UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year December 31, 2001. [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to . ----------- ----------- Commission file number 0-19969 ARKANSAS BEST CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 71-0673405 ---------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3801 Old Greenwood Road, Fort Smith, Arkansas 72903 - ----------------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 479-785-6000 Securities registered pursuant to Section 12(b) of the Act: None ---------------------------- (Title of Class) Securities registered pursuant to Section 12(g) of the Act: <Table> <Caption> Name of each exchange Title of each class on which registered ------------------- ---------------------- <S> <C> Common Stock, $.01 Par Value ..................................... Nasdaq Stock Market/NMS </Table> 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 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 amendment to this Form 10-K [ X]. The aggregate market value of the voting stock held by non-affiliates of the Registrant as of February 25, 2002, was $579,133,549. The number of shares of Common Stock, $.01 par value, outstanding as of February 25, 2002, was 24,594,115. Documents incorporated by reference into the Form 10-K: 1) The following sections of the 2001 Annual Report to Stockholders: - Market and Dividend Information - Selected Financial Data - Management's Discussion and Analysis of Financial Condition and Results of Operations - Quantitative and Qualitative Disclosures About Market Risk - Financial Statements and Supplementary Data 2) Proxy Statement for the Annual Stockholders' meeting to be held April 24, 2002. INTERNET: www.arkbest.com 1
ARKANSAS BEST CORPORATION FORM 10-K TABLE OF CONTENTS <Table> <Caption> ITEM PAGE NUMBER NUMBER <S> <C> PART I Item 1. Business .................................................................................... 3 Item 2. Properties .................................................................................. 9 Item 3. Legal Proceedings ........................................................................... 10 Item 4. Submission of Matters to a Vote of Security Holders ......................................... 10 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters ....................... 11 Item 6. Selected Financial Data ..................................................................... 11 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations .................................................................. 11 Item 7A. Quantitative and Qualitative Disclosures About Market Risk................................... 11 Item 8. Financial Statements and Supplementary Data ................................................. 11 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ........................................................ 11 PART III Item 10. Directors and Executive Officers of the Registrant .......................................... 12 Item 11. Executive Compensation ...................................................................... 12 Item 12. Security Ownership of Certain Beneficial Owners and Management .............................. 12 Item 13. Certain Relationships and Related Transactions .............................................. 12 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ............................ 13 </Table> 2
PART I Except for historical information contained herein, the following discussion contains forward-looking statements that involve risks and uncertainties. Arkansas Best Corporation's (the "Company") actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Item 1, "Business." ITEM 1. BUSINESS (a) GENERAL DEVELOPMENT OF BUSINESS CORPORATE PROFILE Arkansas Best Corporation (the "Company") is a diversified holding company engaged through its subsidiaries primarily in motor carrier transportation operations and intermodal transportation operations. Principal subsidiaries are ABF Freight System, Inc. ("ABF"); Clipper Exxpress Company and related companies ("Clipper"); FleetNet America, LLC; and until August 1, 2001, G.I. Trucking Company ("G.I. Trucking") (see Note S appearing on page 49 of the registrant's Annual Report). The Company's operations included the truck tire retreading and new tire sales operations of Treadco, Inc. ("Treadco") until October 31, 2000 (see Note R appearing on page 48 of the registrant's Annual Report). HISTORICAL BACKGROUND The Company was publicly owned from 1966 until 1988, when it was acquired in a leveraged buyout by a corporation organized by Kelso & Company, L.P. ("Kelso"). In 1992, the Company completed a public offering of Common Stock, par value $.01 (the "Common Stock"). The Company also repurchased substantially all the remaining shares of Common Stock beneficially owned by Kelso, thus ending Kelso's investment in the Company. In 1993, the Company completed a public offering of 1,495,000 shares of $2.875 Series A Cumulative Convertible Exchangeable Preferred Stock ("Preferred Stock"). The Company's Preferred Stock traded on The Nasdaq National Market ("Nasdaq") under the symbol "ABFSP". On July 10, 2000, the Company purchased 105,000 shares of its Preferred Stock at $37.375 per share, for a total cost of $3.9 million. All of the shares