FORM S-1

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. ¨

The registrant hereby amends this registration statement on such date as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities, in any state where the offer or sale is not permitted.

The shares of common stock are being sold by Union Pacific Corporation, as the selling shareholder described in this prospectus. We will not receive any of the proceeds from the shares of common stock sold by the selling shareholder.

Prior to this offering, there has been no public market for our common stock. The initial public offering price of our common stock is expected to be between $ and $ per share. We have applied to list our common stock on The Nasdaq National Market under the symbol “OVNT.”

The underwriters have an option to purchase a maximum of additional shares from the selling shareholder to cover over-allotments of shares.

Investing in our common stock involves risks. See “Risk Factors” beginning on page 12.

Neither the Securities and Exchange Commission or any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different from that contained in this prospectus. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document.

Until , 2003 (25 days after commencement of the offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

This summary highlights information contained elsewhere in this prospectus. It is not complete and does not contain all of the information you should consider in making your investment decision. You should read the entire prospectus before making an investment decision, especially the information presented under the heading “Risk Factors.”

We conduct our business primarily through two operating subsidiaries, Overnite Transportation Company and Motor Cargo Industries, Inc., each of which is an indirect wholly owned subsidiary of Overnite Holding, Inc. For purposes of this prospectus, unless the context otherwise requires, all references herein to the “company,” “we,” “us” and “our” (i) when used in relation to any period prior to the completion of this offering, mean Overnite Holding, Inc. and its subsidiaries, including Overnite Transportation Company and Motor Cargo Industries, Inc., and (ii) when used in relation to any period after the completion of this offering, mean Overnite Corporation and its subsidiaries, including Overnite Holding, Inc., Overnite Transportation Company and Motor Cargo Industries, Inc. Unless the context otherwise requires, the information in the prospectus assumes that the underwriters do not exercise their over-allotment option.

We are a leading, predominantly non-union provider of less-than-truckload, or LTL, transportation services, offering a full spectrum of regional, inter-regional and long-haul services nationwide. We are one of the largest LTL carriers in the United States, with 204 service centers and a fleet of over 6,000 tractors and 21,000 trailers, allowing us to provide full state coverage to all 50 states. Through our national footprint and our partnerships with other carriers, we are able to provide our customers with direct service to over 45,000 cities in the United States, Canada, Puerto Rico, Guam, the U.S. Virgin Islands and Mexico. We have a diverse base of over 60,000 customers from varying industries and geographic markets, including customers in the retail, chemical, automotive, electronics and furniture industries. We employ a flexible, predominantly non-union workforce of over 14,400 employees.

We provide our services under two established brand names: Overnite Transportation Company, or Overnite Transportation, and Motor Cargo Industries, Inc., or Motor Cargo. Overnite Transportation, our primary carrier brand, is a leading nationwide LTL carrier, providing regional, inter-regional and long-haul service. Overnite Transportation offers a high-quality service product in each of those markets, with an on-time performance rate of over 97% in 2002. Motor Cargo, which was acquired in November 2001, is a leading regional LTL transportation provider, primarily serving the western United States, including Alaska and Hawaii, as well as select markets in Canada, with an on-time performance rate of over 98% in 2002. Through Overnite Transportation and Motor Cargo, we offer our customers a comprehensive selection of service products. In addition to our core LTL service, we also provide our customers with a number of additional value-added LTL services, including expedited and guaranteed delivery, cross-border, assembly and distribution, trade show, government and third party logistics services. Our LTL services (including fuel surcharges associated with these services) accounted for approximately 92% of our operating revenue in 2002. In 2002, approximately 29% of our LTL operating revenue was derived from regional services, 43% was derived from inter-regional services and 28% was derived from long-haul services. We also provide customers with full truckload service, which includes both premium-service dedicated truckload transportation in select markets, as well as truckload delivery on our backhaul lanes. Our truckload services (including fuel surcharges associated with these services) accounted for approximately 8% of our operating revenue in 2002.

from us. Commencing in July 2002, Overnite Transportation employees began to decertify the Teamsters as their collective bargaining representative at Overnite Transportation service centers. This decertification process has resulted in the Teamsters losing representation rights at 22 of the 26 Overnite Transportation service centers where they had previously gained certified representation rights. As a result of the successful resolution of the Teamsters’ strike and the decertifications, the Teamsters’ campaign to organize the employees of Overnite Transportation has become almost entirely dormant. While we were able to achieve positive results during this period, both the Teamsters’ organizing efforts and the strike significantly limited our growth opportunities by hindering our operating efficiency and generating customer concerns about labor strife and its possible impact on service reliability. With the strike and the Teamsters’ organizing efforts largely resolved, we will now be able to increase our focus on enhancing customer relationships, generating new sales and improving the quality and efficiency of our services.

For the year ended December 31, 2002, on a pro forma basis after giving effect to certain transactions that will occur immediately prior to the consummation of this offering, including our separation from Union Pacific, we generated operating revenue of $ , operating income of $ and an operating ratio, defined as operating expenses divided by operating revenue, of %. See “—Corporate History and Background to the Offering” and the “The Acquisition” for a more complete discussion of the transactions that will occur immediately prior to the consummation of this offering.

According to the American Trucking Association, the trucking industry generated approximately $585 billion in revenue during 2002. The trucking industry consists of private fleets and “for-hire” carrier groups. The private fleet segment consists of fleets owned and operated by companies that move their own goods. The for-hire carrier segment is comprised principally of two types of motor carriers: truckload and LTL. Truckload carriers dedicate an entire trailer to one customer from origin to destination. LTL carriers typically pick up multiple shipments from multiple customers on a single truck and then route the goods through service centers, where freight may be transferred to other trucks with similar destinations for delivery. There are both union and non-union carriers in the LTL industry, with unionization being particularly prevalent for national carriers.

The LTL industry accounted for approximately $58 billion of revenue during 2002, and is estimated to be approximately $23 billion in size, excluding package/courier carriers. According to the American Trucking Association, LTL volume is forecasted to grow at an average rate of 3.1% per year through 2008. We estimate that in 2002 the 10 largest LTL carriers generated approximately $17 billion in revenues, representing at least 70% of the LTL industry, excluding package/courier revenues.

Depending on the distance shipped, the LTL industry is comprised of three principal markets:

the same rate as the regional and inter-regional markets. However, the long-haul market nonetheless provides a significant growth opportunity for regional carriers with a national footprint, given the overall size of this market and the ability of these carriers to offer a competitively priced long-haul product.

We believe that the following key industry characteristics favor non-union, established, well-capitalized carriers:

Customers in the LTL industry are generally divided into two categories: national and local accounts. National accounts are predominantly large companies with multiple shipping locations and whose pricing negotiations are typically handled at a centralized location. While generating higher shipping volumes, national accounts customarily have significant purchasing power and therefore typically generate lower profit margins for carriers. Local accounts are typically small to mid-sized companies whose pricing negotiations are conducted at each shipping location. While they typically generate smaller volumes, the lower purchasing power of local account customers usually translates to higher profit margins for carriers. National and local accounts each utilize LTL carriers for regional, inter-regional and long-haul service.

Flexible Non-Union Workforce. We believe that our predominantly non-union workforce provides us with a significant advantage over union LTL carriers, including less restrictive work rules and lower labor costs, particularly with respect to benefit plan costs. The advantages of a less restrictive workforce include flexible work hours and the ability of our employees to perform multiple tasks, which we believe result in greater productivity, customer service and efficiency.

Diversified Portfolio of High-Quality Services. Our diversified portfolio of services, in addition to our core high-quality LTL services, allows us to provide our customers with a “one-stop shop” for their shipping needs. Our services include expedited and guaranteed delivery, assembly and distribution, trade show and government services. We also offer cross-border LTL services to Canada, Puerto Rico, Guam, the U.S. Virgin Islands and Mexico. We have also begun to offer both existing and prospective customers non-asset based third party logistics solutions in which we manage a number of supply chain activities. In addition to our LTL services, we provide our customers with truckload transportation solutions, including premium-service dedicated truckload transportation for selected customers where reliability is a critical requirement.

Established and Diverse Customer Base. We derive our revenue from over 60,000 customers from a variety of geographic regions and industries, with our top 20 customers accounting for 25% of operating revenue in 2002. Our customers range in size from small local customers to large national accounts with multiple shipping and distribution points. We have established long-term, service-based relationships with a number of our customers, and all of our top 20 customers have relationships with us that extend over five years. We believe that our established customer base and the diverse geographic and industry concentration of our customers help protect our business from adverse developments in a single geographic region or economic downturns that disproportionately affect certain industries.

Experienced Management Team. Our senior management team has an average of more than 25 years in transportation related industries. This team was assembled in 1996 and successfully executed a turnaround of our operations, which has positioned us for future growth. Over the past seven years, our senior management team has successfully returned our company to profitability and has resolved the vast majority of our labor-related issues.

Our goal is to generate shareholder value through profitable revenue growth. We believe we have the capacity available to take on additional revenue without a significant increase in fixed costs. We are executing a number of initiatives to increase revenue and enhance our profitability by focusing on customers and markets that produce the highest profit margins for our business. We intend to achieve our goal by implementing the following business strategies:

Continue to Gain Market Share in Long-Haul Markets. In the long-haul market, we believe that we offer a better service product than that of our union competitors, providing shorter transit times on many major market lanes at competitive prices. While we currently have a small market share, we view the long-haul market as our most promising growth opportunity, due to the overall size of the long-haul market, the competitive nature of our service offerings and labor costs that are generally lower than those of our union competitors. We also intend to continue to selectively take advantage of customer and market opportunities available due to the September 2002 closure of Consolidated Freightways Corporation, which predominantly provided long-haul LTL service.

Continue to Grow Regional and Inter-Regional Business. The regional and inter-regional markets are the fastest growing areas of the LTL industry, as large U.S. companies increasingly adopt regional distribution strategies to replace distribution strategies requiring long-haul LTL transportation. We believe that our existing service levels and our commitment to improve the quality and scope of our service offerings will position us to benefit from the expansion of this market. We are continuously working to reduce transit times, improve on-time delivery and reduce cargo claims in order to gain new customers.

Increase Sales to Local Accounts. Local accounts historically have produced higher margins as a result of the lower purchasing power held by local customers. We have undertaken a number of sales initiatives to capture additional local account customers as well as increase our sales to existing local customers.

which include expedited and guaranteed delivery, cross-border, assembly and distribution, trade show, government and third party logistics services. As these services accounted for only 9% of our operating revenue for 2002, and as we had only a small percentage of market share for these services, we believe this market offers a significant growth opportunity. We are also expanding the scope of our dedicated truckload service offering, which accounted for 4% of our operating revenue for 2002. We intend to capture additional sales from these services by working with our customers to develop customized LTL and truckload services to address their evolving transportation service needs.

Drive Operating Efficiencies. We continually seek to re-engineer our freight handling procedures to reduce intermediate handling, improve service and reduce cargo claims. As we no longer need to devote managerial and capital resources towards addressing the Teamsters’ strike and related labor matters, we are implementing an increasing number of efficiency directives, particularly with respect to reducing transit times and improving network density.

Selectively Pursue Acquisition Opportunities. We believe that our industry provides selected opportunities for expansion through acquisition. In the future, we may consider smaller acquisitions both to complement our nationwide infrastructure through the acquisition of assets and service centers from other industry participants and to increase our density in geographic areas where we have capacity to do so.

Overnite Transportation was founded in 1935, became a public company in 1957 and was acquired by Union Pacific Corporation, or Union Pacific, in 1986. In November 2001, Union Pacific acquired Motor Cargo, a leading regional LTL ground transportation services provider in the western United States, including Hawaii and Alaska, as well as select markets in Canada. Immediately following the acquisition, Union Pacific transferred Motor Cargo to us as a wholly owned subsidiary of our company.

Prior to the offering, our business has been conducted primarily through Overnite Transportation and Motor Cargo. Overnite Transportation and Motor Cargo are indirect wholly owned subsidiaries of Overnite Holding, Inc., or Overnite Holding. Overnite Holding is a direct wholly owned subsidiary of Union Pacific. On August 4, 2003, Union Pacific announced that it intended to sell its entire interest in Overnite Holding through an initial public offering. In order to facilitate this offering, immediately prior to the consummation of this offering, Overnite Corporation, a newly formed corporation, will acquire from Union Pacific all of the outstanding common stock of Overnite Holding. In exchange, Overnite Corporation will issue to Union Pacific (1) all of its outstanding common stock and (2) a $1 million promissory note to be payable by Overnite Corporation six months following the date of consummation of the transaction. In addition, subsequent to this transaction but immediately prior to the consummation of this offering, Overnite Holding will pay to Union Pacific a dividend consisting of $128 million in cash and the forgiveness of our net intercompany advances to Union Pacific as of the date of the transaction, which amounted to approximately $170 million as of March 31, 2003. The cash portion of this dividend will be payable from the proceeds of the initial borrowings under the term loan for our new bank credit facility, the terms of which are more fully described under “Bank Credit Facility.” Our new bank credit facility will also include a revolving credit facility, which will be available for working capital, capital expenditures, general corporate purposes and to support letters of credit. We refer to this series of transactions in this prospectus as the “Acquisition.”

Following the Acquisition, Overnite Transportation and Motor Cargo will become indirect wholly owned subsidiaries of Overnite Corporation. Union Pacific, as the selling shareholder, will initially sell in this offering approximately 90.9% of the common stock of Overnite Corporation that it receives in the Acquisition. In the event that the underwriters’ over-allotment option is exercised in full, Union Pacific will sell in this offering 100% of the common stock of Overnite Corporation that it receives in the Acquisition. The existing management of Overnite Transportation will operate Overnite Corporation after the offering and the Acquisition.

Following the Acquisition and this offering, we will become a stand-alone company separate from Union Pacific. Accordingly, we will no longer receive interest income from Union Pacific and we expect to incur certain costs in connection with operating as a stand-alone company that will exceed the costs that are currently incurred or are charged to us by Union Pacific. Further, in connection with this offering, we expect to incur charges and expenses relating to (1) the establishment of certain incentive programs for our employees and initial grants and awards under those programs and (2) the acceleration of vesting requirements of existing awards granted under certain Union Pacific incentive programs. For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Effects of the Separation from Union Pacific and the Offering” and the unaudited pro forma consolidated financial statements included elsewhere in this prospectus. You should also see “The Acquisition,” “Arrangements with Union Pacific Corporation” and “Bank Credit Facility” for a more complete discussion of the transactions that will occur immediately prior to the consummation of this offering and the arrangements we will have with Union Pacific following this offering.

Our headquarters are located at 1000 Semmes Avenue, Richmond, Virginia 23224. Our telephone number is (804) 231-8000.

The aggregate number of shares of common stock to be outstanding after this offering excludes:

The following table sets forth our summary historical consolidated financial and operating data as of the dates and for the periods indicated. The summary historical consolidated statement of income data for each of the years in the three year period ended December 31, 2002 and summary historical consolidated balance sheet data as of December 31, 2001 and 2002 has been derived from our audited consolidated financial statements, which are included elsewhere in this prospectus. The summary historical consolidated balance sheet data as of December 31, 2000 has been derived from our unaudited consolidated financial statements not included in this prospectus. The summary historical consolidated statement of income data for the three months ended March 31, 2002 and 2003 and summary historical consolidated balance sheet data as of March 31, 2002 and 2003 has been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. In our opinion, our unaudited consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and include all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information set forth therein. The results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

The following table also sets forth summary unaudited pro forma consolidated financial data, which gives effect to the transactions described in our unaudited pro forma consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma consolidated financial data has been derived from our consolidated financial statements and includes all adjustments that, in our opinion, are necessary to present fairly the unaudited pro forma consolidated financial data. The pro forma adjustments are based upon available information and certain assumptions we believe are reasonable. The unaudited pro forma consolidated financial data is presented for informational purposes only and does not purport to represent what our results of operations or financial position actually would have been had the transaction reflected occurred on the dates indicated or to project our financial position as of any future date of our results of operations for any future period.

You should read the following summary historical and pro forma financial data in conjunction with “Selected Historical Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and unaudited pro forma consolidated financial statements included elsewhere in this prospectus.

An investment in our common stock involves risks. You should carefully consider the following risk factors, in addition to the other information contained in this prospectus, before deciding to purchase any shares of our common stock.

We are subject to general economic factors that are largely out of our control, any of which could have a material adverse effect on our business, results of operations and financial condition.

Our business is subject to a number of general economic factors, many of which are largely out of our control, that may have a material adverse effect on our business, results of operations and financial condition. These include recessionary economic cycles and downturns in our customers’ business cycles, particularly customers in the retail industry, which accounted for approximately 35% of our operating revenue in 2002, as well as downturns in the principal regional economies where our operations are located. Economic conditions may adversely affect our customers’ business levels and the amount of transportation services that they need. Furthermore, customers encountering adverse economic conditions may have difficulty in paying for our services. Finally, terrorist activities, anti-terrorist efforts, war or other armed conflicts involving the United States or its interests abroad may have a material adverse effect on the U.S. and global economies and on our business, results of operations or financial condition.

Numerous competitive factors could impair our ability to maintain our current level of profitability and adversely affect our financial condition. These factors include the following:

Our pension plans are underfunded, which will require us to make significant contributions to the plans and reduce the cash available for our business, and adverse interest rate or equity market conditions may increase our pension liability and expense and our pension cash funding obligations.

We have several contributory and non-contributory pension plans covering substantially all of our employees. We are required to make cash contributions to our pension plans to the extent necessary to comply with minimum funding requirements imposed by employee benefit and tax laws. The amount of any such required contributions will be determined annually based on an annual actuarial valuation of the plans as performed by the plans’ actuaries. In addition, the Job Creation and Worker Assistance Act of 2002, or JCWAA, includes temporary funding relief rules allowing companies in 2002 and 2003 to use discount rates for determining required cash contributions equal to 120% of the weighted average 30-year U.S. Treasury bond yield. During 2002, we contributed $126.5 million in cash to our defined benefit pension plans, of which $125.0 million was voluntary. With this contribution, our defined benefit pension plans were approximately 94% funded on an IRS funding basis as of December 31, 2002. During the first three months of 2003, we voluntarily contributed $20.0 million to our defined benefit pension plans. In the second quarter of 2003, we contributed another $10.3 million, of which $10.0 million was voluntary, and we intend to voluntarily contribute approximately $15 million more during the remainder of 2003. Subsequent to 2003, we expect to continue funding approximately $45 million per year to help manage any potential required funding in the future. However, the actual amount of contributions subsequent to 2003 will depend upon asset returns, then-current discount rates and a number of other factors, and the amount we may elect or be required to contribute to our pension plans in the future may increase significantly. Specifically, if the funding relief measures under the JCWAA are not extended to years subsequent to 2003, significantly higher cash contributions may be required in future periods.

