Union Pacific 2002 Annual Report Download - page 41

15
Millions of Dollars, Except Per Share Amounts, Ratios and Employee Statistics
2002[b] 2001 2000[c] 1999 1998[d] 1997 1996 1995 1994[e] 1993[f]
Additional Data[a]
Rail commodity revenue.............. 10,663 10,391 10,270 9,851 9,072 9,712 7,419 6,105 5,216 4,873
Trucking revenue.......................... 1,332 1,143 1,113 1,062 1,034 946 961 976 1,037 939
Rail carloads (000) ....................... 9,131 8,916 8,901 8,556 7,998 8,453 6,632 5,568 4,991 4,619
Trucking shipments (000) ........... 9,482 7,981 7,495 7,708 7,789 7,506 8,223 8,332 8,593 8,206
Rail operating margin (%) .......... 21.0 19.3 17.7 18.0 4.6 12.6 20.9 21.9 22.1 20.9
Rail operating ratio (%) .............. 79.0 80.7 82.3 82.0 95.4 87.4 79.1 78.1 77.9 79.1
Trucking operating margin (%)[h] 5.3 4.7 4.8 1.9 5.2 3.2 (4.9) (3.0) 8.7 9.8
Trucking operating ratio (%)[h]. 94.7 95.3 95.2 98.1 94.8 96.8 104.9 103.0 91.3 90.2
Average employees (000)[i]......... 60.9 61.1 61.8 64.2 65.1 65.6 54.8 49.5 45.5 44.0
Revenue per employee (000) ....... 205.1 196.0 192.2 175.0 161.5 168.9 160.3 151.2 142.7 136.4
Financial Ratios (%)[a]
Debt to capital employed [j] ....... 38.8 42.2 45.1 47.6 49.4 50.9 49.4 50.0 46.6 45.7
Return on equity [k] .................... 13.3 10.6 10.1 10.5 (8.1) 5.3 12.4 16.5 10.9 11.1
[a] Data included the effects of the acquisitions of Motor Cargo as of November 30, 2001, Southern Pacific Rail Corporation as of October
1, 1996, Chicago and North Western Transportation Company as of May 1, 1995, and Skyway Freight Systems, Inc. as of May 31, 1993,
and reflects the disposition of the Corporation’s natural resources subsidiary in 1996, waste management subsidiary in 1995 and logistics
subsidiary in 1998.
[b] 2002 net income includes $214 million pre-tax ($133 million after-tax) gains on asset dispositions. In addition, net income included a
reduction of income tax expense of $67 million related to tax adjustments for prior years’ income tax examinations.
[c] 2000 operating income and net income included $115 million pre-tax ($72 million after-tax) work force reduction charge (see note 13
to the Consolidated Financial Statements, Item 8).
[d] 1998 operating loss and net loss included a $547 million pre-and after-tax charge for the revaluation of OTC goodwill.
[e] 1994 net income included a net after-tax loss of $404 million from the sale of the Corporation’s waste management operations.
[f] 1993 net income included a net after-tax charge for the adoption of changes in accounting methods for income taxes, postretirement
benefits other than pensions and revenue recognition, and a one-time charge for the deferred tax effect of the Omnibus Budget
Reconciliation Act of 1993.
[g] Based on results from continuing operations.
[h] Excluded goodwill amortization in all years, and the revaluation of goodwill in 1998.
[i] Overnite changed its method of reporting full-time employee equivalents, resulting in a 1% increase in employee counts beginning in 2001.
[j] Debt to capital employed is as follows: total debt divided by debt plus equity plus convertible preferred securities.
[k] Based on average common shareholders’ equity.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the Consolidated Financial Statements and applicable notes to
the Consolidated Financial Statements, Item 8, and other information included in this Form 10-K.
As stated in Item 1, Union Pacific Corporation (UPC or the Corporation) consists of two reportable segments, rail and
trucking, as well as UPC’s other product lines (Other). The rail segment includes the operations of Union Pacific Railroad
and its subsidiaries and rail affiliates (UPRR or the Railroad). The trucking segment includes Overnite Transportation
Company (OTC) and Motor Cargo Industries, Inc. (Motor Cargo) as of November 30, 2001, both operating as separate and
distinct subsidiaries of Overnite Corporation (Overnite), an indirect wholly owned subsidiary of UPC. The Corporation’s
other product lines are comprised of the corporate holding company (which largely supports the Railroad), self-insurance
activities, technology companies and all appropriate consolidating entries (see note 1 to the Consolidated Financial
Statements, Item 8).
CRITICAL ACCOUNTING POLICIES
The Corporation’s discussion and analysis of its financial condition and results of operations are based upon its
Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these financial statements requires estimation and judgment that affect