purchased were retired. As of December 31, 2000, the Company had outstanding 1,390,000 shares of Preferred Stock. On August 13, 2001, the Company announced the call for redemption of its Preferred Stock. As of August 10, 2001, 1,390,000 shares of Preferred Stock were outstanding. At the end of the extended redemption period on September 14, 2001, 1,382,650 shares of the Preferred Stock were converted to 3,511,439 shares of Common Stock. A total of 7,350 shares of Preferred Stock were redeemed at the redemption price of $50.58 per share. The Company paid $0.4 million to the holders of these shares in redemption of their Preferred Stock. The Company delisted its preferred stock trading on Nasdaq under the symbol "ABFSP" on September 12, 2001, eliminating the Company's annual dividend requirement. In August 1995, pursuant to a tender offer, a wholly owned subsidiary of the Company purchased the outstanding shares of common stock of WorldWay Corporation ("WorldWay"), at a price of $11 per share (the "Acquisition"). WorldWay was a publicly held company engaged through its subsidiaries in motor carrier operations. The total purchase price of WorldWay amounted to approximately $76.0 million. 3
ITEM 1. BUSINESS - continued During the first half of 1999, the Company acquired 2,457,000 shares of Treadco common stock for $23.7 million via a cash tender offer pursuant to a definitive merger agreement. As a result of the transaction, Treadco became a wholly owned subsidiary of the Company (see Note Q appearing on page 48 of the registrant's Annual Report). On September 13, 2000, Treadco entered into an agreement with The Goodyear Tire & Rubber Company ("Goodyear") to contribute its business to a new limited liability company called Wingfoot Commercial Tire Systems, LLC ("Wingfoot") (see Note R appearing on page 48 of the registrant's Annual Report). The transaction closed on October 31, 2000. On August 1, 2001, the Company sold the stock of G.I. Trucking for $40.5 million in cash to a company formed by the senior executives of G.I. Trucking and Estes Express Lines ("Estes") (see Note S appearing on page 49 of the registrant's Annual Report). (b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS The response to this portion of Item 1 is included in "Note M - Operating Segment Data" appearing on pages 42 through 44 of the registrant's Annual Report to Stockholders for the year ended December 31, 2001, and is incorporated herein by reference under Item 14. (c) NARRATIVE DESCRIPTION OF BUSINESS GENERAL During the periods being reported on, the Company operated in four defined reportable operating segments: (1) ABF; (2) G.I. Trucking (which was sold on August 1, 2001) (see Note S appearing on page 49 of the registrant's Annual Report); (3) Clipper; and (4) Treadco (which was contributed to Wingfoot on October 31, 2000) (see Note R appearing on page 48 of the registrant's Annual Report). Note M to the Consolidated Financial Statements contains additional information regarding the Company's operating segments and appears on pages 42 through 44 of the registrant's Annual Report to Stockholders for the year ended December 31, 2001, and is incorporated herein by reference under Item 14. DISCONTINUED OPERATIONS At December 31, 1998, the Company was engaged in international ocean freight services through its subsidiary, CaroTrans International, Inc. ("Clipper International"), a non-vessel operating common carrier (N.V.O.C.C.). On February 28, 1999, the Company completed a formal plan to exit its international ocean freight N.V.O.C.C. services by disposing of the business and assets of Clipper International. On April 17, 1999, the Company closed the sale of the business and certain assets of Clipper International, including the trade name "CaroTrans International, Inc." All of the assets have been liquidated by the Company. EMPLOYEES At December 31, 2001, the Company and its subsidiaries had a total of 11,865 employees of which approximately 73% are members of a labor union. 4
ITEM 1. BUSINESS - continued MOTOR CARRIER OPERATIONS LESS-THAN-TRUCKLOAD MOTOR CARRIER OPERATIONS GENERAL The Company's less-than-truckload ("LTL") motor carrier operations are conducted through ABF, ABF Freight System (B.C.), Ltd. ("ABF-BC"), ABF Freight System Canada, Ltd. ("ABF-Canada"), ABF Cartage, Inc. ("Cartage"), and Land-Marine Cargo, Inc. ("Land-Marine") (collectively "ABF") and until August 1, 2001, G.I. Trucking Company (see Note S appearing on page 49 of the registrant's Annual Report). LTL carriers offer services to shippers transporting a wide variety of large and small shipments to geographically dispersed destinations. LTL carriers pick up small shipments throughout the vicinity of a local terminal and consolidate them at the terminal. Shipments are consolidated by destination for transportation by intercity units to their destination cities or to distribution centers. Shipments from various locations can be reconsolidated for transportation to distant destinations, other distribution centers or local terminals. Once delivered to a local terminal, a shipment is delivered to the customer by local trucks operating from the terminal. In some cases, when a sufficient number of different shipments at one origin terminal are going to a common destination, they can be combined to make a full