Our pension plan assets are principally invested in equity securities, fixed-income securities and short-term securities. Recent declines in equity markets and interest rates have had a negative impact on the funded status of our pension plans. As of December 31, 2002, the projected benefit obligation under our pension plans exceeded the plans’ fair value of assets by $208.2 million, based on a discount rate of 6.75%. If long-term interest rates remain at or decline from current levels, we would be required to value our pension liabilities using a discount rate which would be lower than the 6.75% discount rate used at December 31, 2002 and, as a result, we would be required to record an additional minimum pension liability adjustment. Similarly, if the actual value of our plan assets were to deteriorate from their current levels, we may be required to make a liability adjustment. In either case, the liability would be recorded as a reduction to shareholders’ equity, after tax. The equity would be restored to the balance sheet in future periods only if the fair value of plan assets exceeded the accumulated benefit obligation. We estimate that a 0.25% decrease in discount rate or a 1% decrease in actual asset return would have had a negative impact on our funded status as of December 31, 2002 of $34.4 million and $5.7 million, respectively. Further, while actual changes in shareholders’ equity depend upon a number of variables and other assumptions, we estimate that a 0.25% decrease in discount rates and a 1% decrease in actual asset return would result in a reduction to shareholders’ equity, net of tax, of $17.9 million and $4.0 million, respectively, at December 31, 2003.

The declines in equity markets and interest rates in recent years have also resulted in increased pension expense during prior periods. We decreased our assumed rate of return on pension plan assets during 2002 from 10% to 9%. This assumption change resulted in an increase in 2002 pension expense of $5.3 million. During 2002, actual asset returns for our pension plans were adversely affected by deterioration in the equity markets, and the actual return on plan assets in 2002 was negative 10%. Our 2003 assumed rate of return on plan assets is 8%. Our pension expense in 2002 was $26.1 million, while 2003 pension expense is expected to be $30.4 million. We estimate that a 0.25% decrease in discount rate or a 1% decrease in our assumed asset return would result in an increase in expected 2004 pension expense of $5.0 million and $7.2 million, respectively. Further, since asset related gains and losses are recognized over a five year period, prior period reductions in the value of plan assets may continue to have an impact on pension expense in future periods.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Pension Plans” and note 8 to our audited consolidated financial statements included elsewhere in this prospectus for additional information regarding our pension plans.

An increase in the cost of healthcare benefits could have a negative impact on our profitability.

We sponsor health insurance for employees, retirees and their dependents through Health Maintenance Organizations, or HMOs, and Preferred Provider Organizations, or PPOs, and offer a competitive healthcare program to attract and retain our employees. These benefits comprise a significant portion of our operating expenses. It is possible that healthcare costs could become increasingly cost prohibitive, either forcing us to make changes to our benefits program or negatively impacting our future profitability.

Companies in the industry in which we operate are exposed to claims related to cargo loss and damage, property damage, personal injury and workers’ compensation. We currently self-insure for a portion of our claims exposure resulting from these risks, ranging from $250,000 for general liability to $5.0 million per claim for automobile liability. If the number or severity of claims for which we are self-insured increases, our operating results could be adversely affected. We also maintain insurance with third party insurance carriers above the amounts for which we self-insure. However, insurance carriers have recently begun to raise premiums for many transportation companies. If our insurance carriers were to increase our premiums, we would be required to either absorb the increase in premium costs and/or raise our self-insured retention, which could significantly increase our insurance and claims expense.

In addition, both our insurance carriers and the states in which we operate require us to post either letters of credit or surety bonds to collateralize our self-insured retention. If our insurance carriers or the states in which we operate require us to increase the amount of collateral we provide in the future, we could face increased costs, including the payment of additional fees to the providers of letters of credit and surety bonds. Further, the market for surety bonds has recently begun to deteriorate, and carriers are facing difficulties in obtaining surety bonds, which we primarily use to collateralize our state workers’ compensation self-insurance. If we were to face difficulties in obtaining surety bonds, we would be required to provide letters of credit, which will increase the costs we incur to collateralize our self-insured retention. In addition, since our letters of credit will generally be considered as debt under the financial covenants for our financing arrangements, increases in the amount of letters of credit we have outstanding to collateralize our self-insurance obligations will reduce our capacity for additional borrowings.

Since 1986, we have been a wholly owned subsidiary of Union Pacific. Although we have operated as a separate business, distinct from Union Pacific’s other activities, we have relied on Union Pacific for certain support functions, as well as financial support. We currently estimate that we will incur approximately $9.1 million per year of incremental operating expenses as a result of being a stand-alone public company. These stand-alone costs are estimates, and actual incremental expenses could be materially different from these estimates. In addition, we will no longer receive interest income from Union Pacific, which accounted for $19.1 million of interest income in 2002, and we will be required to incur interest expense in respect of our initial borrowings under our new bank credit facility. Furthermore, we have historically funded our working capital and capital expenditures from cash flow from operations. Following this offering, in the event our cash flow is not sufficient to fund our operations and capital expenditures, we may be required to incur third-party indebtedness, including indebtedness under our new bank credit facility, as we will no longer be able to rely on Union Pacific for funding or credit support in such an event. Accordingly, we may incur additional indebtedness, interest expense and financing fees in the future. As a result of these factors, investors should not rely on our historical income and cash flows as necessarily indicative of the income and cash flows that we might have had if we had been operating as an independent company during those periods. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Effects of Separation from Union Pacific and this Offering” and “—Liquidity and Capital Resources” and the unaudited pro forma consolidated financial statements included elsewhere in this prospectus.

In addition, following this offering and our separation from Union Pacific, we will be required to relocate our St. Louis data center, which contains a significant portion of our core business applications and is operated and managed by Union Pacific, to our Richmond data center. The costs of this transition, which will include costs associated with upgrading our systems in Richmond, purchasing system software and obtaining third party software licenses, are expected to represent approximately $6 million. We anticipate incurring most of these costs in 2004.

As described above, we will face increased operating expenses as a stand-alone entity. A significant portion of this increase will result from the incurrence of additional insurance and workers’ compensation expenses. Union Pacific currently administers an insurance program for workers’ compensation and public liability claims for its corporate entities, including us. Under the program, Union Pacific has provided indemnities, insurance guarantees, letters of credit and surety bonds to states and insurance companies for the performance of our obligations under these claims. Following this offering, we will no longer be affiliated with Union Pacific, and Union Pacific will no longer provide such indemnities, guarantees, letters of credit or surety bonds for our benefit under this program. As a stand-alone company, we will be required to obtain new insurance policies and reapply as a self-insurer in several of the states in which we operate. As a result, insurance carriers and those states will reevaluate our creditworthiness on a stand-alone basis, and the amount of collateral that we must post to secure our self-insurance exposure will likely increase. Accordingly, we will face increased expenditures to provide our own indemnities, guarantees, letters of credit and surety bonds. In addition, we will be required to obtain insurance for our directors and officers. Of the $9.1 million of increased operating expenses we estimate we will incur as a stand-alone entity, we estimate that expenses for insurance and workers’ compensation will account for approximately $4.5 million each year. Further, if any state were to reject our application to act as a workers compensation self-insurer and we were unable to obtain workers compensation insurance from an insurance company, we would be prohibited from operating in that state and our operations would be materially adversely affected.

If our relationship with our employees were to deteriorate, we could be adversely affected.

Currently, the Teamsters union represents approximately 3% of our 12,600 Overnite Transportation employees at four service centers. Employees at two of our Motor Cargo service centers located in North Salt Lake, Utah and Reno, Nevada, representing approximately 11% of the total Motor Cargo work force at 34 service centers, are covered by two separate collective bargaining agreements with unions affiliated with the Teamsters. On October 24, 2002, the Teamsters ended a three-year nationwide strike of Overnite Transportation, our principal business unit. While the Teamsters ended their strike without obtaining a contract or any concessions from us, the strike did cause us to incur significant expenditures for the protection of our employees and property, and diverted the time and attention of our management from our normal operations. Although we focus on maintaining a productive relationship with our employees, we cannot ensure that we will not in the future be subject to work stoppages, strikes or other types of conflicts with our employees or organized labor. Any such event could have a material adverse effect on our ability to operate our business and serve our customers and could materially impair our relationships with key customers and suppliers. Accordingly, any future labor conflict could have a material adverse effect on our business, results of operations and financial condition.

At the height of the Teamsters’ campaign to unionize Overnite Transportation employees, the Teamsters had petitioned to gain representation rights at over 60 of Overnite Transportation’s 170 service centers, and they ultimately gained certified representation rights at 26 of these service centers. Since July 2002, the Teamsters have been decertified as collective bargaining representatives at 22 of these service centers. Except in one case where the Teamsters disclaimed representation rights, the decertifications were the result of elections initiated by our employees. As a result of the decertifications and the successful resolution of the Teamsters’ strike, the Teamsters’ campaign to organize the employees of Overnite Transportation has become almost entirely dormant.

However, there can be no assurance that our employees will continue the current trend of union decertification at the Overnite Transportation service centers or that the Teamsters will not renew their efforts to organize our employees. If our employees do not continue to decertify the Teamsters or the Teamsters renew their organization efforts, we would likely face significant costs, which would divert resources that we would otherwise use to focus on executing our business strategy. In addition, if the Teamsters were successful in organizing our employees in the future, our flexibility in dealing with our workforce could be significantly hampered, and we could be subject to the potential of increases in labor, benefits and other similar costs. Any of these factors could have an adverse effect on our business, results of operations and financial condition.

Our business requires substantial ongoing capital investment, particularly for tractors, trailers, service centers and technology. Our capital expenditures in 2002 were $64.6 million, excluding an additional $1.0 million for operating lease commitments, and we expect to make capital expenditures of approximately $58.0 million in 2003, excluding approximately $2.0 million for operating lease commitments. We expect that operating leases, the revolving credit facility under our new bank credit facility, secured equipment financing and cash flow from operations will be our primary sources of financing for capital expenditures. If we are unable to enter into leases, raise sufficient capital, borrow sufficient funds on terms that are acceptable to us or generate sufficient cash from operations to finance our capital expenditures, we may be forced to limit our growth and operate existing equipment for significant periods of time, each of which could have a material adverse effect on our business, results of operations and financial condition.

We may be adversely impacted by fluctuations in the price and availability of fuel.

In 2002, fuel (excluding fuel taxes) represented approximately 4% of our total operating costs. The market price for fuel can be extremely volatile and can be affected by a number of economic and political factors. In particular, reduced oil production as a result of the war in Iraq, the continued deterioration of the political climate in the Middle East and certain parts of Africa and the instability of oil production in Venezuela have contributed to significant increases in fuel prices. In addition, changes in Federal or state regulations can impact the price of fuel, as well as increase the amount we pay in fuel taxes. When fuel costs exceed specific levels, we seek to charge a portion of the higher cost to our customers as a fuel surcharge. While we have historically been able to offset significant increases in fuel prices through fuel surcharges, we cannot be certain that we will be able to do so in the future. If fuel prices increase and we are unable to pass the increased cost to our customers, the additional expense could have a material adverse effect on our business, results of operations and financial condition.

The fuel surcharges we negotiate with our customers only apply when our fuel costs exceed specified levels. Further, these fuel surcharges are customarily limited by caps on the amounts required to be paid by our customers. Accordingly, in order to protect against fluctuations in fuel prices that are not covered by fuel surcharges, we frequently enter into fuel hedging arrangements. In the event we are not hedged, we are at risk to the extent that changes in the market price of fuel are not covered by our negotiated fuel surcharge arrangements. Alternatively, while the use of fuel hedging arrangements may provide us with protection from adverse fluctuations in fuel prices, by utilizing these arrangements we potentially forgo the benefits that might result from favorable fluctuations in fuel prices or, in some cases, we may incur hedging losses. We have not hedged any of our remaining forecasted fuel consumption for 2003.

Our operations may also be adversely affected by any limit in the availability of fuel. Continued disruptions in the political climate in key oil producing regions in the world, particularly in the event of wars or other armed conflicts, could severely limit the availability of fuel in North America. In the event we face significant difficulty in obtaining fuel, our business, results of operations and financial condition would be materially adversely affected.

If we were to lose one or more of our key customers, our business may be adversely affected.

Our top 20 customers accounted for approximately 25% of our operating revenue in 2002. If we were to lose one or more of our key customers, we might not be able to capture additional volume from other customers to offset the fixed costs historically covered by the loss of revenue. Further, the loss in volume from one or more significant customers could adversely affect our density in a particular region or lane, which would adversely affect our profitability until we could generate additional volumes or until we could adjust our costs to the lower level of volume. Accordingly, the loss of one or more significant customers could have a material adverse effect on our results of operations and financial condition. Specifically, the loss of a significant customer contributed to the $5.9 million decrease in our dedicated truckload operating revenue in 2001 as compared to 2000.

If we lose key members of our senior management, our business may be adversely affected.

We believe that the success of our business strategy depends upon the continued employment of our senior management team. If one or more members of our senior management team become unable or unwilling to continue in their present positions, our business could be adversely affected.

Investment in new equipment is a significant part of our annual capital expenditures. We may face difficulty in purchasing new equipment on a timely basis. Any delay in receiving equipment from our anticipated sources could require us to seek equipment from alternative sources at increased prices. In addition, a number of tractor manufacturers have begun to raise the prices of new equipment, particularly in response to new government-imposed emissions standards on diesel engines that went into effect in October 2002. Any delay in receiving equipment could impair our ability to serve our customers or could result in a significant increase in our anticipated capital expenditures and, accordingly, have a material adverse effect on our business, results of operations and financial condition.

We rely on purchased transportation, making us vulnerable to increases in costs of these services.

We use purchased transportation, primarily intermodal rail and contract linehaul from truckload carriers, to handle lane imbalances and to expand capacity to accommodate surges in business. We will move trailer loads in one direction using purchased intermodal rail service or contract carriage in situations when scheduling one of our drivers to move the load would result in the driver returning with empty trailers. We will also, on occasion, augment our linehaul capacity during certain peak periods through the use of purchased transportation. In addition, in our assembly and distribution service, we frequently contract with third party truckload carriers to transport customer shipments we have consolidated for long-haul shipping. A reduction in the availability of purchased transportation may require us to incur increased costs to satisfy customer shipping orders. We may be unable to pass along increases in third party shipping prices to our customers. Any of these factors could have an adverse effect on our profitability and our results of operations.

Competition for qualified drivers can be intense within the transportation industry, and periodically the trucking industry has suffered from a shortage of drivers. We believe that this issue has primarily affected truckload carriers. Recently, we have not experienced problems hiring a sufficient number of qualified drivers. However, there can be no assurance that we will not experience a shortage of drivers in the future, particularly in regions such as the Northeast, which have very competitive labor markets. Any shortage in drivers could result in temporary under-utilization of our equipment, difficulty in meeting our customers’ demands and increased compensation levels, each of which could have a material adverse effect on our business, results of operations and financial condition.

We operate in a highly regulated industry and costs of compliance with, or liability for violations of, existing or future regulations can be significant.

We are regulated by the Federal Motor Carrier Safety Administration and the Surface Transportation Board, independent agencies within the U.S. Department of Transportation, or DOT, and by various Federal and state agencies. These regulatory authorities have broad powers, generally covering matters such as the authority to engage in motor carrier operations, hours of service, safety, consolidations and acquisitions and periodic financial reporting. Our industry is also subject to regulatory and legislative changes, such as increasingly stringent environmental and occupational safety and health regulations or limits on vehicle weight and size, security and ergonomics. Compliance with current and future regulations could substantially impair equipment productivity, require changes in our operating practices, negatively affect the level of service we provide our customers and increase our costs. In addition, violations of regulations can subject us to fines and penalties, and significant or repeated violations could result in governmental action to curtail or suspend our operations. See “Business—Regulation” for a more complete discussion of the regulations that affect our business.

We are subject to various Federal, state and local environmental laws and regulations that address, among other things, the transportation, management and disposal of hazardous materials, discharge of stormwater, facility and vehicle emissions into the atmosphere and underground and aboveground fuel storage tanks. Under specific environmental laws, we can be held responsible for any costs relating to contamination at our past or present facilities and at third party waste disposal sites, including cleanup costs, fines and penalties, and personal injury and property damages. Under some of these laws, liability for the entire cost of the cleanup of contaminated sites can be imposed upon any current or former owner or operator, or upon any party who sent waste to the site, regardless of the lawfulness of the activities that led to the contamination. We cannot assure you that our costs of complying with current or future environmental laws or liabilities arising under such laws will not have a material adverse affect on our business, results of operations or financial condition.

The U.S. Environmental Protection Agency, or EPA, has issued regulations that require progressive reductions in exhaust emissions from certain diesel engines through 2007. New emissions standards under the regulations and a judicial consent decree went into effect for certain engines beginning in October 2002. In addition, the regulations require subsequent reductions in the sulfur content of diesel fuel beginning in June 2006 and the introduction of emissions after-treatment devices on newly-manufactured engines and vehicles beginning with the model year 2007. Each of these requirements could result in higher prices for tractors and diesel engines and increased fuel and maintenance costs. These adverse effects, combined with the uncertainty as to the reliability of the vehicles equipped with newly-designed diesel engines and the residual values that will be realized from the disposition of these vehicles, could increase our costs and have a material adverse effect on our business, results of operations and financial condition.

Our business may be affected by seasonal factors and harsh weather conditions.

Our business is subject to seasonal trends common in the trucking industry. We typically face reduced demand for shipping services during the winter months. Further, freight shipments, operating costs and earnings are generally adversely affected by inclement weather conditions. These factors generally result in lower operating results during the first and fourth quarters of the year. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Seasonality.”

Our reputation and financial results could be harmed in the event of accidents or incidents.

We are exposed to liabilities that are unique to the services we provide. Such liabilities may relate to an accident or incident involving one of our trucks, and could involve significant potential claims of injured employees and other third parties. The amount of our insurance coverage may not be adequate to cover potential claims or liabilities and we may be forced to bear substantial costs due to one or more accidents. Substantial

claims resulting from an accident in excess of our related insurance coverage would harm our financial condition and operating results. Moreover, any accident or incident involving us, even if we are fully insured or not held to be liable, could negatively affect our reputation among customers and the public, thereby making it more difficult for us to compete effectively, and could significantly affect the cost and availability of insurance in the future.

