to state a claim, offset, and lack of jurisdiction) and filed a Notice of Removal of the case to the United States District Court for the District of New Jersey. USF believes that the debt alleged by G.O.D. is overstated, and that the entire amount owed to G.O.D. is offset by amounts owed by G.O.D. to USF.

      On January 26, 2005, USF Bestway, Inc., USF Dugan, Inc., USF Holland, Inc., USF Reddaway, Inc. and USF Red Star, Inc. (“USF Carriers”) filed a Complaint against G.O.D. in the United States District Court for the District of New Jersey. In the Complaint the USF Carriers allege that G.O.D. owes the USF Carriers $890 for services performed by the USF Carriers for G.O.D. as well as additional undetermined amounts for damage claims sustained in connection with services performed by G.O.D. for the USF Carriers. At no point prior to receipt of the complaint was USF Corporation aware that G.O.D.’s claim allegedly amounted to $1,324. USF Carriers intend to vigorously defend G.O.D.’s claim and pursue the counterclaim.

      On November 19, 2004, the Teamsters National Freight Industry Negotiating Committee (“TNFINC”) filed a complaint against USF Corporation, USF Red Star Inc. and USF Holland Inc. in the United States District Court for the Eastern District of Pennsylvania. On January 13, 2005, service of process was effectuated on all three USF defendants. TNFINC alleges certain violations of the National Labor Relations Act and asks for damages. Additionally, TNFINC filed a class action suit on behalf of the employees of USF Red Star alleging violations of the federal Worker Adjustment and Retraining Notification Act (“WARN”) similar to other WARN actions mentioned below. USF intends on vigorously defending this action.

      Including the TNFINC WARN action mentioned above, USF Corporation and/or USF Red Star, Inc. are currently named in five class action lawsuits alleging violations of the federal WARN Act. Three WARN class actions are pending in the United States District Court for the Eastern District of Pennsylvania and one each is pending in the United States District Court for the District of Connecticut and the United States District Court for the Western District of New York. The WARN action in the Western District of New York was filed in late January 2005 by former mechanics of USF Red Star’s Buffalo, New York terminal.

      On September 30, 2004 USF Red Star filed a motion to transfer and consolidate the three original WARN actions with the Multidistrict Litigation Judicial Panel (MDL Panel) requesting that all three cases be consolidated and transferred to the United States District Court for Northern District of New York where USF Red Star’s former headquarters are located in Auburn, New York. On February 16, 2005, the MDL Panel transferred three of the five WARN cases to the United States District Court for the Eastern District of Pennsylvania.

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

(Thousands of dollars, except share and per share amounts)

      None.

PART II

      Our common stock trades on The Nasdaq Stock Market® under the symbol: USFC. On March 7, 2005, there were approximately 7,200 beneficial holders of our common stock. For the high and low sales prices of our common stock for each full calendar quarter for 2004 and 2003, see Item 7 — Management’s Discussion and Analysis.

      Since July 1992, we have paid a quarterly dividend of $0.093333 per share. Although it is our present intention to continue paying quarterly dividends, the timing, amount and form of future dividends will be determined by our Board of Directors and will depend, among other things, on our results of operations, financial condition, cash requirements, certain legal requirements and other factors deemed relevant. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition — Liquidity and Capital Resources.”

(Thousands of dollars, except share and per share amounts)

      The following selected financial data should be read in conjunction with the consolidated financial statements and notes under Item 8 of this Form 10-K.

Selected Consolidated Financial Data

(Thousands of dollars, except share and per share amounts)

      In May 2004, we shut down Red Star and incurred $38,556 in shutdown costs and operating losses for the year ended December 31, 2004 which was included in income from continuing operations. In January 2002, we relinquished our interest in Asia and incurred a charge of $12,760, which was included in income from continuing operations. In addition, $6,000 in loans were made to Asia, which were subsequently written off in the fourth quarter of 2002 in loss from discontinued operations. Also in 2002, upon adoption of SFAS No. 142, we recorded a goodwill impairment charge of $70,022 at Worldwide, our discontinued freight forwarding segment. The charge was shown as a cumulative effect of change in accounting principle.