trailer load. A trailer is then dispatched to that destination without the freight having to be rehandled. COMPETITION, PRICING AND INDUSTRY FACTORS The trucking industry is highly competitive. The Company's LTL motor carrier subsidiaries actively compete for freight business with other national, regional and local motor carriers and, to a lesser extent, with private carriage, freight forwarders, railroads and airlines. Competition is based primarily on personal relationships, price and service. In general, most of the principal motor carriers use similar tariffs to rate interstate shipments. Competition for freight revenue, however, has resulted in discounting which effectively reduces prices paid by shippers. In an effort to maintain and improve its market share, the Company's LTL motor carrier subsidiaries offer and negotiate various discounts. The trucking industry, including the Company's LTL motor carrier subsidiaries, is directly affected by the state of the overall economy. The trucking industry faces rising costs including government regulations on safety, maintenance and fuel economy. In addition, seasonal fluctuations also affect tonnage to be transported. Freight shipments, operating costs and earnings also are affected adversely by inclement weather conditions. INSURANCE AND SAFETY Generally, claims exposure in the motor carrier industry consists of cargo loss and damage, auto liability, property damage and bodily injury and workers' compensation. The Company's motor carrier subsidiaries are effectively self-insured for the first $100,000 of each cargo loss, $1,000,000 of each workers' compensation loss and $200,000 of each general and auto liability loss, plus an aggregate of $1,870,000 of auto liability losses between $200,000 and $500,000. The Company maintains insurance adequate to cover losses in excess of such amounts. However, the Company has experienced situations where excess insurance carriers have become insolvent (see Note T appearing on page 49 of the registrant's Annual Report). The Company pays premiums to state guaranty funds, in states where it has workers' compensation self-insurance authority. In some of these self-insured states, depending on each states rules, the guaranty funds will pay excess claims if the insurer can't, due to insolvency. However, there can be no certainty of the solvency of individual state guaranty funds. The Company has been able to obtain adequate coverage for 2002 and is not aware of problems in the foreseeable future which would significantly impair its ability to obtain adequate coverage at market rates for its motor carrier operations. 5
ITEM 1. BUSINESS - continued ABF FREIGHT SYSTEM, INC. Headquartered in Fort Smith, Arkansas, ABF is the largest subsidiary of the Company. ABF accounted for more than 84.0% of the Company's consolidated revenues for 2001. ABF is one of North America's largest national LTL motor carriers based on revenues for 2001 as reported to the U.S. Department of Transportation ("D.O.T."). ABF provides direct service to over 98.6% of the cities in the United States having a population of 25,000 or more. ABF provides interstate and intrastate direct service to more than 40,000 points through 309 terminals in all 50 states, Canada and Puerto Rico. Through an alliance and relationships with trucking companies in Mexico, ABF provides motor carrier services to customers in that country as well. ABF was incorporated in Delaware in 1982 and is the successor to Arkansas Motor Freight, a business originally organized in 1935. ABF offers long-haul, interstate, regional and intrastate transportation of general commodities through LTL, assured services and expedited shipments. General commodities include all freight except hazardous waste, dangerous explosives, commodities of exceptionally high value, commodities in bulk and those requiring special equipment. ABF's general commodities shipments differ from shipments of bulk raw materials which are commonly transported by railroad, pipeline and water carrier. General commodities transported by ABF include, among other things, food, textiles, apparel, furniture, appliances, chemicals, non-bulk petroleum products, rubber, plastics, metal and metal products, wood, glass, automotive parts, machinery and miscellaneous manufactured products. During the year ended December 31, 2001, no single customer accounted for more than 3.0% of ABF's revenues, and the ten largest customers accounted for less than 9.0% of ABF's revenues. EMPLOYEES At December 31, 2001, ABF employed 11,267 persons. Employee compensation and related costs are the largest components of ABF's operating expenses. In 2001, such costs amounted to 65.6% of ABF's revenues. Approximately 77% of ABF's employees are covered under a collective bargaining agreement with the International Brotherhood of Teamsters ("IBT"). The IBT voted in favor of a new labor contract on April 9, 1998. The contract was effective April 1, 1998, and is for a five-year term. The contract provides for an average annual wage and benefit increase of approximately 2.3% during its term, including a lump-sum payment of $750 for the first contract year for all active employees who are IBT members. Under the terms of the National Agreement, ABF is required to contribute to various multiemployer pension plans