In the aftermath of the September 11, 2001 terrorist attacks on the United States, Federal, state and municipal authorities have implemented and are continuing to implement various security measures, including checkpoints and travel restrictions on large trucks. New DOT measures, which became effective on March 25, 2003, impose additional security planning and training obligations on shippers of hazardous materials. We have developed a security plan, including the training required under these new measures, which will be put in place on or before the dates specified in these measures. However, if additional new security measures disrupt or impede the timing of our deliveries, we may fail to meet the needs of our customers or may incur increased expenses to do so. We cannot assure you that these measures will not have a material adverse effect on our operating results.

Our board of directors currently intends to pay regular quarterly dividends on our common stock at an initial annual rate of $ per share. The declaration of dividends is subject to the discretion of our board of directors and will depend upon various factors, including our net income, financial condition, cash requirements, future prospects and any other factors deemed relevant by our board of directors. See “Dividend Policy.”

Future sales of our common stock in the public market could lower our stock price.

We may sell additional shares of common stock in subsequent public offerings. We may also issue additional shares of common stock to finance future acquisitions. Upon completion of the Acquisition and this offering, assuming that the underwriters do not exercise their over-allotment option, shares of our common stock will be owned by Union Pacific. We will be party to a registration rights agreement with Union Pacific that will provide Union Pacific with the right to require us to effect the registration of its shares. In addition, if we propose to register any of our shares of common stock under the Securities Act, whether for our own account or otherwise, Union Pacific will be entitled to include its shares of common stock in that registration. Prior to this offering, Union Pacific will have agreed with the underwriters to a “lock-up” period, meaning that Union Pacific may not, other than with respect to shares that it may sell in this offering, sell any of its existing shares of our common stock or exercise any registration rights without the prior written consent of Credit Suisse First Boston LLC and Morgan Stanley & Co. Incorporated until 180 days after the date of this prospectus. We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock.

We will not receive any of the proceeds from the sale of shares by the selling shareholder. Union Pacific, the selling shareholder, will receive all net proceeds from the sale of the shares of our common stock in this offering. Accordingly, the proceeds from this offering will not be available to us to finance our operations, capital expenditures or investment activities.

The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.

Volatility in the market price of our common stock may prevent you from being able to sell your shares at or above the price you paid for your shares. The market price of our common stock could fluctuate significantly for various reasons which include:

In addition, in recent years, the stock market has experienced extreme price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our industry. The changes frequently appear to occur without regard to the operating performance of these companies. The price of our common stock could fluctuate based upon factors that have little or nothing to do with our company, and these fluctuations could materially reduce our stock price.

Certain provisions of Virginia law, our articles of incorporation and bylaws make a takeover by a third party difficult.

Certain provisions of Virginia law, the state in which we are incorporated, and our articles of incorporation and bylaws could hamper a third party’s acquisition of us, or discourage a third party from attempting to acquire control of us. These provisions include:

These provisions could also limit the price that certain investors might be willing to pay in the future for shares of our common stock. See “Description of Capital Stock.”

There is no existing market for our common stock, and we do not know if one will develop to provide you with adequate liquidity.

There has not been a public market for our common stock. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on The Nasdaq National Market or otherwise or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the shares will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price paid by you in this offering.

This prospectus contains “forward-looking statements,” which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources. These forward-looking statements include, without limitation, statements regarding: expectations as to operational improvements; expectations as to cost savings, revenue growth and earnings; the time by which certain objectives will be achieved; estimates of costs relating to environmental remediation and restoration; proposed new products and services; expectations that claims, lawsuits, environmental costs, commitments, contingent liabilities, labor negotiations or agreements, or other matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; and statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar expressions, as well as statements in future tense, identify forward-looking statements.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Important factors that could cause such differences include, but are not limited to: whether we are fully successful in implementing our financial and operational initiatives; industry competition, conditions, performance and consolidation; legislative and/or regulatory developments; the effects of adverse general economic conditions, both within the United States and globally; any adverse economic or operational repercussions from recent terrorist activities, any government response thereto and any future terrorist activities, war or other armed conflicts; changes in fuel prices; changes in labor costs; labor stoppages; the outcome of claims and litigation; natural events such as severe weather, floods and earthquakes; and other factors described under “Risk Factors.”

Forward-looking statements speak only as of the date the statements are made. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect thereto or with respect to other forward-looking statements.

Our board of directors currently intends to pay regular quarterly dividends on our common stock at an initial annual rate of $ per share. The first dividend is expected to be declared during the quarter of and be payable in . The declaration of dividends is subject to the discretion of our board of directors and will depend upon various factors, including our net income, financial condition, cash requirements, future prospects and other factors deemed relevant by our board of directors.

The following table sets forth our cash, short-term debt and capitalization as of March 31, 2003:

The following table should be read in conjunction with “Selected Historical Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Capital Stock” and our consolidated financial statements and unaudited pro forma consolidated financial statements included elsewhere in this prospectus.

The following table sets forth our selected historical consolidated financial and operating data as of the dates and for the periods indicated. You should read this data together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements included elsewhere in this prospectus. The selected historical consolidated statement of income data for each of the years in the three year period ended December 31, 2002 and historical consolidated balance sheet data as of December 31, 2001 and 2002 has been derived from our audited consolidated financial statements which are included elsewhere in this prospectus. The selected historical consolidated statement of income data for the years ended December 1998 and 1999 and historical consolidated balance sheet data as of December 31, 1998, 1999 and 2000 has been derived from our unaudited consolidated financial statements not included in this prospectus. The summary historical consolidated statement of income data for the three months ended March 31, 2002 and 2003 and the summary consolidated balance sheet data as of March 31, 2002 and 2003 has been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. In our opinion, the unaudited consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and, in our opinion, include all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information set forth therein. The results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

The following discussion and analysis should be read in conjunction with our consolidated financial statements included elsewhere in this prospectus, as well as the information under the caption “Selected Historical Financial Data.” This discussion contains forward-looking statements that are based on management’s current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those described under the caption “Risk Factors” and elsewhere in this prospectus.

We are a leading, predominantly non-union provider of LTL transportation services, offering a full spectrum of regional, inter-regional and long-haul LTL services nationwide. In addition to our core LTL service, we also provide our customers with a number of additional value-added LTL services, including expedited and guaranteed delivery, cross-border, assembly and distribution, trade show, government and third party logistics services. Our LTL services (including fuel surcharges associated with these services) accounted for approximately 92% of our operating revenue in 2002. We also provide customers with full truckload service, which includes both premium-service dedicated truckload transportation in select markets, as well as truckload delivery on our backhaul lanes. Our truckload services (including fuel surcharges associated with these services) accounted for approximately 8% of our operating revenue in 2002. We serve a diverse customer base through a network of 204 service centers located near metropolitan centers. We draw customers from varying industries and geographic markets, including customers in the retail, chemical, automotive, electronics and furniture industries.

Overnite Transportation was founded in 1935, became a public company in 1957 and was acquired by Union Pacific in 1986. We currently provide our services under two established brand names: Overnite Transportation and Motor Cargo. Overnite Transportation, our primary carrier brand, is a leading nationwide regional, inter-regional and long-haul LTL carrier. Motor Cargo, which was acquired in November 2001, is a leading regional LTL transportation provider, primarily serving the western United States, including Alaska and Hawaii, as well as select markets in Canada. We compete with regional, inter-regional and long-haul LTL carriers and, to a lesser extent, with truckload carriers, railroads and overnight delivery companies. Our major competitors within the LTL industry include Arkansas Best Corporation, CNF, Inc., FedEx Freight, Old Dominion Freight Line, Inc., Roadway Corporation, USFreightways and Yellow Corporation.

After strong growth throughout the 1990s, the LTL trucking industry began experiencing lower demand for transportation services during the second quarter of 2001, and demand continued to decline after the September 11, 2001 terrorist attacks and the resulting economic uncertainty. In addition, LTL transportation service providers began facing increased costs during 2001, particularly due to liability insurance and health insurance. During this period, we continued to implement our long-term strategy for growth through improved service, cost control and yield improvement. We enhanced the quality of our services and announced reduced transit times by one day or more on over 3,100 of the 58,564 lanes served by Overnite Transportation in 2001. We also completed the expansion of our Columbus, Ohio service center and built a new service center in Raleigh, North Carolina. In addition, during 2001, we replaced a portion of our fleet by placing in service 432 tractors and 608 trailers. On November 30, 2001, Motor Cargo was acquired, providing us with an established regional service base and extended coverage in the western United States.

In 2002, we continued to focus on supplementing our regional LTL service with premium long-haul capability. In addition, we significantly enhanced the quality of our service product, reducing transit times by one day or more on over 4,800 of the 55,696 lanes served by Overnite Transportation. Motor Cargo served 2,025 lanes in 2002. In 2002, we upgraded our fleet with the acquisition of 539 tractors and 1,452 trailers. The LTL trucking industry continued to experience pressures of higher costs for liability insurance and health insurance during 2002, while the general economy recovered marginally as compared to the prior year.

During the third quarter of 2002, Consolidated Freightways Corporation, which at the time was the third largest LTL carrier in the United States with approximately $2.2 billion in consolidated revenue for the year ended December 31, 2001, declared bankruptcy and ceased operations. The closure of Consolidated Freightways, which was primarily a long-haul carrier, provided opportunities for us to capture additional sales from former Consolidated Freightways customers. We estimate that revenue from former Consolidated Freightways customers amounted to $20 million during the first four months after the bankruptcy.

During 2002, we were also able to resolve a number of key labor issues. On October 24, 2002, the Teamsters discontinued a three-year nationwide strike of Overnite Transportation without obtaining any contract or concessions from us. Commencing in July 2002, Overnite Transportation employees began to decertify the Teamsters as their collective bargaining representatives at Overnite Transportation service centers. This decertification process has resulted in the Teamsters losing representation rights at 22 of the 26 Overnite Transportation service centers where they had previously gained certified representation rights. As a result of the successful resolution of the Teamsters’ strike and the decertifications, the Teamsters’ campaign to organize the employees of Overnite Transportation has become almost entirely dormant. While we were able to achieve positive results during this period, both the Teamsters’ organizing efforts and the strike significantly limited our growth opportunities by hindering our operating efficiency and generating customer concerns about labor strife and its possible impact on service reliability. With the strike and the Teamsters’ organizing efforts largely resolved, we will now be able to increase our focus on enhancing customer relationships, generating new sales and improving the quality and efficiency of our services. Currently, the Teamsters represent approximately 3% of Overnite Transportation employees and 11% of Motor Cargo employees. However, these employees are not subject to the terms of the National Master Freight Agreement, which was entered into by the Teamsters and a number of national LTL carriers in 2003.

We derive our operating revenue from: (1) LTL service; (2) truckload service; and (3) fuel surcharges. Our core LTL service consists of shipments under 10,000 pounds. We supplement our core LTL service by offering additional value-added LTL services, such as expedited and guaranteed delivery, cross-border, assembly and distribution, trade show, government and third party logistics services. Operating revenue for our LTL service varies depending upon the weight hauled during the period and our average revenue per hundredweight for the period. Revenue per hundredweight, which is sometimes referred to as “LTL rate factor,” will vary for each shipment based upon the commodities shipped, the weight of the shipment, the distance goods are transported and the type of service performed.

Our truckload service consists of shipments over 10,000 pounds and includes truckload shipments carried on our backhaul lanes as well as our dedicated truckload service. As with our operating revenue for our LTL service, our operating revenue for backhaul truckload service varies depending upon weight hauled and revenue per hundredweight. However, the pricing for truckload service is different than the pricing for our LTL services and, accordingly, is not included in our LTL rate factor. Through our dedicated truckload service, provided by the Special Services Division of Overnite Transportation, we offer dedicated truckload transportation to customers on a contractual basis in select markets. Operating revenue for dedicated truckload service is generated primarily on the basis of routes and mileage rather than weight transported. As the factors affecting the revenue generated by our dedicated truckload service differ from those that affect our LTL service revenue, we also do not include dedicated truckload revenue in our LTL rate factor.

The majority of our service contracts with customers provide for fuel surcharges. When fuel costs exceed our planned levels, we charge a portion of the higher costs to our customers through these surcharges. We record these fuel surcharges as operating revenue.

Operating expenses consist of (1) salaries, wages and employee benefits, (2) supplies and expenses, (3) operating taxes, (4) claims and insurance, (5) rents and purchased transportation, (6) communication and utilities, (7) depreciation and (8) other expenses. The following sets forth the components of these expenses:

Historically, we have evaluated our performance, including comparisons to competitors in our industry, by reference to our “operating ratio.” Operating ratio is calculated by dividing operating expense by operating revenue, expressed as a percentage of operating revenue.

Other income and expense items consist of intercompany interest income, interest expense, income tax expense and minor non-operating items. Intercompany interest is earned at an annual rate of 7.5% calculated based on the monthly balance of net advances to Union Pacific. Our intercompany balance represents the accumulated cash deposited with Union Pacific in excess of operating and capital investment cash requirements.

On November 30, 2001, Union Pacific acquired 99.7% of the outstanding capital stock of Motor Cargo. The acquisition of Motor Cargo was completed on February 14, 2002, at which time the remaining 0.3% of outstanding capital stock of Motor Cargo was acquired. Immediately following the acquisition, Union Pacific transferred Motor Cargo to us as a wholly owned subsidiary. The purchase price of $90.5 million included the assumption of $14.5 million in current liabilities, $6.7 million in deferred tax liability and $1.0 million in other debt. Fair value adjustments increased the recorded value of land by $6.7 million and buildings and improvements by $4.1 million. Fair value adjustments increased the recorded value of Motor Cargo pension obligations by $1.7 million and deferred tax liabilities by $4.9 million. The preliminary estimate of goodwill as of December 31, 2001 of $13.9 million was adjusted to $13.2 million as of December 31, 2002 as information relating to the fair value of assets and liabilities was determined with the assistance of independent appraisers and actuaries. An indefinitely-lived intangible asset for the Motor Cargo brand name in the amount of $3.0 million was recognized as part of the acquisition.

As of December 31, 2002, Motor Cargo operated 34 service center facilities in the western United States and had 1,826 full time and part time employees. Motor Cargo employees at facilities located in Reno, Nevada and Salt Lake City, Utah are represented by the Teamsters, with current contracts terminating on December 1, 2003 and December 1, 2005, respectively. Although the contracts cover most of the employees at these two

facilities, less than half of these covered employees are union members. The two agreements exclude any pension requirements and only the Reno contract requires employees to be included in union supported healthcare coverage.

For the year ended December 31, 2002, Motor Cargo had operating revenue of $143.6 million and operating expenses of $133.6 million, resulting in operating income of $10.0 million and an operating ratio of 93.1%. We intend to operate Motor Cargo separately from Overnite Transportation and maintain its separate corporate and marketing identity, although the sales force of each company sells the capabilities and services of the combined entity. There are no current plans to merge any of the operating facilities or integrate any of the operating employees of Overnite Transportation and Motor Cargo, but over time, there may be some efficiencies realized from combining some administrative functions. Accordingly, we currently report our financial results in two segments: Overnite Transportation and Motor Cargo.

Since 1986, we have been a wholly owned subsidiary of Union Pacific. Although we have operated as a separate business, distinct from Union Pacific’s other activities, we have relied on Union Pacific for certain support functions, as well as financial support. Following the Acquisition and this offering, which will effect our separation from Union Pacific, we will no longer receive interest income from Union Pacific, which accounted for $19.1 million of interest income in 2002, and we expect to incur certain costs in connection with operating as a stand-alone company that will exceed the costs that are currently incurred or are charged to us by Union Pacific. We currently estimate that we will incur approximately $9.1 million per year of incremental operating expenses as a result of becoming a stand-alone public company. These stand-alone costs include certain administrative costs for services currently performed for us by Union Pacific, such as cash management, internal audit and information technology, as well as other incremental costs we will incur, including SEC compliance, insurance, corporate secretary, shareholder relations, government relations and non-employee director costs. In addition, we will incur indebtedness under our new bank credit facility in order to make a payment to Union Pacific in connection with the Acquisition, and we may incur future indebtedness as may be necessary to finance working capital, capital expenditures, other general corporate purposes and to support letters of credit. As a result of these factors, our historical consolidated financial statements may not be indicative of the financial position and results of operations that we would have attained if we had been an independent stand-alone company as of the end of or during the periods presented or that may occur in the future. See “Risk Factors—Risks Related to Our Business—We will face increased expenses as a stand-alone company,” “The Acquisition” and the unaudited pro forma consolidated financial statements included elsewhere in this prospectus.

Currently, our employees participate in various Union Pacific incentive and retention stock plans and our historical results of operations include the expense associated with these plans. These plans are subject to various vesting and service requirements. Immediately prior to the Acquisition and this offering, Union Pacific will waive the vesting and employment requirements under certain of these plans for our employees. As a result, one-time costs of approximately $ will be recorded by us in the period in which this offering is consummated. These one-time costs have not been reflected in the adjustments in the unaudited pro forma consolidated financial statements included elsewhere in this prospectus and will not have a continuing effect on our financial results in future periods, except for the one-time charge associated with these costs. In addition, we intend to adopt an incentive compensation plan. The expenses associated with this plan for future periods are not calculable at this time, and will not be calculable until grants or awards are made under the plan, but we do not expect these expenses to be materially different from the expenses we incur with respect to the current Union Pacific plans.

amount of approximately 260,000 shares of our common stock to these employees. This award will result in one-time costs of $ , which will be recorded in the period in which the awards are made. These one-time costs have not been included in the adjustments in the unaudited pro forma consolidated financial statements included elsewhere in this prospectus and will not have a continuing effect on our financial results in future periods, except for the one-time charge associated with these costs.

The following table sets forth certain statement of income data expressed as a percentage of operating revenue. Our results of operations for 2001 include Motor Cargo’s operating results from November 30, 2001 to December 31, 2001. Our results of operations for 2002 include the full year impact of Motor Cargo.

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

Operating Revenue. Operating revenue was $341.2 million in the first three months of 2003, an increase of $32.4 million, or 10.5%, from $308.8 million in the first three months of 2002. This increase resulted primarily from an increase in volume. Tonnage shipped was 2,341.1 million pounds during the first three months of 2003, an increase of 125.5 million pounds, or 5.7%, from 2,215.6 million pounds shipped during the first three months of 2002. Our LTL rate factor excluding fuel surcharge was $14.12 during the first three months of 2003, an increase of 1.9% from $13.85 during the first three months of 2002. Operating revenue from fuel surcharges was $11.4 million during the first three months of 2003, an increase of $7.9 million, or 220.9%, from $3.5 million during the first three months of 2002, as a result of increased fuel costs in the current year period from $0.64 per gallon in the first three months of 2002 to $1.02 in the first three months of 2003.