(Thousands of dollars, except share and per share amounts)

EXECUTIVE SUMMARY

      We reported income from continuing operations of $23,795, or $.85 per diluted share, for the year ended December 31, 2004. This compares to income from continuing operations of $44,101, or $1.61 per diluted share, for the prior year period. Red Star, whose closure was announced on May 23, 2004, was the primary cause of the reduction in earnings, as Red Star incurred shutdown costs and operating losses during 2004 of $38,556, or $.92 per diluted share.

      Revenue in the LTL segment for the year was $2,005,330 compared to $1,898,668 in the prior year. Red Star revenue for 2004 was $88,356 compared to $228,539 in the prior year. During 2004, we participated in a strong freight environment, and the Northeast market was re-established as part of our national LTL service area. Holland expanded its brand into the Northeast by opening eight terminals in early September, providing our customers with high quality LTL service.

      Our TL segment revenue for 2004 was $133,725 compared to $128,093 in the prior year, and income from operations was $3,368 compared to $4,463 in the prior year. However management made significant improvements in the latter half of 2004, and is well positioned to implement further operational initiatives.

      Revenue in the Logistics segment for 2004 was $269,378 compared to $276,441 in the prior year, and income from operations was $9,765 compared to $9,270 in the prior year. As with the TL segment, operational and strategic initiatives are underway in the Logistics segment and we are encouraged by the business development activities that management is taking.

      On February 27, 2005, USF Corporation (USF) and Yellow Roadway Corporation (Yellow Roadway) entered into a definitive agreement pursuant to which Yellow Roadway will acquire USF through the merger of USF with and into a wholly owned subsidiary of Yellow Roadway. At the effective time of the merger, each USF share will be cancelled and converted into the right to receive either 0.9024 shares of Yellow Roadway common stock or, upon a valid cash election, $45.00 in cash, subject to proration such that 50% of the outstanding USF shares receive cash in the transaction and 50% of the outstanding USF shares receive Yellow Roadway common stock. To the extent the aggregate value of the stock consideration falls below 45% of the total consideration to be paid to USF shareholders in the merger, the aggregate amount of cash consideration and the aggregate amount of stock consideration will be adjusted to the extent necessary to preserve the tax-free treatment of the stock consideration in the transaction. The transaction is subject to the approval of shareholders of both companies, the expiration or termination of the waiting period pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. The parties currently expect the transaction to close in the summer of 2005.

CONSOLIDATED RESULTS

      Our revenue and net income (loss) for 2002 through 2004 was as follows:

      The following comments provide an understanding of significant items that were included in net income (loss) during each of the three years presented.

(Thousands of dollars, except share and per share amounts)

2004 Compared to 2003

      Our 2004 revenue increased 4.5% from 2003 including the negative impact from the shutdown of Red Star in the 2004 second quarter. Red Star revenue for 2004 was $88,356 compared to $228,539 in the prior year. There were 253.5 working days in 2004 compared to 252.5 working days in 2003.

2003 Compared to 2002

(Thousands of dollars, except share and per share amounts)

      The following table presents significant items that were included in net income for 2004 and 2003.

RESULTS OF OPERATIONS

LTL Group

      Our revenue, income from operations and operating ratios for 2002 through 2004 for our LTL group was as follows:

      Our LTL segment includes our LTL operating companies, each of which generates revenue from LTL and TL shipments. Revenue from LTL shipments represents approximately 92% of the revenue in the LTL segment. LTL segment data presented in the table below includes revenue from LTL and TL shipments. LTL statistics presented in the table below only include revenue from LTL shipments.