maintained for the benefit of its employees who are members of the IBT. Amendments to the Employee Retirement Income Security Act of 1974 ("ERISA") pursuant to the Multiemployer Pension Plan Amendments Act of 1980 (the "MPPA Act") substantially expanded the potential liabilities of employers who participate in such plans. Under ERISA, as amended by the MPPA Act, an employer who contributes to a multiemployer pension plan and the members of such employer's controlled group are jointly and severally liable for their proportionate share of the plan's unfunded liabilities in the event the employer ceases to have an obligation to contribute to the plan or substantially reduces its contributions to the plan (i.e., in the event of plan termination or withdrawal by the Company from the multiemployer plans). Although the Company has no current information regarding its potential liability under ERISA in the event it wholly or partially ceases to have an obligation to contribute or substantially reduces its contributions to the multiemployer plans to which it currently contributes, management believes that such liability would be material. The Company has no intention of ceasing to contribute or of substantially reducing its contributions to such multiemployer plans. Four of the five largest LTL carriers are unionized and generally pay comparable amounts for wages and benefits. Non-union companies typically pay employees less than union companies. Due to its national reputation and its high pay scale, ABF has not historically experienced any significant difficulty in attracting or retaining qualified drivers. 6
ITEM 1. BUSINESS - continued G.I. TRUCKING COMPANY On August 1, 2001, the Company sold the stock of G.I. Trucking for $40.5 million in cash to a company formed by the senior executives of G.I. Trucking and Estes (see Note S appearing on page 49 of the registrant's Annual Report). INTERMODAL OPERATIONS GENERAL The Company's intermodal transportation operations are conducted through Clipper, headquartered in Lemont, Illinois. Clipper operates through two business units: Clipper Freight Management ("CFM") and Clipper LTL, and offers domestic intermodal freight services, utilizing a variety of transportation modes including rail and over-the-road. COMPETITION, PRICING AND INDUSTRY FACTORS Clipper operates in highly competitive environments. Competition is based on the most consistent transit times, freight rates, damage-free shipments and on-time delivery of freight. Clipper competes with other intermodal transportation operations, freight forwarders and railroads, as well as with other national and regional LTL and truckload motor carrier operations. Intermodal transportation operations are akin to motor carrier operations in terms of market conditions, with revenues being weaker in the first quarter and stronger in the months of September and October. Freight shipments, operating costs and earnings are also affected by the state of the overall economy and inclement weather. The reliability of rail service is also a critical component of Clipper's ability to provide service to its customers. CLIPPER Clipper's revenues accounted for approximately 8.0% of consolidated revenues for 2001. During the year ended December 31, 2001, Clipper's largest customer accounted for approximately 10.0% of Clipper's revenues. CFM CFM provides services through Clipper Express Company and Agricultural Express of America, Inc. (d/b/a/ Clipper Controlled Logistics). CFM accounted for approximately 71.0% of Clipper's revenues during 2001. CFM provides an extensive list of transportation services such as intermodal and truck brokerage, warehousing, consolidation, transloading, repacking, and other ancillary services. As an intermodal marketing operation, CFM arranges for loads to be picked up by a drayage company, tenders them to a railroad, and then arranges for a drayage company to deliver the shipment on the other end of the move. CFM's role in this process is to select the most cost-effective means to provide quality service and to expedite movement of the loads at various interface points to ensure seamless door-to-door transportation. Clipper Controlled Logistics provides high quality, temperature-controlled intermodal transportation service to fruit and produce brokers, growers, shippers and receivers and supermarket chains, primarily from the West to the Midwest, Canada, and the eastern United States. As of December 31, 2001, Clipper Controlled Logistics owns or leases 594 temperature-controlled trailers that it deploys in the seasonal fruit and vegetable markets. These markets are carefully selected in order to take advantage of various seasonally high rates, which peak at different times of the year. By focusing on the spot market for produce transport, Clipper Controlled Logistics is able to generate, on average, a higher revenue per load compared to standard temperature-controlled carriers that pursue more stable year-round temperature-controlled freight. Clipper Controlled Logistics' services also include transportation of non-produce loads requiring protective services and leasing trailers during non-peak produce seasons. 7