Operating revenue at Overnite Transportation was $305.3 million in the first three months of 2003, an increase of $28.5 million, or 10.3%, from $276.8 million in the first three months of 2002. LTL operating revenue was $271.0 million in the first three months of 2003, an increase of $18.3 million, or 7.2%, from

$252.7 million in the comparable period of 2002. This increase resulted primarily from a 4.8% increase in LTL volume from 1,804 million pounds in the first three months of 2002 to 1,890 million pounds in 2003. The LTL rate factor excluding fuel surcharges increased by 2.3% between the two periods. In addition, our dedicated truckload and truckload services generated operating revenue of $24.0 million in the first three months of 2003, an increase of $3.1 million, or 14.8%, from $20.9 million in the comparable period of 2002, as the number of shipments of our dedicated truckload service increased 39.9% in the first three months of 2003 compared to the comparable period of 2002, as a result of the addition of a significant customer that elected to outsource the management of its private fleet with us. Operating revenue from fuel surcharges at Overnite Transportation was $10.3 million in the first three months of 2003, an increase of $7.1 million, or 221.9%, from $3.2 million in the comparable period of 2002, due to higher fuel prices.

Operating revenue at Motor Cargo was $35.9 million in the first three months of 2003, an increase of $3.9 million, or 12.2%, from $32.0 million in the first three months of 2002. This increase in operating revenue was primarily the result of a 9.8% increase in volume as compared to the comparable period of 2002.

Operating Expenses. Operating expenses were $328.6 million in the first three months of 2003, an increase of $30.3 million, or 10.1%, from $298.3 million in the comparable period of 2002. Operating expenses at Overnite Transportation were $293.8 million for the first three months of 2003, an increase of $26.3 million, or 9.8%, from $267.5 million in the comparable period of 2002. Operating expenses at Motor Cargo were $34.8 million for the first three months of 2003, an increase of $4.0 million, or 13.0%, from $30.8 million in the comparable period of 2002.

Salaries, wages and employee benefits were $207.9 million in the first three months of 2003, an increase of $15.7 million, or 8.2%, from $192.2 million in the comparable period of 2002. Salaries, wages and employee benefits as a percentage of operating revenue decreased to 60.9% in the first three months of 2003 from 62.2% in the comparable period of 2002. Salaries and wages were $145.2 million in the first three months of 2003, an increase of $9.2 million, or 6.8%, from $136.0 million in the comparable period of 2002. The increase in salaries and wages was due to wage inflation and the effect of a 3.6% increase in the average number of employees over the period. Employee benefits were $62.7 million in the first three months of 2003, an increase of $6.5 million, or 11.6%, from $56.2 million in the comparable period of 2002. Employee benefit expenses were primarily affected by pension and healthcare cost increases. Expenses related to pension (and other postretirement benefits) were $10.5 million in the first three months of 2003, an increase of $4.0 million, or 61.5%, from $6.5 million in the comparable period of 2002. This increase was primarily attributable to the lower than expected returns on pension assets and declines in interest rates. In addition, the cost of healthcare benefits for active employees was $18.1 million in the first three months of 2003, an increase of $1.0 million, or 5.8%, from $17.1 million in the comparable period of 2002. Other employee benefits increased by $1.5 million, or 4.6%, compared to the first three months of 2002.

Supplies and expenses were $30.1 million in the first three months of 2003, an increase of $8.1 million, or 36.5%, from $22.0 million in the comparable period of 2002. Supplies and expenses as a percentage of operating revenue increased to 8.8% in the first three months of 2003 from 7.1% in the comparable period of 2002. The increase was primarily due to the increase in the cost of fuel, which added $6.8 million in incremental expenses. Fuel expense was higher in the first three months of 2003 as a result of higher fuel prices during the period ($1.02 per gallon average in the first three months of 2003 compared to $0.64 per gallon average in the comparable period of 2002, including transportation costs and excluding taxes) and a 6.5% increase in gallons consumed, partially offset by higher fuel surcharges which are included in operating revenue. Difficult weather conditions during the first three months of 2003 also contributed to a decrease in fuel efficiency. Approximately 18.0% of our fuel consumption during the first three months of 2003 was hedged at an average of $0.58 per gallon, excluding taxes, transportation costs and regional pricing spreads, and reduced fuel expense by $1.1 million in the first three months of 2003. Maintenance and facilities supplies expenses were $13.4 million in the first three months of 2003, an increase of $1.2 million, or 9.8%, from $12.2 million in the comparable period of 2002 due to higher expenditures for vehicle parts and propane.

Operating taxes were $12.9 million in the first three months of 2003, an increase of $1.0 million, or 8.9%, from $11.9 million in the comparable period of 2002. Operating taxes as a percentage of revenue remained at 3.8% in the first three months of both 2003 and 2002. The increase in operating taxes was primarily attributable to increased fuel consumption and increases in real estate assessments and tax rates of our owned and leased properties.

Claims and insurance expenses were $10.3 million in the first three months of 2003, an increase of $0.7 million, or 7.4%, from $9.6 million in the comparable period of 2002. Claims and insurance as a percentage of operating revenue decreased from 3.1% in the first three months of 2002 to 3.0% in the first three months of 2003. The primary contributor to the increase in our claims and insurance expense was our provision for self-insured losses from injury and property damage, which increased by $0.6 million in the first three months of 2003 as we assessed the current experience rate, settlement values and increased exposures and accident frequency expected from the severe weather conditions during the first three months of 2003.

Rents and purchased transportation expenses were $35.6 million in the first three months of 2003, an increase of $5.8 million, or 19.4%, from $29.8 million in the comparable period of 2002. Rents and purchased transportation expenses as a percentage of operating revenue increased to 10.4% in the first three months of 2003 from 9.7% in the comparable period of 2002. Transportation services provided by rail carriers were $7.7 million for the first three months of 2003, an increase of $1.5 million, or 24.2%, from $6.2 million in the comparable period of 2002. Services provided by other carriers was $9.4 million in the first three months of 2003, an increase of $2.5 million, or 36.2%, from $6.9 million in the comparable period of 2002. Both of these increases were due primarily to the increased tonnage shipped as a result of the closure of Consolidated Freightways in September 2002. Local cartage delivery costs were $7.8 million in the first three months of 2003, an increase of $1.4 million, or 21.9%, from $6.4 million in the comparable period of 2002, primarily as a result of higher fuel costs. The cost of leased equipment was $3.5 million in the first three months of 2003, an increase of $0.4 million, or 12.9%, from $3.1 million in the comparable period of 2002.

Communication and utilities expenses were $5.5 million in the first quarter of 2003, relatively flat when compared to $5.3 million in the first quarter of 2002. Communication and utilities expenses were 1.6% of operating revenue in the first quarter of 2003, a slight decrease from 1.7% in the first quarter of 2002.

Depreciation expense was $14.4 million in the first three months of 2003, a decrease of $0.6 million, or 4.2%, from $15.0 million in the comparable period of 2002. The decrease was primarily attributable to reduced losses on disposal of revenue equipment in the first three months of 2003.

Other expenses were $12.0 million in the first three months of 2003, a decrease of $0.7 million, or 5.6%, from $12.7 million in the comparable period of 2002. Significant progress was made on the collection of our accounts receivable and therefore we reduced our provision for bad debt by $1.3 million, compared to the comparable period of 2002. This reduction was partially offset by higher travel and entertainment expenses of $0.4 million and higher snow removal costs of $0.2 million in the first three months of 2003.

Operating Income. Operating income was $12.6 million in the first three months of 2003, an increase of $2.1 million, or 20.4%, from $10.5 million in the comparable period of 2002. Our operating ratio improved to 96.3% in the first three months of 2003, compared to 96.6% in the comparable period of 2002. Operating income at Overnite Transportation was $11.5 million in the first three months of 2003, an increase of $2.2 million, or 23.7%, from $9.3 million in the comparable period of 2002. The operating ratio for Overnite Transportation was 96.2% in the first three months of 2003, compared to 96.6% in the comparable period of 2002. Operating income at Motor Cargo was $1.1 million, a decrease of $0.1 million, or 8.3%, from $1.2 million in the comparable period of 2002. The operating ratio for Motor Cargo was 96.9% in the first three months of 2003, compared to 96.3% in 2002.

Other Income and Expense Items. Intercompany interest income was $3.2 million in the first three months of 2003, a decrease of $1.1 million, or 24.2%, from $4.3 million in the comparable period of 2002. This

decrease resulted from the reduction of cash advances to Union Pacific as a result of pension contributions of $126.5 million in cash in late 2002.

Income Taxes. Income taxes were $6.3 million in the first three months of 2003, at an effective tax rate of 40.2%, compared to $5.8 million in the comparable period of 2002, at an effective tax rate of 39.1%. The tax rate in the first three months of 2003 reflects an increase in the effective tax rate related to state taxes.

Net Income. As a result of the foregoing, net income was $9.3 million in the first three months of 2003, an increase of $0.3 million, or 3.7%, from $9.0 million in the comparable period of 2002. Motor Cargo contributed $0.8 million of net income in the first three months of 2003 and $0.7 million in net income in the comparable period of 2002.

Operating Revenue. Operating revenue was $1,351.8 million in 2002, an increase of $189.9 million, or 16.3%, from $1,161.9 million in 2001. This increase in operating revenue resulted primarily from the full year impact in 2002 of the Motor Cargo acquisition, which contributed approximately $133.5 million in incremental operating revenue for the period. The remaining $56.4 million of the increase was primarily attributable to a $55.4 million, or 5.3%, increase in LTL operating revenue of Overnite Transportation, from $1,043.1 million in 2001 to $1,098.5 million in 2002. This improvement was primarily the result of a 3.9% increase in volume at Overnite Transportation from 7,448 million pounds in 2001 to 7,741 million pounds in 2002. The LTL rate factor excluding fuel surcharge remained relatively flat between the two years. The closure of Consolidated Freightways contributed significantly to this increase in volume, accounting for an estimated $20.0 million of our increase in LTL operating revenue. In addition, dedicated truckload and truckload services at Overnite Transportation generated operating revenue of $87.7 million in 2002, an increase of $8.4 million, or 10.6%, from $79.3 million in 2001 as the number of shipments increased 13.7% in 2002 as compared to 2001. Operating revenue from fuel surcharges at Overnite Transportation was $22.0 million in 2002, a decrease of $7.4 million, or 25.2%, from $29.4 million in 2001, due to lower fuel prices.

Operating Expenses. Operating expenses were $1,280.7 million in 2002, an increase of $165.9 million, or 14.9%, from $1,114.8 million in 2001.

Salaries, wages and employee benefits were $807.1 million in 2002, an increase of $113.4 million, or 16.4%, from $693.7 million in 2001. As a percentage of operating revenue, salaries, wages and employee benefits increased from 59.6% in 2001 to 59.8% in 2002. The largest component of the increase in salaries, wages and employee benefits was the full year impact in 2002 of the Motor Cargo acquisition, as salaries, wages and employee benefits for Motor Cargo employees contributed $69.4 million of incremental expenses. The remaining increase of $44.0 million was primarily due to wage and benefit inflation and increased volume at Overnite Transportation, partially offset by a 2% decrease in the number of full time equivalent employees. Salaries and wages expenses at Overnite Transportation was $511.9 million in 2002, an increase of $18.9 million, or 3.8%, from $493.0 million in 2001. Expenses related to pension and other postretirement benefits at Overnite Transportation were $35.8 million in 2002, an increase of $15.0 million, or 72.1%, from $20.8 million in 2001. This increase was primarily attributable to the lower than expected returns on pension assets and declines in interest rates. Further, the cost of healthcare benefits for active employees at Overnite Transportation was $60.7 million in 2002, an increase of $3.9 million, or 6.9%, from $56.8 million in 2001, as a result of higher healthcare costs and premiums related to HMOs. Expenses for vacation and other paid absences were $54.9 million in 2002, an increase of $3.4 million, or 6.6% from $51.5 million in 2001. Other benefits increased by $2.8 million in 2002, or 4.2%, in line with salary and wage increases.

Supplies and expenses were $102.0 million in 2002, an increase of $4.4 million, or 4.4%, from $97.6 million in 2001. Supplies and expenses as a percentage of operating revenue declined from 8.4% in 2001 to 7.5% in 2002. The dollar increase in supplies and expenses was due to the acquisition of Motor Cargo, which added

$11.5 million in incremental expenses. This was offset by a decrease in supplies and expenses at Overnite Transportation of $7.1 million. This decrease was primarily attributable to a decrease in fuel expense of $5.4 million, or 11.6%, in 2002 as compared to 2001. Fuel expense was lower in 2002 as a result of lower fuel prices during the year ($0.74 per gallon average in 2002 compared to $0.82 per gallon average in 2001, including transportation costs and excluding taxes) and as a result of a 2.7% reduction in gallons consumed. Miles driven by Overnite Transportation decreased 1.9% in 2002 compared to 2001. During 2002, we hedged approximately 16% of our fuel consumption for 2002 at an average of $0.58 per gallon, excluding taxes, transportation costs and regional pricing spreads. Hedging activities reduced fuel expense in 2002 by $1.2 million. Maintenance and facilities supplies expenses decreased $1.7 million, or 3.4%, from $49.9 million in 2001 to $48.2 million in 2002.

Operating taxes were $50.0 million in 2002, an increase of $5.3 million, or 11.9%, from $44.7 million in 2001. Operating taxes as a percentage of revenue decreased from 3.9% in 2001 to 3.7% in 2002. The increase in operating taxes was solely attributable to the full year impact in 2002 of the Motor Cargo acquisition.

Claims and insurance expenses were $43.2 million in 2002, an increase of $8.5 million, or 24.6%, from $34.7 million in 2001. This increase was partly due to the full year impact in 2002 of the Motor Cargo acquisition, which contributed approximately $3.7 million of incremental claims and insurance expense. We also experienced a $4.8 million increase due to higher personal injury and insurance expenses. Higher insurance expenses reflect higher premiums and higher amounts that we will be responsible for under our self insurance program. For example, the self insured retention factor for automobile liability insurance was increased to $5.0 million in 2002 from $2.0 million in 2001.

Rents and purchased transportation expenses were $145.3 million in 2002, an increase of $30.3 million, or 26.3%, from $115.0 million in 2001. Rents and purchased transportation expenses as a percentage of operating revenue increased from 9.9% of operating revenue in 2001 to 10.7% of operating revenue in 2002. This increase was partly due to the full year impact in 2002 of the Motor Cargo acquisition, which contributed approximately $16.3 million of incremental rents and purchased transportation expenses. Additionally, transportation services at Overnite Transportation provided by rail carriers increased by $4.8 million, or 17.8%, from $26.9 million in 2001 to $31.7 million in 2002. Services provided by other trucking carriers increased by $9.2 million, or 32.7%, from $28.1 million in 2001 to $37.3 million in 2002. The cost of short-term equipment rental with drivers and contract labor was $5.3 million in 2002, an increase of $1.6 million, or 43.2%, from $3.7 million in 2001. These increases were due primarily to the increased use of contract transportation and the cost of additional transportation services required to absorb the volume from the closure of Consolidated Freightways. Partially offsetting the increase in rents and purchased transportation expenses were cost savings on local cartage delivery costs, which declined $0.5 million, or 1.8%, from $27.4 million in 2001 to $26.9 million in 2002, as a result of negotiated lower rates and lower usage. As of December 31, 2002, we leased 62 of our 204 service centers. The cost of building, computer and office equipment rent increased by $0.4 million, or 4.7%, from $8.6 million in 2001 to $9.0 million in 2002. Other rents and purchased transportation expenses decreased by $1.5 million from 2001.

Communication and utilities expenses were $20.7 million in 2002, an increase of $0.9 million, or 4.3%, from $19.8 million in 2001. Communication and utilities expenses as a percentage of operating revenue were 1.7% in 2001, as compared to 1.5% in 2002. The increase in communication and utilities expenses was primarily due to the full year impact in 2002 of the Motor Cargo acquisition, which contributed $2.5 million of incremental expenses. This increase was partially offset by lower utility expenses resulting from the reduced cost of natural gas for heating purposes and the reduced costs for electricity.

Depreciation expenses were $58.5 million in 2002, an increase of $10.9 million, or 22.9%, from $47.6 million in 2001. The increase was primarily attributable to the acquisition of Motor Cargo, which contributed approximately $8.7 million of incremental depreciation expenses, as well as to the additional depreciation arising from the purchase of new equipment by Overnite Transportation, which contributed to the balance of the increase.

Other expenses were $53.9 million in 2002, a decrease of $7.7 million, or 12.6%, from $61.6 million in 2001. Significant progress was made on various labor issues reducing our consulting, legal and security costs by $3.2 million in 2002 as compared to 2001. We also benefited from the favorable settlement of labor-related matters that decreased costs by $4.0 million. Employee travel expenses also decreased $2.8 million partially as a result of our improved labor situation. Additional savings were recognized by the “insourcing” of computer programmers, which saved us $3.5 million in 2002, when compared to 2001, as well as a general reduction of $0.7 million of other expenses. These decreases were partially offset by $6.5 million of additional expenses attributable to the full year contribution of Motor Cargo.

Operating Income. Operating income was $71.0 million in 2002, an increase of $23.9 million, or 50.8%, from $47.1 million in 2001, with $9.6 million of this increase related to the full year contribution of Motor Cargo. Our operating ratio improved to 94.7% in 2002, as compared to 95.9% in 2001.

Other Income and Expense Items. Interest income was $19.1 million in 2002, a decrease of $2.4 million, or 11.2%, from $21.5 million in 2001. This decrease reflected the reduction in the balance in our cash advance to Union Pacific as a result of the acquisition of Motor Cargo and the contribution of $126.5 million in cash to our pension plans in late 2002. Other income was $1.5 million, an increase of $1.1 million from $0.4 million in 2001, due to changes in currency gains, gain on the sales of real estate and interest income.

Income Taxes. Income taxes were $1.6 million in 2002, at an effective tax rate of 1.8%, compared to $26.5 million in 2001, at an effective tax rate of 39.0%. The tax rate in 2002 reflects a resolution with the Internal Revenue Service in which a portion of Union Pacific’s acquisition costs associated with its 1986 acquisition of our company became tax deductible, resulting in a one-time benefit of $33.7 million, which was accounted for as a reduction of income tax expense.

Net Income. As a result of the foregoing, net income was $88.8 million in 2002, an increase of $47.3 million, or 113.9%, from $41.5 million in 2001. Motor Cargo contributed $6.0 million of this increase.