2004 Compared to 2003

      In 2004 our LTL segment’s total revenue increased from 2003 by 5.6% and income from operations decreased from 2003 by 15.6%. The shutdown of Red Star in the 2004 second quarter negatively impacted year over year financial and statistical comparisons. The following provides an understanding of the factors that impacted our operating results:

(Thousands of dollars, except share and per share amounts)

2003 Compared to 2002

      In 2003 our LTL segment’s total revenue and income from operations increased from 2002 by 1.7% and 5.1%, respectively. The following provides an understanding of the factors that impacted our operating results:

Truckload

(Thousands of dollars, except share and per share amounts)

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

2004 Compared to 2003

2003 Compared to 2002

Logistics

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

2004 Compared to 2003

2003 Compared to 2002

(Thousands of dollars, except share and per share amounts)

Corporate and Other

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

2004 Compared to 2003

2003 Compared to 2002

Non-operating Income and Expense

      Interest expense principally includes interest on our guaranteed unsecured notes of $250,000. We had cash invested in interest bearing instruments during all of 2004 and 2003. For 2004 and 2003, interest income also included $304 and $886 from the settlement of tax related matters. At the end of 2004 and 2003, we had cash and cash equivalents of $150,798 and $121,659, respectively.

Income Taxes

      Our effective tax rate on income from continuing operations for 2004 was 45.7% compared with 41.4% in 2003 and 46.3% in 2002. The percentage increase was primarily due to the increase in our 2004 state tax effective rate that was attributable to the discontinued operations of Red Star and the loss of their future state tax benefits which may have been realizable had they remained in operation.

Outlook — Unknown Trends or Uncertainties

      We expect improvement in our operating results in 2005 as a result of a continuing strong freight environment and our strategic initiatives. We believe the initiatives begun in 2004 and new initiatives in 2005 will provide increased revenue opportunities and generate cost savings through operational efficiencies. We believe achieving improved operating results are dependent on us executing our strategic initiatives, the level of competition, and the extent of sustained growth in the US economy.

(Thousands of dollars, except share and per share amounts)

LIQUIDITY AND CAPITAL RESOURCES

      The following is a table of our contractual obligations and other commercial commitments as of December 31, 2004 (See also Notes 4, 5 & 10 to the Consolidated Financial Statements of this Form 10-K):

Sources and Uses of Cash

      Cash increased by $29,139 in 2004 to $150,798 compared to an increase of $67,501 in 2003 to $121,659. Capital expenditures in 2004 were $29,078 higher than in 2003.

      Our primary sources and uses of cash result from the realization of trade accounts receivable and settlement of payroll, trade accounts payable, and operating accruals, including insurance and claims. During the three years ended December 31, 2004, 2003 and 2002, the aging of our receivables remained substantially constant and our cash operating expenses (i.e., operating expenses less depreciation and amortization) as a percentage of revenue were 92.9%, 91.3%, and 91.9%, respectively. The increase in 2004 is the result of the shutdown costs and operating losses from the closure of Red Star.

      As a result of the shutdown of Red Star, we are subject to withdrawal liability for up to 11 multi-employer pension plans. Payments made under MEPPA and Red Star shutdown costs may reduce our cash position. However, we do not believe the closure of Red Star materially changes the underlying drivers of our operating cash flows. We believe that cash generated from our core operations and cash on hand will be sufficient to fund our operations and any potential liabilities resulting from the closure of Red Star.

      Net cash provided by operating activities decreased $11,395 in 2004 compared to the 2003. This was primarily due to a decrease in net income.

      We maintain an appropriate level of tractors and trailers to ensure the effectiveness of our operations. Purchases of tractors and trailers have been, and are expected to be, our most significant type of capital expenditure. These purchases can be deferred or accelerated in order for us to respond to changes in economic conditions and the market for these assets. Purchases of tractors and trailers were $101,251, $34,549 and $86,958 during 2004, 2003, and 2002, respectively. Total capital expenditures were $145,149, $116,081 and $141,322 during 2004, 2003, and 2002, respectively. We made loans of $3,495 and $5,365 in 2004 and 2003, respectively related to our Mexican joint venture.

(Thousands of dollars, except share and per share amounts)

      We have a $200,000 committed credit facility that expires in October 2005. The facility allows up to $125,000 for standby letters of credit to cover our self-insurance programs and other miscellaneous letter of credit requirements. In addition to our committed credit facility, we maintain an uncommitted line of credit, which provides $10,000 of short-term funds. At December 31, 2004, we had no borrowings under the committed credit facility or the uncommitted line of credit, and had $117,442 of outstanding standby letters of credit under the committed credit facility. We intend to renew this facility prior to its expiration.