ITEM 1. BUSINESS - continued CLIPPER LTL Clipper LTL operates primarily through Clipper Exxpress Company ("Clipper Exxpress"). Management believes Clipper Exxpress is one of the largest intermodal consolidators and forwarders of LTL shipments in the United States. Clipper LTL accounts for approximately 29.0% of Clipper's 2001 revenues. Clipper LTL's collection and distribution network consists of 21 service centers geographically dispersed throughout the United States. Clipper LTL's selection of markets depends on size (lane density), availability of quality rail service and truck line-haul service, length of haul and competitor profile. Traffic moving between its ten most significant market pairs generates approximately 42.0% of Clipper's LTL revenue. A majority of Clipper's LTL revenue is derived from long-haul, metro area-to-metro area transportation. Although pickup and delivery and terminal handling is performed by independent agents, Clipper LTL has an operations and customer service staff located at or near many of its principal agents' terminals to monitor service levels and provide an interface between customers and agents. TREADCO, INC. On September 13, 2000, Treadco entered into an agreement with Goodyear to form a new limited liability company called Wingfoot Commercial Tire Systems, LLC (see Note R appearing on page 48 of the registrant's Annual Report). The transaction closed on October 31, 2000. ENVIRONMENTAL AND OTHER GOVERNMENT REGULATIONS The Company is subject to federal, state and local environmental laws and regulations relating to, among other things, contingency planning for spills of petroleum products and its disposal of waste oil. In addition, the Company is subject to significant regulations dealing with underground fuel storage tanks. The Company's subsidiaries, or lessees, store fuel for use in tractors and trucks in approximately 76 underground tanks located in 25 states. Maintenance of such tanks is regulated at the federal and, in some cases, state levels. The Company believes that it is in substantial compliance with all such regulations. The Company is not aware of any leaks from such tanks that could reasonably be expected to have a material adverse effect on the Company. The Company has received notices from the EPA and others that it has been identified as a potentially responsible party ("PRP") under the Comprehensive Environmental Response Compensation and Liability Act or other federal or state environmental statutes at several hazardous waste sites. After investigating the Company's or its subsidiaries' involvement in waste disposal or waste generation at such sites, the Company has either agreed to de minimis settlements (aggregating approximately $340,000 over the last 12 years), or believes its obligations with respect to such sites would involve immaterial monetary liability, although there can be no assurances in this regard. As of December 31, 2001, the Company has accrued approximately $2.4 million to provide for environmental-related liabilities. The Company's environmental accrual is based on management's best estimate of the actual liability. The Company's estimate is founded on management's experience in dealing with similar environmental matters and on actual testing performed at some sites. Management believes that the accrual is adequate to cover environmental liabilities based on the present environmental regulations. Accruals for environmental liability are included in the balance sheet as accrued expenses. 8
ITEM 2. PROPERTIES The Company owns its executive office building in Fort Smith, Arkansas, which contains approximately 196,000 square feet. ABF ABF currently operates out of 309 terminal facilities of which it owns 81, leases 48 from an affiliate and leases the remainder from non-affiliates. ABF's principal terminal facilities are as follows: <Table> <Caption> No. of Doors Square Footage (1) ------------ -------------- <S> <C> <C> Owned: Dayton, Ohio 330 259,765 Ellenwood, Georgia 227 153,209 South Chicago, Illinois 274 149,610 Carlisle, Pennsylvania (East) 260 156,468 Dallas, Texas 106 95,110 Leased from affiliate, Transport Realty: North Little Rock, Arkansas 196 148,712 Albuquerque, New Mexico 85 70,980 Carlisle, Pennsylvania (West) 140 66,484 Pico Rivera, California 99 57,460 Leased from non-affiliate: Winston-Salem, North Carolina 150 160,700 Salt Lake City, Utah 91 42,310 </Table> (1) Includes shop and driver room square footage. CLIPPER Clipper operates from 21 service centers, geographically dispersed throughout the United States. Nine of the service centers are facilities leased by Clipper and 12 of the service centers are agent locations. 9
ITEM 3. LEGAL PROCEEDINGS Various legal actions, the majority of which arise in the normal course of business, are pending. None of these legal actions are expected to have a material adverse effect on the Company's financial condition, cash flows or results of operations. The Company maintains insurance against certain risks arising out of the normal course of its business, subject to certain self-insured retention limits. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of stockholders during the fourth quarter ended December 31, 2001. 10
PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The information set forth under the caption "Market and Dividend Information" on page 7 of the registrant's Annual Report to Stockholders for the year ended December 31, 2001, is incorporated by reference under Item 14 herein. ITEM 6. SELECTED FINANCIAL DATA The information set forth under the caption "Selected Financial Data" on page 6 of the registrant's Annual Report to Stockholders for the year ended December 31, 2001, is incorporated by reference under Item 14 herein. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS "Management's Discussion and Analysis of Financial Condition and Results of Operations," appearing on pages 8 through 19 of the registrant's Annual Report to Stockholders for the year ended December 31, 2001, is incorporated by reference under Item 14 herein. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK "Quantitative and Qualitative Disclosures About Market Risk," appearing on page 20 of the registrant's Annual Report to Stockholders for the year ended December 31, 2001, is incorporated by reference under Item 14 herein. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The report of independent auditors, consolidated financial statements and supplementary information, appearing on pages 21 through 51 of the registrant's Annual Report to Stockholders for the year ended December 31, 2001, are incorporated by reference under Item 14 herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. 11
PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The sections entitled "Election of Directors," "Directors of the Company," "Board of Directors and Committees," "Executive Officers of the Company" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's Proxy Statement for the Annual Meeting of Stockholders to be filed by the Company with the Securities and Exchange Commission ("Definitive Proxy Statement") set forth certain information with respect to the directors, nominees for election as directors and executive officers of the Company and are incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The sections entitled "Executive Compensation," "Aggregated Options/SAR Exercises in Last Fiscal Year and Fiscal Year-End Options/SAR Values," "Options/SAR Grants Table," "Executive Compensation and Development Committee Interlocks and Insider Participation," "Retirement and Savings Plans," "Employment Contracts and Termination of Employment and Change in Control Arrangements" and the paragraph concerning directors' compensation in the section entitled "Board of Directors and Committees" in the Company's Definitive Proxy Statement set forth certain information with respect to compensation of management of the Company and are incorporated herein by reference, provided, however, the information contained in the sections entitled "Report on Executive Compensation by the Executive Compensation and Development Committee and Stock Option Committee" and "Stock Performance Graph" are not incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The section entitled "Principal Stockholders and Management Ownership" in the Company's Definitive Proxy Statement sets forth certain information with respect to the ownership of the Company's voting securities and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The section entitled "Certain Transactions and Relationships" in the Company's Definitive Proxy Statement sets forth certain information with respect to relations of and transactions by management of the Company and is incorporated herein by reference. 12
PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a)(1) FINANCIAL STATEMENTS The following information appearing in the 2001 Annual Report to Stockholders is incorporated by reference in this Form 10-K Annual Report as Exhibit (13): <Table> <Caption> Page <S> <C> Market and Dividend Information 7 Selected Financial Data 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 - 19 Quantitative and Qualitative Disclosures About Market Risk 20 Report of Independent Auditors 21 Consolidated Financial Statements 22 - 49 Quarterly Results of Operations 47 </Table> With the exception of the aforementioned information, the 2001 Annual Report to Stockholders is not deemed filed as part of this report. Financial statements other than those listed are omitted for the reason that they are not required or are not applicable. The following additional financial data should be read in conjunction with the consolidated financial statements in such 2001 Annual Report to Stockholders. (a)(2) FINANCIAL STATEMENT SCHEDULES <Table> <S> <C> For the years ended December 31, 2001, 2000, and 1999. Schedule II - Valuation and Qualifying Accounts and Reserves Page 15 </Table> Schedules other than those listed are omitted for the reason that they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto. (a)(3) EXHIBITS The exhibits filed with this report are listed in the Exhibit Index, which is submitted as a separate section of this report. (b) REPORTS ON FORM 8-K The Company filed Form 8-K dated September 24, 2001, for Item No. 5 - Other Events. The filing announced the results of its call for redemption of all outstanding shares of its $2.875 Series A Cumulative Convertible Exchangeable Preferred Stock. The Company filed Form 8-K dated August 20, 2001, for Item No. 5 - Other Events. The filing announced of its call for redemption of all outstanding shares of its $2.875 Series A Cumulative Convertible Exchangeable Preferred Stock. (c) EXHIBITS See Item 14(a)(3) above. (d) FINANCIAL STATEMENT SCHEDULES The response to this portion of Item 14 is submitted as a separate section of this report. 13
