Union Pacific 2002 Annual Report Download - page 6

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4
LETTER TO SHAREHOLDERS
We are setting ourselves apart
as a corporate leader – building
communities in a small way
through our Principals’
Partnership program. This new
program, focused on secondary
education leaders working in our
service territory, has already
received an overwhelming
response. As we continue to roll
out the program across our system,
we’re reinforcing a vital link to our
communities and to our future.
World-Class Employees
I’ve been privileged to work for
Union Pacific for 43 years. I enjoy
meeting with employees and dis-
cussing our company’s future. This
year, members of our senior team
visited every service unit, talking to
employees about their jobs and
their ideas. We saw firsthand the
building pride within the UP
family. As a company, our bench
strength has never been greater.
We’ve promoted talented individ-
uals from within and recruited
great folks from other industries to
provide fresh perspectives.
Overnite Corporation
Overnite also had a tremendous
2002 despite tough market condi-
tions. Leveraging its expanded
service area, Overnite is building
networks.It’s accessing new mar-
kets with great success – attaining
revenue and net income levels
that haven’t been seen since 1994.
The year also marked the end of
the Teamsters’ three-year strike
against Overnite and a competitor’s
forced closure provided new
business opportunities.
Looking Ahead
Union Pacific’s future has never
been brighter. Our unparalleled
franchise cannot be replicated,
and our yield strategy will help us
achieve continued success.
Undoubtedly, 2003 will have
challenges. The economic picture
remains cloudy, threats of war
continue to loom and investor
confidence remains shaken. We
cannot control these factors, but
we can control our focus – margin
improvement, increased returns
and strong free cash flow.
We will build on our strong
tradition of total quality
management, recognizing that
quality processes are vital to the
cycles of improvement making
Union Pacific a better company,
one where:
Customers want to do business,
Employees are proud to work, and
Shareholder value is created.
n
Dick Davidson, Chairman and Chief Executive Officer
$ MILLIONS
Free Cash Flow (After Dividends)
Union Pacific Corporation
99 00 01 02
$57
$217
$250
$528
Revenues grew 4 percent to a record $12.5 billion,
free cash flow after dividends totaled $528 million
and return on total capital improved.