Operating Revenue. Operating revenue was $1,161.9 million in 2001, an increase of $22.9 million, or 2.0%, from $1,139.0 million in 2000. This increase in operating revenue resulted partly from the one-month impact in 2001 of the Motor Cargo acquisition, which contributed approximately $10.2 million in incremental operating revenue for the year. LTL operating revenue of Overnite Transportation increased $20.7 million, or 2.0%, from $1,022.4 million in 2000 to $1,043.1 million in 2001. This improvement was primarily the result of a 2.9% increase in our LTL rate factor excluding fuel surcharge from $13.61 in 2000 to $14.01 in 2001. LTL volume shipped declined 0.8% from 7,510 million pounds in 2000 to 7,448 million pounds in 2001. Dedicated truckload and truckload services revenue at Overnite Transportation declined $7.3 million, or 8.4%, from $86.6 million in 2000 to $79.3 million in 2001, as the number of dedicated truckload shipments declined 27.8% in 2001 as compared to 2000 resulting from the loss of a significant customer. Operating revenue from fuel surcharges at Overnite Transportation was $29.4 million in 2001, a decrease of $0.7 million, or 2.3%, from $30.1 million in 2000, due to higher fuel prices.

Operating Expenses. Operating expenses were $1,114.8 million in 2001, an increase of $29.2 million, or 2.7%, from $1,085.6 million in 2000.

Salaries, wages and employee benefits expenses were $693.7 million in 2001, an increase of $43.7 million, or 6.7%, from $650.0 million in 2000. As a percentage of operating revenue, these costs increased to 59.6% of operating revenue in 2001 from 57.1% of operating revenue in 2000. Total salaries and wages at Overnite Transportation were $493.0 million in 2001, an increase of $21.9 million, or 4.6%, from $471.1 million in 2000. The increase was primarily the result of annual rate increases. Pension and other post employment benefit costs were $20.8 million in 2001, an increase of $8.2 million, or 65.1%, from $12.6 million in 2000, primarily as a

result of lower than expected returns on pension assets. Healthcare expenses for active employees were $56.8 million in 2001, an increase of $5.5 million, or 10.7%, from $51.3 million in 2000. The acquisition of Motor Cargo also added $5.2 million of costs in 2001. Expenses related to vacation and other paid absences were $51.5 million in 2001, an increase of $2.0 million, or 4.0%, from $49.5 million in 2000. Other benefits increased by $0.9 million from 2000.

Supplies and expenses, including the cost of fuel and maintenance supplies, were $97.6 million in 2001, a decrease of $1.7 million, or 1.7%, from $99.3 million in 2000. As a percentage of operating revenue, supplies and expenses declined from 8.7% of operating revenue in 2000 to 8.4% of operating revenue in 2001. We achieved this cost improvement primarily as a result of lower fuel expense for the year. Fuel expense for Overnite Transportation was $46.9 million in 2001, a decrease of $4.3 million, or 8.4%, from $51.2 million in 2000. The decrease in overall expense was a result of lower fuel costs ($0.82 per gallon average in 2001 compared to $0.90 per gallon average in 2000, including transportation costs and excluding taxes), partially offset by an increase in total miles driven of less than 0.2%. Hedging activities had no impact on our 2001 fuel costs and reduced fuel costs in 2000 by $2.3 million. The acquisition of Motor Cargo added $0.8 million of costs in 2001. The cost to maintain and operate our fleet and service centers (excluding diesel fuel) was $49.9 million in 2001, an increase of $1.8 million, or 3.7%, from $48.1 million in 2000. This increase was mainly due to a $0.5 million, or 1.7%, increase in vehicle parts and supplies expense, a $0.4 million, or 32.1%, increase in the cost of propane to operate our forklifts and a $0.4 million, or 9.7%, increase in the cost of bridge, tunnel and road tolls.

Operating taxes were $44.7 million in 2001, unchanged from operating taxes of $44.7 million in 2000. Operating taxes represented 3.9% of operating revenue in both periods.

Claims and insurance expenses were $34.7 million in 2001, an increase of $2.6 million, or 8.1%, from $32.1 million in 2000. Expenses resulting from traffic related accidents were $11.0 million in 2001, an increase of $1.5 million, or 15.8%, from $9.5 million in 2000. Expenses from cargo claims were $23.0 million in 2001, an increase of $0.8 million, or 3.6%, from $22.2 million in 2001. Motor Cargo accounted for $0.2 million of the $2.6 million overall increase.

Rents and purchased transportation expenses were $115.0 million in 2001, an increase of $1.4 million, or 1.2%, from $113.6 million in 2000. As a percentage of operating revenue, rents and purchased transportation expenses were 9.9% of operating revenue in 2001, as compared to 10.0% of operating revenue in 2000. The acquisition of Motor Cargo added $1.2 million of costs in 2001, representing most of this increase.

Communication and utilities expenses were $19.8 million in 2001, relatively flat compared to $19.9 million of expense in 2000. Communication and utilities expenses were 1.7% of operating revenue in 2001, as compared to 1.8% of operating revenue in 2000.

Depreciation expense was $47.6 million, or 4.1% of operating revenue in 2001, relatively unchanged from $47.9 million, or 4.2% of operating revenue, in 2000.

Other expenses were $61.6 million in 2001, a decrease of $16.4 million, or 21.0%, from $78.0 million in 2000. As a percentage of operating revenue, other expenses decreased to 5.3% of operating revenue in 2001 from 6.8% of operating revenue in 2000. While we did experience a slight increase in other expenses as a result of the contribution of Motor Cargo for a portion of the year, expenses related to strike activity during 2001 decreased by $10.2 million from 2000 levels, as less strike activity resulted in a reduction in temporary employee relocation, legal and security costs. In addition, bad debt expense decreased to $11.8 million in 2001 from $15.7 million in 2000, a decrease of $3.9 million, or 24.8%.

Operating Income. As a result of the foregoing, operating income was $47.1 million in 2001, a decrease of $6.3 million, or 11.8%, from $53.4 million in 2000. Our operating ratio increased to 95.9% in 2001 from 95.3% in 2000. Motor Cargo contributed $0.4 million to operating income in 2001.

Other Income and Expense Items. Interest income from Union Pacific was $21.5 million in 2001, an increase of $3.8 million, or 21.0%, compared to interest income of $17.7 million in 2000. Interest income increased as a percentage of operating revenue to 1.8% in 2001 from 1.6% in 2000. The increase in both absolute terms and as a percentage of revenue was due to higher intercompany balances for a majority of the year resulting from favorable cash flow from improved earnings, offset by cash required for capital improvements.

Income Taxes. Income tax expense was $26.5 million in 2001, a decrease of $1.2 million, or 4.1%, from $27.7 million in 2000 primarily as a result of lower pre-tax income. Our effective income tax rate was 39.0% in 2001 and 39.1% in 2000.

Net Income. Net income was $41.5 million in 2001, compared to $43.2 million in 2000, a decrease of $1.7 million, or 3.9%. Motor Cargo contributed $0.2 million to net income in 2001.

Net cash provided by operating activities was $29.4 million during the first three months of 2003, an increase of $3.2 million, or 12.4%, from $26.2 million during the comparable period of 2002. Net cash from operations is attributable primarily to net income, adjusted for depreciation, changes in working capital items and pension plan contributions. During the first three months of 2003, we voluntarily contributed $20.0 million to our defined benefit pension plans.

During the first three months of 2003, we invested $11.3 million in revenue equipment and land and buildings, compared to $5.2 million in the comparable period of 2002. During the first three months of 2003, we forwarded cash to Union Pacific, including dividends and cash advances, totaling $11.2 million compared to $22.4 million during the comparable period of 2002.

Net cash provided by operating activities was $94.5 million, $133.8 million and $6.6 million for 2000, 2001 and 2002, respectively. Net cash from operations was attributable primarily to net income, adjusted for depreciation, changes in working capital items and pension plan contributions.

During 2002, we contributed $126.5 million, of which $125.0 million was voluntary, to the Overnite Transportation defined benefit plans. See “—Pension Plans” for a more complete discussion of the funding of our pension plans.

Our business requires substantial ongoing capital investments, particularly for replacement of revenue equipment, such as trucks, tractors and trailers. Capital expenditures totaled $33.3 million, $38.7 million and $64.6 million during 2000, 2001 and 2002, respectively, as set forth in the following table:

The significant increase in capital expenditures from $38.7 million in 2001 to $64.6 million in 2002 was primarily due to the acquisition of revenue equipment. During 2002, we acquired 539 tractors and 1,452 trailers to replace older units in our fleet. The capital expenditure totals above include $1.2 million for 2001 and $10.0 million for 2002 related to capital expenditures at Motor Cargo.

During the first three months of 2003, we acquired 29 tractors and 648 trailers. We also acquired a service center in Bakersfield, California as a result of the liquidation of Consolidated Freightways, which will operate under the Overnite Transportation brand name. We acquired land in Rialto, California, and placed a deposit on land in Salinas, California for service centers that will operate under the Motor Cargo brand name.

We have budgeted capital expenditures of $58.0 million for 2003. Capital expenditures for revenue equipment are expected to be $29.4 million, including $14.3 million for replacement tractors and $15.1 million for replacement trailers. We have also budgeted $12.9 million for real estate projects including opportunities from the sale of the real estate assets of Consolidated Freightways. Capital expenditures for other equipment, which includes maintenance, technology and dock equipment, are expected to be $15.7 million, including $4.3 million for technology equipment and $1.7 million for software. Budgeted computer systems projects include an upgrade to our communication infrastructure and to our time and attendance reporting system. Of our total expected budget for capital expenditures for 2003, approximately $49.0 million will be invested for Overnite Transportation and $9.0 million will be invested for Motor Cargo.

Historically, our capital expenditures have been funded primarily through cash provided by operations and to a lesser extent by the proceeds from sales of used equipment and facilities. We generated cash proceeds from the sale of used tractors and trailers in the amount of $3.0 million, $1.5 million and $7.9 million in 2000, 2001 and 2002, respectively.

In addition, cash dividends in the amount of $16.0 million were paid to Union Pacific in each of the past three years. We also paid cash advances to Union Pacific in the amount of $44.0 million in 2000. This amount represented cash generated in excess of capital expenditure and dividend obligations. In 2001 and 2002, amounts totaling $19.4 million and $56.3 million were drawn from Union Pacific to finance our purchase of Motor Cargo and to minimize underfunding in our pension plans in 2002. Neither dividend payments to Union Pacific nor cash advances to or from Union Pacific will continue after the consummation of this offering.

We currently intend to pay regular quarterly dividends on our common stock at an initial annual rate of $ per share, or $ per year in the aggregate. The declaration of dividends is subject to the discretion of our board of directors and will depend upon various factors, including our net income, financial condition, cash requirements, future prospects and other factors deemed relevant by our board of directors.

In connection with the Acquisition, we expect to obtain a $ senior credit facility. The new bank credit facility will include a $ term loan that will be drawn immediately prior to the consummation of this offering, the proceeds of which will be used to pay a dividend to Union Pacific. See “The Acquisition.” The new bank credit facility will also include a $ revolving loan facility which will be available for working capital, capital expenditures, other general corporate purposes and to support letters of credit. Availability under the new revolving credit facility will be reduced by outstanding letters of credit. Immediately, following this offering, we expect to have $ of availability under the new bank credit facility (net of $ of outstanding letters of credit). The new bank credit facility will contain various covenants, including covenants requiring us to maintain certain financial ratios. We expect that our cash flow from operations will be sufficient to pay interest on borrowings under the new bank credit facility. See “Bank Credit Facility” for a more complete discussion of the expected terms of our new bank credit facility.

Based on our current level of operations and our anticipated growth, we believe that cash flow from operations and other available sources of liquidity, including borrowings under our new bank credit facility, will be sufficient to fund our operations for the next 12 months and for our currently anticipated needs beyond that period.

We have contractual obligations and commercial commitments that may affect our financial condition. However, based on our assessment of the underlying provisions and circumstances of our material contractual

obligations and commercial commitments, there is no known trend, demand, commitment, event or uncertainty that is reasonably likely to occur which would have a material adverse effect on our results of operations, financial condition or liquidity. In addition, our commercial obligations, financings and commitments are customary transactions which are similar to those of other comparable industrial corporations, particularly within the transportation industry.

The following table summarizes our significant contractual obligations and commercial commitments as of December 31, 2002:

We provide defined pension benefits to eligible employees of Overnite Transportation and Motor Cargo (see Note 8 to our audited consolidated financial statements included elsewhere in this prospectus). Overnite Transportation pension benefits are based on years of service and compensation during employment and cover substantially all employees. Motor Cargo pension benefits are based solely upon years of service.

In order to account for these pension plans, we follow FASB Statement No. 87, “Employers’ Accounting for Pensions” (“FAS 87”). FAS 87 requires management to make various estimates and assumptions, including with respect to discount rates used to value liabilities, assumed rates of return on plan assets, compensation increases, employee turnover rates and anticipated employee mortality. The estimates used by management are based on our historical experience, as well as current facts and circumstances. Actual future results may vary from the assumed rates and could have a material impact on our consolidated financial statements. We use third party actuaries to assist us in properly measuring the expense and liability associated with these benefits.

The funded status of our pension plans represents the difference between the fair market value of pension assets and the present value of pension liabilities (projected benefit obligation, or PBO). The funded status is impacted by actual asset return and cash funding, as well as a year-end discount rate which is used to discount the projected benefit obligation. The discount rate we use for this purpose is based on Moody’s AA long-term corporate bond index. The following table presents the funded status of our pension plans as well as the key components that impact the funded status:

For the current fiscal year through June 30, 2003, the actual return on assets was approximately 10% and we funded $30.3 million in cash. If liabilities were required to have been measured as of July 31, 2003, the applicable discount rate would have been 6.50%. The following table shows the estimated impact that changes in actual asset returns, discount rate and cash funding would have had on our funded status as of December 31, 2002:

FAS 87 requires companies to record an additional minimum pension liability adjustment equal to the shortfall between the market value of pension assets and the accumulated benefit obligation at the end of each fiscal year. The accumulated benefit obligation, or ABO, differs from the projected benefit obligation because the ABO does not assume any future salary increases and, accordingly, results in a smaller benefit obligation than the PBO. This minimum pension liability adjustment is recorded as a reduction to shareholders’ equity, net of tax, and has no impact on earnings or cash.

Due to declines in pension assets, combined with lower discount rates, we were required to record an additional minimum pension liability adjustment in 2002. This resulted in a reduction to shareholders’ equity of $83.9 million (after-tax) at December 31, 2002. The equity would be restored to the balance sheet in future periods if the fair value of plan assets exceeds the ABO.

Future year-end adjustments to shareholders’ equity will be affected by the FAS 87 discount rate on December 31 of each year and actual asset returns during the relevant period. The applicable discount rate as of

July 31, 2003 was 6.50%. Accordingly, if interest rates do not change, the discount rate applicable at December 31, 2003 would be 0.25% lower then the discount rate in effect at December 31, 2002. While actual changes in shareholders’ equity depend upon a number of variables and other assumptions, the following table shows the estimated impact that changes in the discount rate and actual asset returns would have on our equity at December 31, 2003:

Pension expense during any particular period is determined based upon the value of pension plan assets as compared to the service cost of pension liabilities (the actuarial cost of benefits earned during a period) and the interest on those liabilities. With respect to the value of plan assets, the expected long-term rate of return on plan assets is applied to a calculated value of plan assets that recognizes changes in fair value over a five-year period. This practice is intended to reduce year-to-year volatility in recorded pension expense, but it can have the effect of delaying the recognition of differences between actual returns on assets and expected returns based on long-term rate of return assumptions. Due to this practice, prior period reductions in the value of plan assets may continue to have an impact on pension expense in future periods. We decreased our assumed rate of return on pension plan assets during 2002 from 10% to 9%. This assumption change resulted in an increase in 2002 pension expense of $5.3 million. During 2002, actual asset returns for our pension plans were adversely affected by deterioration in the equity markets, and the actual return on pension plan assets in 2002 was negative 10%. Our 2003 assumed rate of return on plan assets is 8%.

As discussed above, in addition to return on plan assets, pension expense is impacted by the effects of service cost and interest on the plan liabilities to participants. These amounts are determined actuarially based on current discount rates and assumptions regarding matters such as future compensation levels and mortality rates. These assumptions are updated annually.

Differences in actual experience in relation to these assumptions are generally not recognized immediately, but are deferred together with asset-related gains and losses and, if necessary, amortized as pension expense. The discount rate used for purposes of calculating our pension expense is the same FAS 87 discount rate described under “—Funded Status” above. Pension expense in 2002 was $26.1 million, while 2003 pension expense is expected to be $30.4 million.

If liabilities were required to have been measured as of July 31, 2003, the applicable discount rate would have been 6.50%. The following table illustrates the estimated impact on 2004 pension expense relative to a change in the discount rate. While we do not anticipate further adjustments to our expected rate of return on plan assets, the following table also illustrates the impact on expected 2004 pension expense relative to a change in the expected rate of return.

While we follow FAS 87 rules to record the expense and liability associated with our pension plans, actual cash funding is governed by employee benefit and tax laws and the JCWAA, which included temporary rules allowing companies to use discount rates for 2002 and 2003 equal to 120% of the weighted average 30-year U.S. Treasury bond yield. During 2002, we contributed $126.5 million to our defined benefit pension plans, of which $125.0 million was voluntary. With this contribution, our defined benefit pension plans were approximately 94% funded on an IRS funding basis as of December 31, 2002. During the first three months of 2003, we voluntarily contributed $20.0 million to our defined benefit pension plans. In the second quarter 2003, we contributed another $10.3 million, of which $10.0 million was voluntary, and we intend to voluntarily contribute approximately $15 million more during 2003.

Contributions required subsequent to 2003 are dependent on asset returns, then-current discount rates and a number of other factors. However, we expect to continue funding approximately $45 million per year to help manage any potential required funding in the future. In the event the funding relief measures under the JCWAA are not extended to years subsequent to 2003, significantly higher cash contributions may be required for years 2006 through 2008. Future contributions are expected to be funded primarily by cash generated from operating activities.

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires estimations and judgments that affect the reported amounts of revenues, expenses, assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The following are our critical accounting policies that affect significant areas of our operations and involve judgments and estimates. If these estimates differ materially from actual results, the impact on the consolidated financial statements may be material.

Operating revenue is recognized in accordance with Emerging Issues Task Force 91-9, “Revenue and Expense Recognition for Freight Services in Process,” which requires us to use the percentage of completion method, based upon average transit time, for transactions where we are the sole provider. Expenses related to operating revenue are recognized as incurred.