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. ARKANSAS BEST CORPORATION BY: /s/ David E. Loeffler -------------------------------- David E. Loeffler Vice President - Chief Financial Officer and Treasurer 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 and in the capacities and on the dates indicated. <Table> <Caption> Signature Title Date --------- ----- ---- <S> <C> <C> /s/ William A. Marquard Chairman of the Board, Director March 8, 2002 - ------------------------------------- --------------------------- William A. Marquard /s/ Robert A. Young, III Director, Chief Executive Officer March 8, 2002 - ------------------------------------- and President (Principal --------------------------- Robert A. Young, III Executive Officer) /s/ David E. Loeffler Vice President - Chief Financial Officer March 8, 2002 - ------------------------------------- and Treasurer --------------------------- David E. Loeffler /s/ Frank Edelstein Director March 8, 2002 - ------------------------------------- --------------------------- Frank Edelstein /s/ Arthur J. Fritz Director March 8, 2002 - ------------------------------------- --------------------------- Arthur J. Fritz /s/ John H. Morris Director March 8, 2002 - ------------------------------------- --------------------------- John H. Morris /s/ Alan. J. Zakon Director March 8, 2002 - ------------------------------------- --------------------------- Alan J. Zakon </Table> 14
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES ARKANSAS BEST CORPORATION <Table> <Caption> COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F ----------- ---------- ---------- -------------- ------------ ------------- ADDITIONS BALANCE AT CHARGED TO CHARGED TO BEGINNING COSTS AND OTHER ACCOUNTS DEDUCTIONS - BALANCE AT DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE END OF PERIOD ----------- ---------- ---------- -------------- ------------ ------------- ($ thousands) <S> <C> <C> <C> <C> <C> Year Ended December 31, 2001: Deducted from asset accounts: Allowance for doubtful $ 274(D) accounts receivable............ $ 4,595 $ 2,966 $ 1,104(A) 4,908(B) $ 3,483 ============ ============ =========== ========== =========== Year Ended December 31, 2000: Deducted from asset accounts: Allowance for doubtful $ 6,381(B) accounts receivable............ $ 5,775 $ 3,797 $ 2,598(A) 1,194(C) $ 4,595 ============ ============ =========== ========== =========== Year Ended December 31, 1999: Deducted from asset accounts: Allowance for doubtful accounts receivable............ $ 7,051 $ 2,967 $ 2,664(A) $ 6,907(B) $ 5,775 ============ ============ =========== ========== =========== </Table> Note A - Recoveries of amounts previously written off. Note B - Uncollectible accounts written off. Note C - The allowance for doubtful accounts for Treadco, Inc., as of the date of the contribution of substantially all of Treadco's assets and liabilities to Wingfoot (see Note R appearing on page 48 of the registrant's Annual Report). Note D - The allowance for doubtful accounts for G.I. Trucking., as of the date of the sale (see Note S appearing on page 49 of the registrant's Annual Report). NOTE: ALL INFORMATION REFLECTED IN THE ABOVE TABLE HAS BEEN RESTATED TO EXCLUDE VALUATION ALLOWANCES OF DISCONTINUED OPERATIONS. 15
FORM 10-K -- ITEM 14(c) EXHIBIT INDEX ARKANSAS BEST CORPORATION The following exhibits are filed with this report or are incorporated by reference to previously filed material. <Table> <Caption> EXHIBIT NO. <S> <C> 3.1* Restated Certificate of Incorporation of the Company (previously filed as Exhibit 3.1 to the Company's Registration Statement on Form S-1 under the Securities Act of 1933 filed with the Commission on March 17, 1992, Commission File No. 33-46483, and incorporated herein by reference). 3.2* Amended and Restated Bylaws of the Company (previously filed as Exhibit 3.2 to the Company's Registration Statement on Form S-1 under the Securities Act of 1933 filed with the Commission on March 17, 1992, Commission File No. 33-46483, and incorporated herein by reference). 4.1* Form of Indenture, between the Company and Harris Trust and Savings Bank, with respect to $2.875 Series A Cumulative Convertible Exchangeable Preferred Stock (previously filed as Exhibit 4.4 to Amendment No. 2 to the Company's Registration Statement on Form S-1 under the Securities Act of 1933 filed with the Commission on January 26, 1993, Commission File No. 33-56184, and incorporated herein by reference). 4.2* Indenture between Carolina Freight Corporation and First Union National Bank, Trustee with respect to 6 1/4% Convertible Subordinated Debentures Due 2011 (previously filed as Exhibit 4-A to the Carolina Freight Corporation's Registration Statement on Form S-3 filed with the Commission on April 11, 1986, Commission File No. 33-4742, and incorporated herein by reference). 10.1*# Stock Option Plan (previously filed as Exhibit 10.3 to the Company's Registration Statement on Form S-1 under the Securities Act of 1933 filed with the Commission on March 17, 1992, Commission File No. 33-46483, and incorporated herein by reference). 10.2* First Amendment dated as of January 31, 1997 to the $346,971,321 Amended and Restated Credit Agreement dated as of February 21, 1996, among the Company as Borrower, Societe Generale as Managing Agent and Administrative Agent, NationsBank of Texas, N.A. as Documentation Agent and the Banks named herein as the Banks (previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the Commission on February 27, 1997, Commission File No. 0-19969, and incorporated herein by reference). 10.3* First Amendment dated as of January 31, 1997, to the $30,000,000 Credit Agreement dated as of February 21, 1996, among the Company as Borrower, Societe Generale as Agent, and the Banks named herein as the Banks (previously filed as Exhibit 10.3 to the Company's Current Report on Form 8-K, filed with the Commission on February 27, 1997, Commission File No. 0-19969, and incorporated herein by reference). </Table> 16