      On December 28, 2004, we and certain of our subsidiaries completed arrangements for a $100,000 three-year trade receivables securitization facility with ABN AMRO, Inc. As part of this arrangement, we formed a special-purpose, bankruptcy-remote subsidiary (“USF Finance Company LLC”) with two classes of stock. Class A shares, which have 100% of the voting rights but no beneficial interests, are held exclusively by an external independent entity and Class B shares, which have no voting rights but have 100% of the beneficial interests, are held exclusively by USF Corporation. The sole purpose of USF Finance Company LLC is to buy receivables from certain of our subsidiaries and sell undivided interests in accounts receivable to certain commercial paper conduits of the ABN AMRO, Inc. and to USF Assurance Company Ltd (100% owned subsidiary of USF Corporation). The assets of USF Finance Company LLC are not available to pay our claims or those of any of our entities.

      Sales of undivided interests in the pool of accounts receivables are accounted for as a secured borrowing whereby all receivables outstanding under the program and the corresponding debt will be recognized in our consolidated balance sheet. USF Finance Company LLC had $190,626 of accounts receivable at December 31, 2004. There were no securitized borrowings outstanding at year-end.

      The ongoing costs of this program were charged to interest expense in the Consolidated Statements of Operations. At December 31, 2004, we were in compliance with all covenants related to the securitization program.

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

DIVIDENDS AND STOCK REPURCHASE

      Our quarterly dividend rate is $.09333 per share. During 2004, we paid cash dividends totaling $10,343. During 2003, we repurchased 14,000 shares for $336 under a Board authorized repurchase program. There were no shares repurchased in 2004 and 2002. At December 31, 2004, we had authorization to purchase approximately 500,000 additional shares.

      Table of Share Price by Quarter:

(Thousands of dollars, except share and per share amounts)

CRITICAL ACCOUNTING ESTIMATES

Revenue Recognition

      At the beginning of 2003, we changed our method of accounting for revenue and expense recognition for our LTL and TL segments. Under the new accounting method, we recognize revenue for our LTL and TL operations by the allocation of revenue between reporting periods based on the relative transit time in each reporting period with expenses recognized as incurred. In 2002, revenue for our LTL and TL operations was recognized when freight was picked up from the customer. This change was made to more precisely reflect revenue earned, and expenses incurred, as of our reporting dates in response to the increase in our length of haul of freight, which resulted from the implementation of our new marketing strategies.

      The estimation of a shipment’s relative transit time at the end of a period is accomplished utilizing the estimated percentage-of-completion of each shipment based on its location status as provided by our freight management systems. This estimation technique reasonably approximates the in-transit times of shipments. Although there are inherent limitations in the methodology and estimation utilized under this accounting method, the amount of revenue recognized that relates to shipments in-transit at the end of a given quarterly period has been less than 2% of total revenue for each quarter. We believe that our revenue recognition method provides an accurate measurement of our quarterly and annual revenue.

Insurance and Claims

      Casualty claim reserves represent management’s estimates of liability for property damage, public liability and workers’ compensation. We have processes in place to capture claims on a timely basis and we manage these claims with the assistance of a third-party administrator along with our insurers. Our reserves for claims are significant and can involve a high degree of judgment. We therefore utilize various historical data and trends to compute estimated reserve ranges. These ranges, along with other known facts on individually significant outstanding claims, are utilized to best estimate our liability. We continuously monitor our reserves and their underlying estimation methodologies. We believe that our processes and methodologies sufficiently minimize the possibility of the final resolution of claims being materially different than our recorded reserves and our estimates have historically been reasonably accurate. However, our estimated reserves are inherently sensitive to differences between our actual future settlement of liability and our estimation methodologies utilized in the preparation of the current financial statements.