We periodically contract with third party carriers to perform transportation services for our customers. When we are the primary obligor for these services, meaning we are responsible for pricing, loss or damage and credit risk, we record revenue gross for the entire amount billed to the customer, and operating expenses for amount paid to the third party carriers in accordance with Emerging Issues Task Force 99-19, “Reporting Revenue Gross as a Principal versus Net as an Agent.” When we are not the primary obligor for these transportation services, we record revenue net of the amounts paid to third party carriers. Completed but unpaid interline obligations are accrued for in the month in which the shipment was made.

Claims and insurance costs, which primarily result from property damage, bodily injury, freight damage and workers’ compensation, are accrued using current information and future estimates to arrive at an estimated ultimate value of claims, less recovery and mitigation credits. These ultimate values are based on assumptions related to the rates of growth in medical costs, general inflation, the normal elapsed time required to adjudicate and settle claims and a predicted pattern of injury severity for claims incurred but not reported. In many cases, independent actuaries are retained to render an opinion so that we may value our reserve requirements in a way that is fair, complete and as accurate as possible based on the information available.

We accrue for cargo claims on a per-shipment basis using a method that takes into account the claims experience, including efforts to mitigate the original claim value, and lag time between shipment and the filing date of the claim.

The accuracy of our assumptions relating to claims and insurance costs may be affected by a number of factors. Based on the nature of our business, there may be temporary or permanent reductions or increases in the number of incidents, the severity of the incident and the secondary coverage provided by insurance. Other factors outside of our control that may contribute to casualty costs include weather severity in parts of the country, road, bridge and tunnel condition and tire, brake and power train technology and performance. In the event that actual costs for claims and insurance exceed our original estimates, we will incur expenses in future periods. In addition, we may adjust our underlying assumptions that result in the estimated ultimate claim value. Any of these events could have a material effect on our financial results for future periods.

Independent consultants and actuaries are used to develop estimates of healthcare, pension and other post-employment benefits, or OPEB, costs. With regard to pension obligations, actuarial consultants provide valuations of the future obligations compared to the value of plan assets and earnings of the plan assets for the current and future years, using demographics of the current and future work force. We exercise oversight over the basic assumptions used to develop pension, healthcare and OPEB costs, including an estimated rate of asset returns, salary increases, discount rates and rates of inflation of medical costs, the demographic assumptions of the current and future work force and life expectancy of the retired work force. Information regarding these assumptions is set forth in the notes to our audited consolidated financial statements included elsewhere in this prospectus, and these assumptions are evaluated for fairness by our actuaries.

In the case of healthcare costs, consultants provide claims cost review and healthcare management expertise to accurately measure current cost, incurred but not invoiced services provided and estimates of the growth of healthcare costs in the future.

Expenses and required contributions to the Overnite Transportation and Motor Cargo pension plans have been and will continue to be determined based upon the use of market related values, which is a valuation method that recognizes changes in the value of assets over five years.

The assumptions we use to estimate healthcare, pension and OPEB costs may differ significantly from actual results due to a number of factors, including changing economic conditions, withdrawal rates, participant life spans and changes in actual costs of healthcare. These differences may have a material effect on the amount of expenses we record for these costs. See “—Pension Plans” for a more complete description of the effect on our financial statements of the principal assumptions underlying our pension obligations.

Under FASB Statement No. 142, “Goodwill and Other Intangible Assets” (“FAS 142”), goodwill and other intangible assets having indefinite useful lives are periodically tested for impairment and a charge is taken to the extent of any impairment. Under FAS 142, we are required to perform impairment tests at least annually, and we have elected to perform our annual impairment tests during the third quarter. We are also required to perform impairment tests whenever events or changes in circumstances indicate that the carrying value of goodwill or intangible assets may not be recoverable.

The acquisition of Motor Cargo was accounted for as a purchase transaction and the purchase price was allocated among tangible assets, intangible assets, and goodwill, in accordance with FASB Statement No. 141,

“Business Combinations” and FAS 142. We believe that the allocation of the purchase price is fair and reasonable, and resulted in an increase in depreciation expense of $171,000 annually and the amortization of a favorable lease asset in the amount of $144,000 annually. Our statement of financial position as of December 31, 2002 includes a non-amortizable intangible asset related to the Motor Cargo brand name of $3.0 million and goodwill of $13.2 million.

We completed our annual review of goodwill and intangible assets to test for impairment and concluded that there was no indication of impairment with respect to goodwill or intangible assets.

There were no significant accounting policies that were initially adopted in 2002, other than those required by new statements from the FASB, the SEC and related professional bodies that promulgate accounting principles and disclosure requirements. The recent accounting pronouncements are summarized under the caption “—Recent Accounting Pronouncements” and are included in notes to our consolidated financial statements included elsewhere in this prospectus.

We generate and transport hazardous and nonhazardous materials and we are subject to Federal, state and local environmental laws and regulations. A liability of $0.9 million has been accrued as of December 31, 2002 for future cleanup costs at all petroleum storage and hazardous substance release sites where our obligation is probable and where such costs can be reasonably estimated. We believe that we have adequately identified and estimated the ultimate share of costs at sites where we are alleged to be subject to joint and several liability. Future environmental obligations are not expected to have a material impact on our results of operations or financial condition.

We have been notified by the EPA that we are a potentially responsible party under the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, at three hazardous waste sites. Under CERCLA, we may be jointly and severally liable for all site remediation and expenses. We have investigated the nature and costs of potential response actions at these sites and our own involvement, alone and in relation to the involvement of other named potentially responsible parties, in waste disposal or waste generation at such sites. We have either resolved such liabilities through de minimis settlements or we have taken the position that our obligations with respect to all such sites not subject to settlement will involve immaterial monetary liability, though there can be no assurances in this regard. Furthermore, we believe we are in material compliance with all laws applicable to our operations and we are not aware of any situation or condition that we believe is likely to have a material adverse effect on our business, financial condition or results of operation.

The primary raw material we use is fuel, and fuel costs are subject to regional, national, international and business cycle influences. In the past, we have been able to pass along significant and sustained increases in fuel cost to customers through a fuel surcharge. There is no guarantee that this will be possible in the future.

Our shipment level and revenue mix are subject to seasonal trends common in the transportation industry. Financial results in the first and fourth quarters are normally lower due to reduced shipments during the winter months. Harsh winter weather can also adversely impact our performance by reducing demand and increasing operating expenses including costs related to accidents. The second and third quarters reflect increased demand for services during the spring and summer months, which generally result in improved operating margins.

In May 2003, the FASB issued Statement No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity” (“FAS 150”). FAS 150 establishes standards for how to classify and measure certain financial instruments with characteristics of both liabilities and equity. FAS 150 will not have an impact on our consolidated financial statements.

In April 2003, the FASB issued Statement No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” (“FAS 149”). FAS 149 amends and clarifies financial accounting and reporting for derivative instruments and for hedging activities under FASB Statement No. 133. Management believes that FAS 149 will not have a material impact on our consolidated financial statements.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”). FIN 46 requires the consolidation of an entity when a company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both. The consolidation requirements apply to us in the first interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. FIN 46 will not have a material impact on our consolidated financial statements.

In December 2002, the FASB issued Statement No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure” (“FAS 148”). FAS 148 provides alternative methods of transition for voluntary changes to the fair value based method of accounting for stock-based employee compensation, and amends the disclosure requirements of existing authorities. We have elected to continue to follow APB No. 25 and the disclosure requirements of FAS 123. Therefore, FAS 148 will not have an impact on our consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 elaborates and clarifies the disclosure requirements for loan guarantees and standby letters of credit and clarifies the accounting recognition of an initial liability for the fair value (or market value) of obligations assumed under these types of guarantees. FIN 45 is effective for guarantees issued or modified after December 31, 2002, and the disclosure requirements are effective for financial statements for periods ending after December 15, 2002. The adoption of FIN 45 did not have a material effect on our consolidated financial statements.

In June 2002, the FASB issued Statement No. 146, “Accounting for the Costs Associated with Exit or Disposal Activities” (“FAS 146”). FAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred and is effective for exit or disposal activities that are initiated after December 31, 2002. Under previously issued guidelines, a liability for an exit or disposal activity was recognized at the date of an entity’s commitment to an exit plan. This statement also establishes that fair value is the objective for initial measurement of the liability. We believe the adoption of this accounting requirement will have no material effect on our consolidated financial statements.

In August 2001, the FASB issued Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“FAS 144”). FAS 144 replaces FASB Statement No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of” and was effective January 1, 2002. FAS 144 requires that long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. It also broadens the definition of discontinued operations. The adoption of FAS 144 had no material effect on our consolidated financial statements.

In June 2001, the FASB issued Statement No. 143, “Accounting for Asset Retirement Obligations” (“FAS 143”). FAS 143 requires us to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. FAS 143 is effective for our fiscal year beginning January 1, 2003. The adoption of FAS 143 had no material effect on our consolidated financial statements.

The following table presents selected consolidated financial information for each of the eight fiscal quarters through December 31, 2002 and the first fiscal quarter for the fiscal year ending December 31, 2003. The information has been derived from our unaudited consolidated financial statements which, in our opinion, reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the quarterly information.

According to the American Trucking Association, the trucking industry generated approximately $585 billion in revenue during 2002. The trucking industry consists of private fleets and “for-hire” carrier groups. The private fleet segment consists of fleets owned and operated by companies who move their own goods and generated approximately $277 billion in total trucking industry revenue. The for-hire carrier segment, which generated approximately $308 billion in trucking industry revenue, is comprised principally of two types of motor carriers: truckload and less-than-truckload, or LTL. Truckload carriers dedicate an entire trailer to one customer from origin to destination. LTL carriers typically pick up multiple shipments from multiple customers on a single truck and then route the goods through service centers, where freight may be transferred to other trucks with similar destinations for delivery. LTL transportation providers typically consolidate numerous orders generally ranging from 100 pounds to 10,000 pounds from customers in different locations.

LTL carriers typically utilize a network of service centers together with fleets of tractors and trailers. In general, the more freight an LTL carrier transports within the geographic area surrounding a service center, referred to as “route density,” the shorter the driving distances between pick-up and delivery locations and the lower the carrier’s per-shipment operating expenses. When moving freight between service centers, referred to as “linehaul,” increased volumes along individual shipping lanes allow carriers to reduce service center stops and intermediate handling, resulting in faster transit times, reduced cargo claims and more efficient asset utilization. This is referred to as “lane density.” Route density and lane density are key drivers of profitability for an LTL carrier.

Depending on the distance shipped, the LTL industry is comprised of three principal markets: regional, inter-regional and long-haul.

We believe that the regional and inter-regional markets of the LTL industry will experience the highest growth in the near future, as large U.S. companies increasingly adopt regional distribution strategies, focusing primarily on one- and two-day service, to replace distribution strategies requiring long-haul LTL transportation. While the long-haul market is not expected to grow at the same rate as the regional and inter-regional markets, it nonetheless provides a significant growth opportunity for nationwide regional carriers given the large overall size of this market and the ability of a number of these regional carriers to gain share from the established long-haul providers by providing a competitively priced long-haul product.

There are both union and non-union carriers in our industry, with unionization being particularly prevalent for national carriers. For the most part, the employees of the larger, national LTL carriers have union representation, primarily by the Teamsters, while the employees of the regional carriers tend to be non-union. We believe that carriers with non-union workforces have significant advantages over union carriers, including lower costs associated with wages and benefits, as well as more flexible work rules which enable employees to change work schedules quickly and perform multiple tasks.

The barriers to enter the LTL market, particularly for national carriers, are significantly greater than the barriers to enter the truckload market. Truckload providers generally require limited fixed assets, primarily consisting of tractors and trailers, to provide pick-up and delivery services direct from origin to destination. LTL orders are consolidated at one service center and then moved through a network of other service centers in different geographic areas before ultimate delivery to the customer. Significant capital is required of LTL carriers to create and maintain a network of service centers and a fleet of tractors and trailers, making it difficult for new or smaller companies to compete with established companies.

The LTL industry is highly competitive on the basis of both service and cost efficiency. As a result, a significant amount of consolidation has occurred in the industry over the last two decades. Of the top 60 LTL carriers in operation during 1979, only 9 of these carriers were still providing LTL service as of December 31, 2002. We believe that the September 2002 closure of Consolidated Freightways, which at the time was the third largest LTL carrier in the United States with approximately $2.2 billion in consolidated revenue for the year ended December 31, 2001, will further improve capacity utilization in the industry, particularly in the long-haul market, resulting in a more favorable pricing environment for LTL carriers. On July 8, 2003, Yellow Corporation, the nation’s second largest LTL carrier, announced it was purchasing Roadway Corporation, the nation’s largest LTL carrier. We expect this consolidation trend will continue as carriers are acquired or discontinue operations due to higher union labor costs, recent increases in insurance and benefit costs and the continued loss of market share.

We are a leading, predominantly non-union provider of less-than-truckload, or LTL, transportation services, offering a full spectrum of regional, inter-regional and long-haul services nationwide. We are one of the largest LTL carriers in the United States, with 204 service centers and a fleet of over 6,000 tractors and 21,000 trailers, allowing us to provide full state coverage to all 50 states. Through our national footprint and our partnerships with other carriers, we are able to provide our customers with direct service to over 45,000 cities in the United States, Canada, Puerto Rico, Guam, the U.S. Virgin Islands and Mexico. We have a diverse base of over 60,000 customers from varying geographic and industry markets, including customers in the retail, chemical, automotive, electronics and furniture industries. We employ a flexible, predominantly non-union workforce of over 14,400 employees.

In 2002, we achieved an eight-year high in operating income despite a nationwide strike of Overnite Transportation by the International Brotherhood of Teamsters, or the Teamsters. This strike, which began in October 1999, was discontinued by the Teamsters in October 2002 without obtaining any contract or concessions from us. Commencing in July 2002, Overnite Transportation employees began to decertify the Teamsters as their collective bargaining representatives at Overnite Transportation service centers. This decertification process has resulted in the Teamsters losing representation rights at 22 of the 26 Overnite Transportation service centers where they had previously gained certified representation rights. As a result of the successful resolution of the Teamsters’ strike and the decertifications, the Teamsters’ campaign to organize the employees of Overnite Transportation has become almost entirely dormant. While we were able to achieve positive results during this period, both the Teamsters’ organizing efforts and the strike significantly limited our growth opportunities by hindering our operating efficiency and generating customer concerns about labor strife and its possible impact on service reliability. With the strike and the Teamsters’ organizing efforts largely resolved, we will now be able to increase our focus on enhancing customer relationships, generating new sales and improving the quality and efficiency of our services.

flexible work hours and the ability of our employees to perform multiple tasks, which we believe result in greater productivity, customer service and efficiency. This flexibility is typically not permitted or is significantly limited under the contracts that govern our union competitors. For example, we frequently enter into partnerships and contracts with other non-union carriers to provide linehaul services both to balance our operations and to provide LTL services to remote locations for which we do not have sufficient freight volumes to serve these markets efficiently. Union carriers, on the other hand, are generally prohibited from shipping their freight with non-union truckload carriers, and instead can only ship up to 26% of their linehaul freight by rail, which adversely affects the costs and reliability of their service product. Further, we have the ability to strategically and quickly adjust our workers’ schedules, allowing us to respond to customers’ service requirements without being restricted by union rules.

Comprehensive Nationwide Footprint. Through our network of 204 service centers and our partnerships with other carriers, we are able to offer full state coverage to all 50 states, as well as points in Canada, Puerto Rico, Guam, the U.S. Virgin Islands and Mexico. The recent acquisition of Motor Cargo expanded our national reach by providing an established regional service base in the western United States. Our breadth of geographic coverage allows us to address our customers’ regional, inter-regional and long-haul service requirements as a single source for their LTL shipping needs.

Focused Yield Management Processes. We have developed and streamlined a number of proven initiatives to control costs and improve profitability. We use an activity-based costing system to monitor and manage the profitability of all of our customer accounts and service centers. As part of these processes, operating ratios are calculated and monitored for customers and service centers to identify accounts and service centers that warrant further review. Further, when bidding on customer contracts, we base pricing decisions upon a variety of factors, including expected shipment levels, geographic movements of freight, mix of freight and service requirements. Once awarded, our customer contracts are reviewed regularly to analyze account profitability and to ensure that actual shipment levels, geographic movements of freight, mix of freight and service requirements are consistent with bid assumptions. On a weekly basis, our senior management also reviews and addresses all pricing decisions for significant accounts that are not generating anticipated margins.

Experienced Management Team. Our senior management team has an average of more than 25 years of industry experience. This team, which consists of our Chairman and Chief Executive Officer, Leo H. Suggs, the Chief Operating Officer of Overnite Transportation, Gordon S. Mackenzie, our Chief Financial Officer, Patrick D. Hanley, Senior Vice President of Sales and Marketing of Overnite Transportation, John W. Fain, and our General Counsel, Mark B. Goodwin, was assembled in 1996 and successfully executed a turnaround of our

operations, which has positioned us for future growth. Over the past seven years, our senior management team has successfully returned our company to profitability, has resolved the vast majority of the issues raised by organized labor unions and has improved operating ratios from 104.9% in 1996 to 94.7% in 2002. In addition, our management team has significantly improved the quality of our service by reducing transit times on over 50% of the lanes served, improved on-time performance to an average of 97%, expanded geographic coverage to provide direct service to 100% of the U.S. population in all 50 states and over 95% of the population in Canada and added a number of additional services to complement our core LTL service.

Our goal is to generate shareholder value through profitable revenue growth. We believe we have the capacity available to take on additional revenue without significant increased fixed costs. We are executing a number of initiatives to grow revenue and enhance our profitability by focusing on customers and markets that produce the highest profit margins for our business. We intend to achieve our goal by implementing the following business strategies:

Continue to Gain Market Share in Long-Haul Markets. In the long-haul market, we believe that we offer a better service product than that of our unionized competitors, providing shorter transit times on many major market lanes at competitive prices. While we currently have a small market share, we view the long-haul market as our most promising growth opportunity, due to the overall size of the long-haul market, the competitive nature of our service offerings and labor costs that are generally lower than those of union competitors. In addition to taking market share from existing union carriers, we also intend to continue to selectively acquire business made available by the September 2002 closure of Consolidated Freightways, which predominantly provided long-haul LTL service, when it meets our pricing and margin expectations. Finally, we plan to leverage the established regional presence of Motor Cargo in the western United States both by marketing our expanded long-haul coverage to our existing customers in the eastern United States, as well as by marketing to Motor Cargo customers our ability to serve markets outside the western United States.