FORM 10-K -- ITEM 14(c) EXHIBIT INDEX ARKANSAS BEST CORPORATION (CONTINUED) <Table> <Caption> EXHIBIT NO. <S> <C> 10.4*# Arkansas Best Corporation Performance Award Unit Program effective January 1, 1996 (previously filed as Exhibit 10.6 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995, Commission File No. 0-19969, and incorporated herein by reference). 10.5* Second Amendment, dated July 15, 1997, to the $346,971,312 Amended and Restated Credit Agreement among the Company as Borrower, Societe Generale as Managing Agent and Administrative Agent, NationsBank of Texas, N.A., as Documentation Agent, and the Banks named herein as the Banks (previously filed as Exhibit 10.3 to the Company's Current Report on Form 8-K, filed with the Commission on August 1, 1997, Commission File No. 0-19969, and incorporated herein by reference). 10.6* Interest-Rate Swap Agreement effective April 1, 1998 on a notional amount of $110,000,000 with Societe Generale (previously filed as Exhibit 10.1 to the Company's Form 10-Q filed with the Commission on May 13, 1998, Commission File No. 0-19969, and incorporated herein by reference). 10.7* $250,000,000 Credit Agreement dated as of June 12, 1998 with Societe Generale as Administrative Agent and Bank of America National Trust Savings Association and Wells Fargo Bank (Texas), N.A., as Co-Documentation Agents (previously filed as Exhibit 10.2 to the Company's Form 10-Q filed with the Commission on August 6, 1998, Commission File No. 0-19969, and incorporated herein by reference). 10.8*# The Company's Supplemental Benefit Plan (previously filed as Exhibit 4.1 to the Company's Registration Statement on Form S-8 filed with the Commission on December 22, 1999, Commission File No. 333-93381, and incorporated herein by reference). 10.9* The Company's National Master Freight Agreement covering over-the-road and local cartage employees of private, common, contract and local cartage carriers for the period of April 1, 1998 through March 31, 2003. 10.10* First amendment dated as of February 12, 1999, to the $250,000,000 Credit Agreement dated as of June 12, 1998, among the Company as Borrower; Societe Generale, Southwest Agency, as Administrative Agent; and Bank of America National Trust and Savings Association and Wells Fargo Bank (Texas), N.A., as Co-Documentation Agents. 10.11* Amendment dated March 15, 1999, to Amendment No. 1 dated as of February 12, 1999, to the $250,000,000 Credit Agreement dated as of June 12, 1998, among the Company as Borrower; Societe Generale, Southwest Agency, as Administrative Agent; and Bank of America National Trust and Savings Association and Wells Fargo Bank (Texas), N.A., as Co-Documentation Agents. 10.12* Second amendment dated as of August 2, 2000, to the $250,000,000 Credit Agreement dated as of June 12, 1998, among the Company as Borrower; Wells Fargo Bank (Texas), N.A., as Administrative Agent; and Bank of America National Trust and Savings Association and Wells Fargo Bank (Texas), N.A., as Co-Documentation Agents, as amended by Amendment No. 1 and Consent and Waiver dated as of February 12, 1999 and Amendment to Amendment No. 1 and Consent and Waiver dated as of March 15, 1999. </Table> 17
FORM 10-K -- ITEM 14(c) EXHIBIT INDEX ARKANSAS BEST CORPORATION (CONTINUED) <Table> <Caption> EXHIBIT NO. <S> <C> 10.13* Third amendment dated as of September 30, 2000, to the $250,000,000 Credit Agreement dated as of June 12, 1998, among the Company as Borrower; Wells Fargo Bank (Texas), N.A., as Administrative Agent; and Bank of America National Trust and Savings Association and Wells Fargo Bank (Texas), N.A., as Co-Documentation Agents, as amended by Amendment No. 1 and Consent and Waiver dated as of February 12, 1999, Amendment to Amendment No. 1 and Consent and Waiver dated as of March 15, 1999, and Amendment No. 2 dated as of August 2, 2000 (as amended, the "Credit Agreement"). 10.14* Agreement dated September 13, 2000, by and among The Goodyear Tire & Rubber Company and Treadco, Inc., a wholly owned subsidiary of Arkansas Best Corporation. 10.15* Stock Purchase Agreement by and between Arkansas Best Corporation and Estes Express Lines dated as of August 1, 2001. 10.16# Letter re: Proposal to adopt the Company's 2002 Stock Option Plan 13 2001 Annual Report to Stockholders 21 List of Subsidiary Corporations 23 Consent of Ernst & Young LLP, Independent Auditors </Table> * Previously filed with the Securities and Exchange Commission and incorporated herein by reference. # Designates a compensation plan for Directors or Executive Officers. 18