Allowance for Doubtful Accounts

      We follow credit and collection procedures to ensure the customer credit risk is assessed and follow up is performed on delinquent accounts. With the diversity of needs for our service offerings, particularly in the LTL segment, we serve a wide range of customers. Our procedures therefore must be flexible and consider the cost and benefit of providing services to customers to whom there is a higher risk of uncollectible accounts. There can be significant write-offs that occur which are not predictable, such as customer bankruptcies. Our allowance for doubtful accounts is computed by applying factors based on historical write-off activity to our outstanding balances. We believe that our credit and collection procedures, fairly predictable write-off results, and the estimation methodology utilized to compute our allowance for doubtful accounts, minimize the possibility of our actual bad debts being materially different than the amount recorded in our allowance for doubtful accounts. However, our allowance is inherently sensitive to differences between the actual future realization of outstanding customer accounts receivable balances and amounts as computed under our estimation methodology, which is utilized in the preparation of the current financial statements.

Goodwill

      At the beginning of 2002, under SFAS No. 142, goodwill and other intangible assets with indefinite lives are no longer amortized, but are subject to an annual impairment test. The test involves the application of

(Thousands of dollars, except share and per share amounts)

estimation techniques to determine fair values. The test that we utilize compares the present value of our expected future cash flows to the carrying value of our reporting units. The expected future cash flows are determined from our budgetary process. We believe that our budgetary process, which includes various assumptions concerning future operating activities but at the same time a sufficient level of objectivity and scrutiny, provides us with a reasonable estimate of projected future cash flows. However, our actual results will ultimately determine the valuation of goodwill.

Income Taxes

      Income tax expense is based on pre-tax financial accounting income. Deferred tax assets and liabilities provide for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The liability method is used to account for income taxes, which requires deferred taxes to be recorded at the statutory rate to be in effect when the taxes are paid.

Employee Benefit Plans

      We contribute to several union-sponsored multi-employer pension plans. These plans are not administered by us, and contributions are determined in accordance with provisions of negotiated labor contracts. Approximately 70% of our contributions are made to the Central States Pension Fund which has suffered significant investment losses in recent years.

      The Multi-Employer Pension Plan Amendments Act of 1980 established a continuing liability to such union-sponsored pension plans for an allocated share of each plan’s unfunded vested benefits upon substantial or total withdrawal by us or upon termination of the pension plans. The amount of liability has not been determined, but we would expect that it would be material. The Central States Pension Fund’s recent investment performance has adversely affected its funding levels and the fund is seeking corrective measures to address its funding. During the benefit period of the recent legislation, the Central States Plan is expected to meet the minimum funding requirements. If any of these plans, including the Central States Plan, fails to meet minimum funding requirements and the trustees of such a plan are unable to obtain a waiver of the requirements or certain changes in how the applicable plan calculates its funding level from the Internal Revenue Service (“IRS”) or reduce pension benefits to a level where the requirements are met, the IRS could impose an excise tax on all employers participating in these plans and contributions in excess of our contractually agreed upon rates could be required to correct the funding deficiency. If an excise tax were imposed on the participating employers and additional contributions required, it could have a material adverse impact on our financial results. To date, no withdrawal or termination has occurred or is contemplated other than the potential liability for USF Red Star discussed in Notes 3 and 10. For 2004, 2003 and 2002, our contributions to these pension plans were $81,829, $86,147 and $87,894, respectively.

      Additional information concerning our accounting policies for the critical accounting estimates discussed above is discussed in Notes 1 and 9 to the Consolidated Financial Statements found later in this Form 10-K.

RECENT ACCOUNTING PRONOUNCEMENTS

      In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123(R) — a revision of SFAS No. 123 — “Accounting for Stock — Based Compensation”. This statement supersedes APB Opinion No. 25 and provides guidance on the accounting for transactions in which an entity obtains employee services for share-based payments. This statement does not change the guidance for share-based transaction with non-employees nor employee stock ownership plans originally provided by SFAS No. 123. This statement requires, effective for interim periods beginning after July 15, 2005, that share-based payments made to employees are recognized as compensation expense in an amount equal to the fair value of the share-based payments, typically over any related vesting period. We will adopt the modified prospective method as proposed in SFAS No. 123(R) in our 2005 third quarter. We expect to recognize approximately $2,000 of pre-tax compensation expense in 2005 as a result of this change.