Continue to Grow Regional and Inter-Regional Business. The regional and inter-regional markets are the fastest growing areas of the LTL industry, as large U.S. companies increasingly adopt regional distribution strategies, focusing primarily on one- and two-day assembly and distribution service, to replace distribution strategies requiring long-haul LTL transportation. As these distribution strategies continue to evolve, our flexible and efficient operations and our strong national presence afford us significant opportunities to gain this primarily regional business. We believe that our commitment to improve the quality and scope of our service offerings will position us to benefit from the expansion of this market. We are continuously working to reduce transit times, improve on-time delivery and reduce cargo claims in order to gain new customers. We have adjusted our linehaul, most notably in the expanding Midwest region, to reduce our transit times between key urban markets. We are also marketing the comprehensive geographic scope of our service to effectively compete against smaller carriers with limited service reach. As we increase the density in a number of our regional and inter-regional markets, the resulting operating efficiencies will allow us to operate more profitably and improve growth opportunities. Further, our acquisition of Motor Cargo provides an established regional presence in the western United States, which we believe is the fastest growing regional market.

Increase Sales to Local Accounts. Local accounts historically have produced higher margins as a result of the lower purchasing power held by local customers. We believe our ability to offer customers a “one-stop shop” is particularly attractive to local accounts, who do not necessarily have the ability or the desire to contract with many different carriers for their varied shipping needs. We have undertaken a number of sales initiatives to capture additional local account customers as well as increase our sales to existing local customers. Our efforts include the implementation of programs to emphasize the development of driver-customer relationships and encouragement of driver-generated sales leads. In addition, in 2002 we changed the reporting structure of our local sales force so that sales representatives and service center managers work together to develop and retain local account relationships. We also redesigned our sales incentive programs to include minimum quotas on local

account sales. We believe that these sales incentives will motivate our sales force to grow the number and value of high-margin local accounts.

Achieve Growth from Expanded Service Offerings. We plan to focus on growing sales outside of our core LTL service-base. We have expanded our portfolio of ancillary high-margin, value-added LTL services, which include expedited and guaranteed delivery, cross-border, assembly and distribution, trade show, government and third party logistics services. As these services accounted for only 9% of our operating revenue for 2002, and as we had only a small percentage of market share for these services, we believe this market offers a significant growth opportunity. The September 2002 closure of Consolidated Freightways, a key provider of trade show and government services, has expanded this opportunity. We intend to capture additional sales from these services by working with our customers to develop customized value-added services to address their evolving transportation service needs. Our competitive strengths position us to actively and effectively pursue this area of the market. For example, our ability to offer high quality service allows us to market guaranteed, expedited service to our customers, and our cost structure allows us to provide these services in an efficient and cost effective manner. In addition, our national footprint, flexible work rules and operating efficiencies allow us to offer quality and reliable assembly and distribution services. In 2002, we created a non-asset based third party logistics services division called OMC Logistics, which provides a variety of supply chain solutions to our customers, including performing the various functions of a traffic department, warehousing services, providing customers with access to transportation management software and managing customers’ private fleets. Finally, our commitment to service quality positions us to expand our sale of dedicated truckload service, which accounted for 4% of our operating revenue for 2002, as on-time reliability is a critical requirement in this market.

Offer Integrated Service Solutions. We believe that customers in the LTL industry are simplifying shipping needs by reducing the number of motor carriers they use and shifting their demand for LTL services to carriers that provide a “one-stop shop” for their regional, inter-regional, long-haul and specialty shipping needs. Our broad geographic scope, variety of service offerings and focus on customer satisfaction position us to capitalize upon this trend. We are leveraging our relationships with existing customers to gain a larger share of their shipping business. We have also implemented an Executive Sponsor Program, in which members of senior management are responsible for generating sales of additional services by working with our most profitable customers to develop integrated service packages that are tailored to their shipping needs.

Drive Operating Efficiencies. We continually seek to re-engineer our freight handling procedures to minimize intermediate handling, improve service and reduce cargo claims. As we no longer need to devote managerial and capital resources towards addressing the Teamsters’ strike and related labor matters, we are now beginning to implement a number of new efficiency directives. We plan to implement available technologies to improve our collection and analysis of freight data, which will allow us to further optimize our routing and improve the productivity of our network. In addition, our management team has created a system that continually analyzes every aspect of our operations to identify areas where we can improve our transit times and network density, and eliminate operating inefficiencies. For example, we have implemented guidelines for our long-haul lanes in order to improve our load average and reduce costs. We continuously evaluate our lanes and routes to identify opportunities to optimize our operations in a manner that will increase our density, minimize intermediate handling and reduce per-shipment operating expenses. Furthermore, when approaching new business, we target volume growth in markets and lanes with excess capacity so that immediate improvements in density will be achieved through the addition of new volume.

Selectively Pursue Acquisition Opportunities. We believe that our industry provides selected opportunities for expansion through acquisition. For example, our recent acquisition of Motor Cargo provided us with an established regional presence in a number of western U.S. markets. While we do not currently have plans to pursue an acquisition of an operation the size of Motor Cargo in the near term, we will consider smaller acquisitions both to complement our nationwide infrastructure through the acquisition of assets and service centers from other industry participants and to increase our density in geographic areas where we have capacity to do so.

Overnite Transportation was founded in 1935, became a public company in 1957 and was acquired by Union Pacific in 1986. Following this acquisition, and with assistance from Union Pacific, we achieved growth in our physical network and improved our technology systems. During the early 1990s, we shifted the focus of our business from local accounts to large, national accounts and increased the number of our national accounts rapidly. This rapid expansion, coupled with the sudden growth in our long-haul and inter-regional traffic resulting from the 1994 nationwide strike against union LTL carriers, strained our ability to provide reliable service, resulted in a lack of focus on our traditional regional and inter-regional strengths and decreased the percentage of local, high-margin customers in our product mix. In addition, we did not rationalize our pricing to accommodate the change in traffic mix, leading to substantial profit and yield erosion. These factors contributed to net losses in 1995 and 1996, the first time that Overnite Transportation had experienced losses in its 60-year history. As service levels and profitability declined, our relations with our employees deteriorated, and we began to experience labor problems, culminating in an effort by the Teamsters to organize Overnite Transportation employees. At the height of the Teamsters’ campaign to unionize Overnite Transportation employees, the Teamsters had petitioned to gain representation rights at over 60 of Overnite Transportation’s service centers, and they ultimately gained certified representation rights at 26 of the 170 Overnite Transportation service centers. The Teamsters also initiated a nationwide strike against Overnite Transportation in 1999.

Our service and operational turnaround began in April 1996 when Union Pacific appointed Mr. Leo H. Suggs, a 40-year trucking veteran, as Chairman and Chief Executive Officer of Overnite Transportation. Mr. Suggs assembled a new management team throughout the organization, from senior managers to service center managers, by selectively hiring and promoting experienced individuals. This new management team developed a plan to restore our reputation for service and reliability and to return our company to profitability. As a result of management’s turnaround initiatives and employee commitment, we returned to profitability in 1997 and resolved a majority of our labor issues over the following six years. Since 1996, the new management team led by Mr. Suggs has improved transit times on over 50% of lanes served, improved on-time performance to an average of 97%, added full coverage to all 50 states and to over 95% of the population in Canada, added new service offerings and realigned our sales force to report directly to service center managers. Our new management team was also able to successfully resolve the Teamsters’ three-year nationwide strike without entering into any contract with or granting any concessions to the Teamsters. Also, in July 2002, Overnite Transportation employees began to decertify the Teamsters as their collective bargaining representative at Overnite Transportation service centers. The decertification process resulted in the Teamsters losing representation rights at 22 of the 26 Overnite Transportation service centers where they had previously gained certified representation rights. As a result of the resolution of the strike and the decertifications, the Teamsters’ campaign to unionize Overnite Transportation employees has become almost entirely dormant.

In November 2001, Union Pacific acquired Motor Cargo, a leading regional LTL ground transportation services provider in the western United States, including Hawaii and Alaska, as well as select markets in Canada. Immediately following the acquisition, Union Pacific transferred Motor Cargo to us as a wholly owned subsidiary of our company. While we retain the recognized Motor Cargo brand in our western region, we actively seek out revenue and cost synergies between Motor Cargo and the rest of our operations. Motor Cargo employs 1,826 employees and had operating revenue of $143.6 million and an operating ratio of 93.1% during 2002. Motor Cargo operates 34 service centers and relies on partnerships with other carriers to provide LTL services for remote locations in the western United States, including Hawaii and Alaska, as well as select markets in Canada.

LTL Service. We offer a full range of regional, inter-regional and long-haul LTL services in all 50 states, Canada, Puerto Rico, Guam, the U.S. Virgin Islands and Mexico. Approximately 29% of our LTL operating revenue in 2002 was derived from the regional market, 43% from the inter-regional market and 28% from the long-haul market. We provide LTL services through our network of 204 service centers and carrier partnerships.

We have recently expanded our service to provide direct coverage to all 50 states and over 95% of the Canadian population. We transport a variety of products, including fabricated metal products, chemicals, textiles, machinery, furniture and fixtures, electronics and paper products.

We manage the time-critical nature of our services by focusing on on-time departures and disciplined operations. Our network is a hybrid of the “direct-load” network used by regional carriers and the “hub-and-spoke” network typically associated with long-haul carriers. We maximize our network efficiency by using direct loading in high density lanes where we can transport freight directly from the origin service center to the destination service center and by using hub-and-spoke consolidation points on lanes lacking the necessary density. For lanes in which we do not have density to support direct loading, we have 21 service centers that act as our primary consolidation facilities to help balance the number of loads moving on a lane, optimize the number of loads generated, reduce circuity and lessen the dependence on our largest hubs. We employ a combination of single drivers (one driver in the tractor) performing round trips and long runs (involving a layover at another service center) and sleeper teams (two drivers in a tractor) to move loads between service centers. Our combination of single drivers and sleeper teams allow us to provide timely service, specifically in our long-haul markets. In addition, many of our drivers unload and load their trailers as part of the planned work schedule. The flexibility of a non-union workforce enables us to have drivers work on the docks, helping us maintain our service levels and manage our labor costs according to the volume of business.

In addition to our core LTL service, we have developed certain high-margin value-added LTL services that are targeted to specific high-growth market niches, and leverage the strengths of our existing distribution network. For 2002, these services (including fuel surcharges associated with these services) represented approximately 9% of total operating revenue, and include the following:

Cross-Border Services. We offer specialized services for customers transporting freight across the Canadian and Mexican borders as well as into Puerto Rico and Guam. We provide single carrier responsibility for cross-border shipments, eliminating the need to deal with a second carrier in the destination country. We also handle customs documentation for the shippers and provide an advance customs clearance process that allows shipments to be cleared immediately upon arrival at the Canadian border.

Expedited and Guaranteed Transportation Solutions. We offer expedited and guaranteed delivery service for time-critical LTL shipments with commitments that can be as much as three days faster than our standard transit time. In providing this service, we either use our own resources or make specialized arrangements with airfreight carriers, commercial airlines and other contract carriers to extend the reach or shorten the transit time to meet the customer’s requirements.

Assembly and Distribution. Using our extensive service center network and hub service centers, we offer assembly and distribution services. We perform assembly services by picking up LTL shipments for a customer across multi-state areas, transporting them to a regional hub and consolidating them into a dedicated truckload for inter-regional or long-haul transport. We perform distribution services by receiving the truckload at a regional hub and separating it into LTL shipments, which are transported by us to designated customers throughout a multi-state area.

Government Services. We are one of the largest providers of LTL service for the U.S. Government. Agencies served include the U.S. Department of Defense, Internal Revenue Service, Veterans Administration, Department of State, Department of Justice, Coast Guard, General Services Administration, Postal Service and others. All government shipments are coordinated by a special team of our employees who ensure the unique shipping needs of government agencies are consistently met.

Trade Show Services. Our trade show service, which we began to offer in 1997, focuses on the time-sensitive market for exhibit transportation. We estimate that the overall trade show transportation market generates approximately $500 million in annual revenue, with profit margins superior to those of ordinary LTL traffic.

Third Party Logistical Services. During the latter part of 2002, we created a new third party logistics division called OMC Logistics, which provides a variety of supply chain solution services, including performing the various functions of a traffic department and providing customers with access to comprehensive transportation management system software. OMC Logistics also offers to replace and manage private fleets. In addition, OMC Logistics will offer warehousing and order fulfillment services by leveraging the services and expertise of Motor Cargo’s warehousing and fulfillment center, as well as utilizing third party contractors.

Truckload Service. In addition to our LTL service, we provide our customers with truckload transportation solutions. Truckload shipments consist of shipments over 10,000 pounds, and accounted for approximately 8% of our operating revenue in 2002. In our backhaul truckload service, we identify empty trailers traveling on backhaul lanes and market full truckload service to secure freight for these returning trucks. We also offer premium-service dedicated truckload transportation to selected markets where reliability is a critical requirement. We target this dedicated truckload service, which is offered through our Special Services Division, to customers that employ “just-in-time” manufacturing and others, such as automobile manufacturers, that employ time-sensitive inventory management systems. We provide truckload services at compensatory rates, rather than competing solely on price.

Our sales force of approximately 450 employees is organized into three divisions. Approximately 20 national account managers develop relationships with our national account customers. Approximately 350 local account managers are responsible for generating sales through locally-managed accounts within a territory covered by one of our service centers. Approximately 40 inside sales associates establish and maintain their own customer base of small accounts and can develop leads for the local account managers. All sales professionals participate in incentive compensation plans based on revenue and profitability that offer the opportunity to earn in excess of 33% of base salary on an annual basis. From time to time, we will solicit direct city driver involvement in the sales effort through promotional contests with potential for significant awards for participating drivers. In addition, we have approximately 20 sales associates dedicated to serving in our high margin value-added LTL areas, such as expedited and guaranteed delivery, cross-border, trade show and government, and approximately 10 sales associates that serve our truckload customers. We also have approximately 10 sales directors that supervise our sales force.

We have undertaken a number of initiatives to motivate our sales force to generate additional revenue. In 2002, we changed the reporting structure of our local sales force so that sales representatives and service center managers work together to develop and retain local account relationships. We have also redesigned our sales incentive program to include minimum quotas on local account sales, as well as incentives to increase value added revenue. In addition, we have implemented an Executive Sponsor Program, in which members of our senior management are responsible for generating sales of LTL-related services by working with our most profitable customers to develop integrated service packages that are tailored to their shipping needs.

We use our shipment costing systems to direct the efforts of our sales and marketing team. The system assigns an activity cost to every shipment which can then be summarized by customer, by origin-destination lane, by service center or by commodity. For any area of our business, we can analyze profitability, contribution to fixed cost, cost relative to other similar areas and price relative to similar areas. By looking at these measures, the sales team is able to target accounts that need to be renegotiated and identify, and thereby focus on, customers and commodities that have the greatest profit potential.

We operate 204 service centers with a total of 10,184 loading doors. Our 20 largest service centers, in terms of the number of loading doors, are listed below.

We have entered into an agreement with a third party in order to finance and lease the expansion of our South Holland, Illinois service center. The costs to expand the facility were $13.2 million, and these costs were borne by the lessor under the agreement. The original lease covering the expansion was completed in the fourth quarter of 2000. We restructured the terms of the lease in the second quarter of 2003. Our lease expires in 2006, with provisions for renewal upon the agreement of the parties, and our lease payments are sufficient to provide a return on the lessor’s investment. At any time during the lease, we may purchase the facilities at approximately the amount expended by the lessor. If we do not renew the lease and do not exercise our right to purchase the facility, the lessor may remarket the facility, and we have guaranteed the lessor a residual value equal to 85% of the total cost. The amount of this guarantee is approximately $11.2 million. Union Pacific has guaranteed our obligations under these arrangements, and Union Pacific will continue to provide this guarantee following the completion of this offering.

Our Dallas, Texas service center is owned by a joint venture that we entered into with IIG Commercial Developers, Inc. in 1998. We own 50% of this joint venture, and our investment in the joint venture was $3.6 million as of December 31, 2002. We lease the Dallas service center from this joint venture under a lease that expires in 2010.

As of December 31, 2002, we operated a fleet of 6,085 tractors, 21,597 trailers and 1,877 forklifts. The number, type and age of our tractors and trailers are summarized below.

We maintain our fleet through 91 shops strategically co-located with service centers throughout our network. Typically, smaller shops perform repairs and preventive maintenance and larger shops have the ability to do complete engine rebuilds and body work for tractors and trailers. In addition, we operate a tire shop for recapping tires. In 2002, our tire shop recapped over 43,500 tires, more than twice the number of new tires purchased. We produce recapped tires for approximately 75% of the cost of buying recaps. We also operate five “mobile shop” vans that perform preventive maintenance checks and minor repairs. In total, our fleet services department employs over 720 mechanics and approximately 200 administrative, clerical and management personnel. We augment our fleet maintenance capability through purchased services that amount to approximately 8% of our total fleet maintenance expenditures.

Sophisticated information systems are vital to our profitability and growth. A combination of mainframe and client server applications provide comprehensive data collection, complex analysis and processing for critical business information, including all freight and equipment movement events, sales calls and activity, rating and customer information. We have built a data warehouse to evaluate every material component of a shipment’s cost. The data warehouse serves as an information repository used extensively throughout our company to control costs, improve operational efficiency and enhance revenue yield. The information we collect provides decision support for evaluating business indicators, such as the profitability of a specific customer or the operational efficiency of a service center.

We also operate websites to provide our customers with easy access shipping information, including shipment tracking and tracing, rate quotes, customized reports and the ability to generate electronic bills of lading, all in a secure computing environment. These sites also provide transit times and comprehensive information about our products and services and contact information.

We have implemented optical document scanning technology to enhance customer service and billing procedures. As a result, customer service representatives can view images of scanned bills of lading and other shipping documents from their workstations and, if requested, fax them to a customer. This information is also made available on our websites so that customers can access this information directly. We also have an advanced dispatching system to assist in the monitoring of driver/trailer schedules and the adherence to business operating plans. Typically, central dispatchers match “extra” loads to available tractors and drivers located within a geographic region, and the system enhances the dispatcher’s ability to manage loads and drivers from multiple service centers, thereby improving coordination between dispatchers.

We continue to enhance our means of providing electronic connectivity with customers for conducting critical business functions such as invoicing, electronic funds payment, tendering of bills of lading and shipment tracking and tracing. Standard electronic data interchange (EDI) technology, web-based applications and Internet communications are used to facilitate these transactions.

