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To: KeepItSimple who wrote (57630)	5/21/1999 8:57:00 AM
From: Glenn D. Rudolph	Respond to of 164684

No, you're confusing me with Bezos. >It appears that you are unable to comprehend what a business model is all about. KIS, I have to agree with you here in a big way. Bezos is laughing all the way to the bank and thinking some day I will come up with a business model. Maybe not so who cares? Glenn

To: KeepItSimple who wrote (57630)	5/21/1999 10:59:00 AM
From: Glenn D. Rudolph	Respond to of 164684

Price: $36 1/2 12 Month Price Objective: $44 Estimates (Dec) 1998A 1999E 2000E EPS: $2.70 $3.10 $3.50 P/E: 13.5x 11.8x 10.4x EPS Change (YoY): 14.8% 12.9% Consensus EPS: $3.11 $3.48 (First Call: 17-May-1999) Q2 EPS (Jun): $0.68 $0.79 Cash Flow/Share: $6.00 $6.75 $7.75 Price/Cash Flow: 6.1x 5.4x 4.7x Dividend Rate: $0.37 $0.37 $0.37 Dividend Yield: 1.0% 1.0% 1.0% Opinion & Financial Data Investment Opinion: C-2-1-7 Mkt. Value / Shares Outstanding (mn): $949 / 26 Book Value/Share (Dec-1998): $17.47 Price/Book Ratio: 2.1x ROE 1999E Average: 17.0% LT Liability % of Capital: 26.0% Est. 5 Year EPS Growth: 15.0% Stock Data 52-Week Range: $39-$17 3/8 Symbol / Exchange: USFC / OTC Options: Chicago Institutional Ownership-Spectrum: 81.7% Brokers Covering (First Call): 10 ML Industry Weightings & Ratings Strategy; Weighting Rel. to Mkt.: Income: In Line (07-Mar-1995) Growth: In Line (07-Mar-1995) Income & Growth: In Line (07-Mar-1995) Capital Appreciation: In Line (22-Nov-1995) Market Analysis; Technical Rating: Below Average (25-Jun-1998) The views expressed are those of the macro department and do not necessarily coincide with those of the Fundamental analyst. For full investment opinion definitions, see footnotes. Investment Highlights: * USFC held its first analyst day ever on Thursday, and we were very pleased with the results. * It is clear to us that USFC has identified its strategic direction, and we believe the company will be able to continue to generate 15%+ EPS gains. * There were two or three subtle, but potentially powerful surprises which we believe could add to EPS in 2000+, which we'll discuss in greater detail. * At just 11.8x 1999E EPS, the shares are inappropriately priced, in our opinion. They are deserving of at least a 15x P/E multiple, similar to competitor CNF, as we believe long-term EPS growth prospects at the two companies are similar. * Reaffirm Accumulate/Buy, and $44-46 12- month price objective. Fundamental Highlights: * USFC has been approached by Amazon.com (AMZN, $130 3/16, D219) and asked to design a home-delivery solution for particular large consumer appliances. Bulletin United States Truckers & Transportation Services 21 May 1999 Jeffrey A. Kauffman First Vice President USFreightways Corp. Analyst Day Unveils New Positive Developments ACCUMULATE Long Term BUY Reason for Report: Company Update Merrill Lynch & Co. Global Securities Research & Economics Group Global Fundamental Equity Research Department RC#10114135 Stock Performance 16 18 20 22 24 26 28 30 32 34 36 38 40 0.018 0.020 0.022 0.024 0.026 0.028 0.030 0.032 0.034 0.036 0.038 1996 1997 1998 1999 USFreightways Corp. Rel to S&P Composite Index (500) (Right Scale)