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Item 7A — Quantitative and Qualitative Disclosures About Market Risk

      We are exposed to the impact of interest rate changes. Our exposure to changes in interest rates is limited to borrowings, if any, under our committed credit facility, uncommitted line of credit and our trade receivable securitization facility that have variable interest rates tied to the LIBOR rate and our investments in short-term interest bearing instruments. We had no borrowings under either the committed credit facility, line of credit, or the trade receivables securitization facility at December 31, 2004. In addition, we had $150,000 of unsecured notes with an 8.5% fixed annual interest rate and $100,000 of unsecured notes with a 6.5% fixed annual interest rate at December 31, 2004. Because these notes have a relatively long maturity feature, any sudden change in market interest rates would not affect our operating results or cash flows to any significant degree. We estimate that the fair value of the notes exceeded by approximately 14% their carrying value at December 31, 2004. We have no outstanding derivative contracts.

      Our guaranteed notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured senior basis, by all our direct and indirect domestic subsidiaries (the “Subsidiary Guarantors”). We are a holding company and during the periods presented substantially all of the assets of the Subsidiary Guarantors, and substantially all of our operations were conducted by the Subsidiary Guarantors. Accordingly, the aggregate assets, liabilities, earnings and equity of the Subsidiary Guarantors were substantially equivalent to the assets, liabilities, earnings and equity shown in our consolidated financial statements. We believe that separate financial statements of our Subsidiary Guarantors, and other disclosures relating to them, are not meaningful or material to our investors. Our subsidiaries, other than the Subsidiary Guarantors, are minor. There are no restrictions on our ability to obtain funds from our subsidiaries by dividend or loan. We, therefore, are not required to present separate financial statements of our Subsidiary Guarantors, and other disclosures relating to them.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

USF Corporation:

      We have audited the accompanying consolidated balance sheets of USF Corporation and subsidiaries (the “Company”) as of December 31, 2004 and 2003, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2004. Our audits also included the financial statement schedule listed in the Index at Part IV, Item 15(a)(2). These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

      We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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, such consolidated financial statements present fairly, in all material respects, the financial position of USF Corporation and subsidiaries as of December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

      As discussed in Note 1, effective January 1, 2003, the Company changed its method of accounting for revenue and expense recognition for its less-than-truckload and truckload segments.

      As discussed in Note 9, effective January 1, 2002, the Company changed its method of accounting for goodwill and intangible assets upon adoption of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”

      We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 14, 2005 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

March 14, 2005

Chicago, Illinois

USF CORPORATION

CONSOLIDATED BALANCE SHEETS

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See accompanying notes to consolidated financial statements.

USF CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

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See accompanying notes to consolidated financial statements.

USF CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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See accompanying notes to consolidated financial statements.

USF CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

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See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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      Our consolidated financial statements include the accounts of USF and its wholly owned subsidiaries. Intercompany balances and transactions have been eliminated. We report on a calendar year basis. Our quarters consist of thirteen weeks that end on a Saturday either before or after the end of March, June and September.

      Effective January 1, 2003, we changed our method of accounting for revenue and expense recognition for our less-than-truckload (“LTL”) and truckload (“TL”) segments. Under the new accounting method, we recognize revenue for LTL and TL operations by the allocation of revenue between reporting periods based on the relative transit time in each reporting period with expenses recognized as incurred. This change in the method of accounting was made to recognize the increase in our length of haul of freight, which resulted from implementation of our new marketing strategies. We believe that the new method of recognizing revenue and expense is preferable. The cumulative effect of change in accounting principle on prior years resulted in an after-tax charge to income of $1,467 (net of income taxes of $1,064) in the first quarter of 2003.

      As a result of the change in revenue and expense recognition pro forma income from continuing operations and net income/(loss) for the years ended 2004, 2003, and 2002 follows:

      Logistics revenue from warehousing is recognized upon the performance of services. Revenue from dedicated fleet shipments is recognized upon delivery, which is generally the same day as the day of pickup. Domestic ocean freight forwarding transportation revenue is recognized at the time freight is tendered to an ocean going vessel at origin.

      We periodically engage owner-operator drivers to deliver freight in our LTL business as well as our TL and logistics businesses. In all cases, we remain the primary obligor with our customers and act as the

(Thousands of dollars, except share and per share amounts)

principal in the transaction. In addition, we select the owner-operators to provide these services. We also maintain the risks associated with freight delivery such as losses for damaged or lost freight. As a result, revenue in our LTL, TL, and Logistics segments that is related to freight and other transportation services provided on our behalf by other carriers is reported on a gross basis.

      We consider demand deposits and highly liquid investments purchased with original maturities of three months or less as cash.

      Our operating segments have credit and collections procedures that are followed to determine which customers are extended credit for services provided. Services provided to customers where we are not able to determine their creditworthiness are done so on a cash on delivery basis. We have developed a methodology based on write-off history that we apply to our open accounts receivable to assess the adequacy of our allowance for doubtful accounts. Our analysis provides for allowance needs that we may have for large customers that may be experiencing financial difficulty, as well as the overall conditions in the economy.

      Casualty claim reserves represent management’s estimates of claims for property damage, public liability and workers’ compensation. We manage casualty claims with the assistance of a third-party administrator (TPA) along with our insurers. We currently have a retention/deductible of $5,000 for public liability and $2,500 for workers’ compensation. Extensive analysis enables us to estimate casualty reserves, provide for incurred but not reported cases, and development patterns of cases consistently and adequately. At December 31, 2004 and 2003 we had reserve balances for casualty claims of $142,615 and $120,852, respectively.

      Our operating procedures are designed to minimize freight from being lost or damaged while in our care. We have developed reporting procedures to monitor the claims activity at each of our terminals and have developed a methodology to assess our accrual needs for cargo claims. This methodology is based on historical payment activity and lag times for reported claims. Our accrual includes an estimation of payments to be made for claims reported, claims incurred but not reported and specific estimations for any unusually large claims. Our accrual at December 31, 2004 and 2003 for these types of claims was $5,065 and $5,462, respectively.

      Purchases of property and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over periods ranging from three to twelve years for equipment and 30 years for buildings. Maintenance and repairs are charged to operations when incurred, while expenditures that add to the life of the equipment are capitalized. When tractors and trailers are disposed, a gain or loss is recognized. Amortization of leasehold improvements is recognized over the lesser of the life of the lease or the life of the improvement. Other assets mainly include computer hardware and software, and are depreciated using periods ranging from two to seven years.

      We continually evaluate whether events and circumstances have occurred that indicate our long-lived assets may not be recoverable. When factors indicate that our assets should be evaluated for possible impairment, we use an estimate of the related undiscounted future cash flows over the remaining lives of assets in measuring whether or not an impairment has occurred. If an impairment were identified, a loss would be

(Thousands of dollars, except share and per share amounts)

reported to the extent that the carrying value of the related assets exceeded the fair value of those assets as determined by valuation techniques available in the circumstances.

      Goodwill was amortized on a straight-line basis up to 40 years through December 31, 2001. Upon adoption of Statement of Financial Accounting Standards (“SFAS”) No. 142, amortization ceased. The carrying value of goodwill is reviewed on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate that the carrying value may be impaired. (See Note 9).

      Income tax expense is based on pre-tax financial accounting income. Deferred tax assets and liabilities provide for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The liability method is used to account for income taxes, which requires deferred taxes to be recorded at the statutory rate to be in effect when the taxes are paid. (See Note 6).

      We are not dependent upon any particular industry. We provide services to a wide variety of customers including many large, publicly held companies. For the year ended December 31, 2004, no single customer accounted for more than 3.3% of our revenue and our 50 largest customers as a group accounted for approximately 25% of total revenue.

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

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