We are implementing a number of new information technology applications in 2003 to enhance our operations. We are implementing an automated time and attendance and a state-of-the-art data collection application for city drivers that will electronically capture pick-up and delivery events to improve outbound planning and billing accuracy. We are also focusing on the re-engineering of some legacy applications and the continued roll out of an easy to manage and maintain technology infrastructure that will make our system more efficient and adaptable. For instance, we will utilize thin client computing technology, which is a centralized system of providing computing functionality through low cost devices attached to centralized servers that run our applications for all of our remote locations.

In order to protect against and be prepared for disruptions in our computer infrastructure, we continuously improve our computer disaster recovery plan and conduct two formal test plans annually. In addition, a business

contingency planning team has been established, made up of key business functional Vice Presidents, to ensure that business contingency plans are aligned with technology disaster support.

In 2002, fuel (excluding fuel taxes) represented approximately 4% of our total operating costs. When fuel costs exceed our planned levels, we seek to charge a portion of the higher cost to our customers through a fuel surcharge. While we have historically been able to offset significant increases in fuel prices through fuel surcharges, we cannot be certain that we will be able to do so in the future. The fuel surcharges we negotiate with our customers only apply when our fuel costs exceed specified levels. Further, these fuel surcharges are customarily limited by caps on the amounts required to be paid by our customers. Accordingly, in order to protect against fluctuations in fuel prices that will not be covered by fuel surcharges, we frequently enter into fuel hedging arrangements. In the event we are not hedged, we are at risk to the extent that changes in the market price of fuel are not covered by our negotiated fuel surcharge arrangements. Alternatively, while the use of fuel hedging arrangements may provide us with protection from adverse fluctuations in fuel prices, by utilizing these arrangements we potentially forgo the benefits that might result from favorable fluctuations in fuel prices or, in some cases, we may incur hedging losses. We have not hedged any of our remaining forecasted fuel consumption for 2003.

The LTL industry is highly competitive, and we compete against other carriers on the basis of service quality and reliability, as well as price. We compete with regional and national motor carriers, and to a lesser extent, with package carriers and railroads. We estimate that the 10 largest LTL carriers generated approximately $17 billion in revenue, representing at least 70% of the LTL industry, excluding package/courier carriers, in 2002. Our major competitors within the LTL industry include Arkansas Best Corporation, CNF, Inc., FedEx Freight, Old Dominion Freight Line, Inc., Roadway Corporation, USFreightways and Yellow Corporation.

The regional market is primarily served by regional, non-union carriers. The long-haul market is primarily served by national, union carriers. Both regional carriers and national carriers provide inter-regional LTL service. We do not believe that any one carrier is dominant in any of the markets of the LTL industry. We believe that we generally compete favorably with most other carriers on the basis of service quality, reliability and price. We also believe that our size and lane density are advantages when competing against smaller carriers in the regional and inter-regional markets and potential disadvantages when competing against the large national carriers in the long-haul market. Additionally, certain smaller niche carriers have greater lane density and lower cost structure in certain regional markets, which may give them a competitive advantage in service quality and price in those markets. Our cost structure, work rule flexibility and service products are generally comparable with large regional, non-union carriers and superior to national, union carriers. However, smaller non-union regional carriers often have a cost advantage because of lower wages and benefits.

LTL trucking companies, including ours, are exposed to claims related to cargo loss and damage, property damage, personal injury and workers’ compensation. We currently maintain insurance covering these risks in amounts that are subject to deductibles that we believe are adequate for our business. We also self-insure for a portion of our claims exposure resulting from these risks, ranging from $250,000 for general liability to $5.0 million per claim for automobile liability. Both our insurance carriers and the states in which we operate require us to post either letters of credit or surety bonds to collateralize this self-insured retention.

Union Pacific, our parent company, administers an insurance program for workers’ compensation and public liability claims for its corporate entities, including us. Under the program, Union Pacific has provided indemnities, insurance guarantees, letters of credit and surety bonds to states and insurance companies for the performance of our obligations under these claims. Following this offering, we will no longer be affiliated with

Union Pacific, and Union Pacific will no longer provide such indemnities, guarantees, letters of credit or surety bonds for our benefit under this program. As a stand-alone company, we will be required to obtain new insurance policies and reapply as a self-insurer in several of the states in which we operate. As a result, insurance carriers and those states will reevaluate our creditworthiness on a stand-alone basis, and the amount of collateral that we must post to secure our self-insurance exposure will likely increase. Accordingly, we will face increased expenditures to provide our own indemnities, guarantees, letters of credit and surety bonds, and we estimate that these expenses will be $4.5 million each year.

As of December 31, 2002, we had over 14,400 employees, over 11,000 of whom are drivers, dock workers and fleet mechanics.

General. Currently, the Teamsters union represents approximately 3% of our 12,600 Overnite Transportation employees at four service centers. Employees at two Motor Cargo service centers located in North Salt Lake, Utah and Reno, Nevada, representing approximately 11% of Motor Cargo’s total work force at 34 service centers, are covered by two separate collective bargaining agreements with unions affiliated with the Teamsters. Although these agreements cover most of the employees at these two service centers, less than half of these covered employees are actual union members. Those contracts are significantly less onerous than the Teamsters’ National Motor Freight Agreement in terms of wages, benefits and restrictive work rules.

Strike. The Teamsters union called a nationwide strike against Overnite Transportation on October 24, 1999. The Teamsters ended the strike on October 24, 2002, by making an unconditional offer on behalf of the remaining strikers to return to work. At that time, there were approximately 300 remaining strikers, of which approximately 100 returned to work. The Teamsters ended their strike without obtaining any contract or concessions from us.

Decertification Elections. Between late 1994 and July 2002, the Teamsters were certified and recognized to represent employees at 26 Overnite Transportation service centers, representing approximately 17% of our employees (and 21% of our non-management employees). Since July 2002, employees at 21 of the 26 represented service centers have voted to end representation by the Teamsters, in most cases by overwhelming margins. The Teamsters also withdrew from representing the employees at one other service center two days prior to the decertification election. To date, 22 service centers have now been officially certified by the National Labor Relations Board, or NLRB, as being non-union. As a result of the decertifications and our successful resolution of the Teamsters’ strike, the Teamsters’ campaign to organize our employees has become almost entirely dormant.

There are four Overnite Transportation service centers that are still represented by the Teamsters that have not had any decertification elections. Decertification petitions at these service centers could not be filed until after July 23, 2003 due to the NLRB’s requirement that a decertification petition may not be filed for a period of one year following the start of bargaining. At these four service centers, elections for representation occurred in 1995 and 1996, but we challenged the NLRB’s certifications and did not begin bargaining with the union until July 24, 2002. On July 28, 2003, a petition for decertification was filed at one of these service centers.

At this time, we have not entered into any collective bargaining agreements with the Teamsters union at Overnite Transportation. However, we are engaged in or prepared to resume collective bargaining negotiations over union contract demands at the remaining represented locations.

We provided LTL, truckload and value added services to over 60,000 customers in 2002. We provide services to a broad range of industries, including the retail industry, which currently accounts for approximately

35% of our LTL operating revenue. The top five commodities handled during 2002 include fabricated metals, chemicals and allied products, apparel and other textile products, furniture and fixtures and electric and electronic equipment.

The majority of our local customers are on our current tariff rates that automatically increase annually when we announce a general rate increase. However, the number of customers and revenue subject to the automatic annual rate increase has gradually been eroding since deregulation of the trucking industry occurred in 1980. The rates for a majority of our national accounts are contractual and must be renegotiated annually. Revenue for national and local accounts each aggregated approximately 50% of our LTL operating revenue during 2002.

For year ended December 31, 2002, our top 20 customers accounted for approximately 25% of our operating revenue, our top 10 customers accounted for approximately 20% of our operating revenue and our top 5 customers accounted for approximately 16% of our operating revenue. Our largest customer for 2002 accounted for approximately 6% of operating revenue.

The trucking industry has been substantially deregulated by the enactment of the Motor Carrier Act of 1980, the Trucking Industry Regulatory Reform Act of 1994, the Federal Aviation Administration Authorization Act of 1994 and the ICC Termination Act of 1995. Rates and services are now largely free of regulatory controls. However, interstate motor carriers remain subject to certain regulatory controls imposed by agencies within the DOT, such as the Federal Motor Carrier Safety Administration and the Surface Transportation Board. Interstate motor carrier operations are subject to safety requirements prescribed by the DOT. Matters such as weight and dimension of equipment are also subject to Federal and state regulations.

The Federal Aviation Administration Authorization Act of 1994 largely deregulated intrastate transportation by motor carriers, prohibiting individual states from regulating entry, pricing, or service levels. However, states did retain the right to require compliance with safety and insurance requirements.

We are subject to Federal, state and local environmental laws and regulations that address, among other things, the transportation, storage, presence, use, disposal and handling of hazardous materials, discharge of stormwater, facility and vehicle emissions into the atmosphere and underground and aboveground fuel storage tanks. Under certain environmental laws, we can be held responsible for any costs relating to contamination at our past or present facilities and at third-party waste disposal sites, including cleanup costs, fines and penalties, and personal injury and property damages. We believe that we are in substantial compliance with all such environmental laws and regulations.

The EPA has issued regulations that require progressive reductions in exhaust emissions from certain diesel engines through 2007. New emissions standards under the regulations and a judicial consent decree went into effect for certain engines beginning in October 2002. In addition, the regulations require subsequent reductions in the sulfur content of diesel fuel beginning in June 2006 and the introduction of emissions after-treatment devices on newly-manufactured engines and vehicles beginning with the model year 2007. Each of these requirements could result in higher prices for tractors and diesel engines and increased fuel and maintenance costs.

Our drivers and dock workers are trained in the handling and transportation of hazardous materials, and drivers are required to have a hazardous materials endorsement on their driver licenses. Approximately 4% of the shipments transported by us in 2002 were classified as hazardous. If we were to be involved in a spill or other accident involving hazardous materials, if such materials were found to have contaminated our equipment or facilities, or if we were found to be in violation of applicable laws and regulations, we could be responsible for clean-up costs, personal injury and property damage and fines or other penalties, any of which could have a

materially adverse effect on us. Shipping hazardous materials also has the potential to affect freight handling logistics, due to DOT and other requirements limiting the types of materials that can be shipped as part of the same cargo load with certain hazardous materials. Furthermore, new DOT security and planning and training requirements will impose additional costs and obligations on shippers of hazardous materials.

We have been named as a potentially responsible party under the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, in connection with the cleanup of three hazardous waste sites. Under these laws, liability for the entire cost of the cleanup of the contaminated site can be imposed upon any current or former owner or operator, or upon any party who sent waste to the site, regardless of the lawfulness of the activities that led to the contamination. We have investigated the nature and costs of potential response actions at these sites and our own involvement, alone and in relation to the involvement of other named potentially responsible parties, in waste disposal or waste generation at such sites. We have either resolved such liabilities through de minimis settlements or we have taken the position that our obligations with respect to all such sites not subject to settlement will involve immaterial monetary liability, though there can be no assurances in this regard.

We are subject to various litigation in the personal injury, property damage, freight claim and employment and labor areas. The Teamsters historically have filed numerous charges against us alleging various violations of the National Labor Relations Act, which we contest and defend. Various other legal actions arising in the normal course of business, are pending. None of the legal actions currently pending against us is expected to have a material adverse effect on us.

The following provides information about our executive officers and directors and their ages as of July 1, 2003. We currently have two directors, both of whom are officers of Overnite Corporation, a newly formed corporation. Within 90 days following this offering, we will appoint six additional directors, at least five of whom will satisfy the independence requirements of The Nasdaq National Market.

Leo H. Suggs. Director, Chairman, Chief Executive Officer and President of Overnite Corporation since July 31, 2003, and Chairman and Chief Executive Officer of Overnite Transportation, a position he has held since April 1996. Mr. Suggs has 45 years of experience in the trucking industry. Prior to 1996, Mr. Suggs served as President and Chief Executive Officer of Preston Trucking Company, Inc., a LTL carrier, and held various executive positions with Yellow Corporation and Ryder/PIE Nationwide, Inc. Mr. Suggs is 63 years old.

Patrick D. Hanley. Director, and Senior Vice President and Chief Financial Officer of Overnite Corporation since July 31, 2003, and Senior Vice President and Chief Financial Officer of Overnite Transportation, a position he has held since June 1996. Prior to 1996, Mr. Hanley served in a variety of financial management positions at Union Pacific and its subsidiaries, including Vice President of Finance of Union Pacific Resources Group, Inc. from 1990 to 1996, and held various management positions with Ford Motor Company. Mr. Hanley is 58 years old.

Gordon S. Mackenzie. Senior Vice President and Chief Operating Officer of Overnite Transportation, a position he has held since July 1996. Prior to joining Overnite Transportation in 1996, he served as Senior Vice President and Chief Operating Officer of Preston Trucking Company, Inc. from 1993 to 1996, and held various executive positions with Standard Trucking Company, Ryder/PIE Nationwide, Inc. and Transcon Lines, Inc. Mr. Mackenzie is 58 years old.

John W. Fain. Senior Vice President—Marketing and Sales of Overnite Transportation, a position he has held since 1996. Prior to 1996, he served as Senior Vice President—Operations and as Vice President—Southeast Region of Overnite Transportation. Mr. Fain joined Overnite Transportation as General Counsel in 1982. Mr. Fain is 49 years old.

Mark B. Goodwin. Senior Vice President, General Counsel and Secretary of Overnite Corporation since July 31, 2003, and Senior Vice President and General Counsel of Overnite Transportation, a position he has held since December 1998. Mr. Goodwin joined Overnite Transportation as Vice President and General Counsel in 1992. Mr. Goodwin has been continuously employed by Union Pacific and its subsidiaries since 1983. Prior to 1983, Mr. Goodwin was employed as an attorney with Steptoe & Johnson in Washington, D.C. Mr. Goodwin is 54 years old.

Louis V. Holdener. President and Chief Operating Officer of Motor Cargo Industries, Inc. since April 2001. Prior to that, Mr. Holdener served as Vice President of Motor Cargo Industries, Inc. from 1997 to 2001 and President of its principal operating subsidiary since 1991. Mr. Holdener has been continuously employed with Motor Cargo Industries, Inc. and its subsidiaries since 1965. Mr. Holdener is 65 years old.

When we complete this offering, our board of directors will consist of two persons. We intend for our board ultimately to consist of eight persons, at least a majority of whom will satisfy the independence requirements of The Nasdaq National Market.

Our executive officers are appointed by the board on an annual basis and serve until their successors have been duly elected. There are no family relationships among any of our directors or executive officers.

Our board will establish various committees to assist it with its responsibilities. Those committees are described below. Each committee established by the board will undergo an annual performance evaluation to ensure that the committee adequately performs its responsibilities.

After this offering, our board will designate an audit committee that will consist of at least three directors. Each member of the audit committee will be financially literate at the time such member is appointed. The composition of the audit committee will satisfy the independence requirements of The Nasdaq National Market and the SEC. No audit committee member will receive from us any compensation other than that paid with respect to such member’s service as a director, including service on committees. In addition, no member of our audit committee will own or control more than 10% of our common stock.

The audit committee will have at least four regular meetings each year. The results of each meeting will be reported at the next regular meeting of our board.

After this offering, our board will designate a nominating and governance committee that will consist of at least three directors. The composition of the nominating and governance committee will satisfy the independence requirements of The Nasdaq National Market. The nominating and governance committee will:

To fulfill these responsibilities, the nominating and governance committee will:

After this offering, our board will designate a compensation committee that will consist of at least three directors. The composition of the compensation committee will satisfy the independence requirements of The Nasdaq National Market. The nominating and governance committee will recommend to our board nominees for the compensation committee. The compensation committee will meet at least twice during each fiscal year. The primary responsibility of the compensation committee will be to develop and oversee the implementation of our philosophy with respect to the compensation of our officers. In that regard, the compensation committee will:

An executive committee will be formed after this offering, the responsibilities of which will be set forth in our bylaws. To the extent permitted by Virginia law, the executive committee will have the authority to act for our board when the board is not in session and to direct and manage our business and affairs in our best interests and in the best interests of our shareholders.

After this offering, all non-employee directors will receive a retainer of $45,000 per year, half of which will be payable in cash and half in shares of our common stock. Employee directors will not receive retainers. Additionally, chairpersons of our board committees, other than the chairperson of our audit committee, will receive an additional annual retainer of $5,000, half of which will be payable in cash and half in shares of our common stock. The chairperson of our audit committee will receive an additional annual retainer of $10,000, half of which will be payable in cash and half in shares of our common stock. We intend to establish a deferral plan that would allow each non-employee director to defer receipt of all or part of the retainer fee. We will reimburse each of our directors for reasonable travel expenses incurred in connection with attending all board and board committee meetings.

The following table shows the compensation for the fiscal year ended December 31, 2002, received by or paid to our chief executive officer and each of our four most highly compensated executive officers, other than our chief executive officer, based on salary and bonus information. In this prospectus, we refer to our chief executive officer and our four other most highly compensated executive officers as our “named executive officers.”

The following table shows information about the grants of options to purchase Union Pacific common stock to our named executive officers in the fiscal year ended December 31, 2002. No SARs covering Union Pacific common stock were granted to our named executive officers in the fiscal year ended December 31, 2002 or in any fiscal year prior to December 31, 2002.

Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values

The following table shows information about the exercise of Union Pacific stock options during the year ended December 31, 2002 by each of our named executive officers and the fiscal year-end value of the unexercised options. Each of the options listed below relates to Union Pacific common stock.

Set forth below is information concerning our benefit plans that will be effective immediately following the consummation of this offering. Under these plans, we propose to pay cash and noncash compensation, including equity grants, to our executive officers.

We intend to adopt an incentive compensation plan, which we refer to in this prospectus as the incentive plan. The incentive plan is intended to serve as an incentive compensation plan for executives, non-employee directors, certain key managers and other contributing employees. We believe that the incentive plan will assist us in recruiting and retaining employees with ability and initiative and will help align employees’ interests with ours and those of our shareholders. Therefore, we plan to make grants to our officers and employees under our incentive compensation plan in early 2004.

Administration. The compensation committee of our board will administer the incentive plan. The compensation committee may delegate its authority to administer the incentive plan to one or more of our officers. However, the compensation committee may not delegate its responsibility with respect to individuals

who are subject to Section 16 of the Securities Exchange Act of 1934. As used in this summary, the term “administrator” means the compensation committee and any delegate of the compensation committee.

Participants. Any of our employees or employees of our related entities, or our non-employee directors, who, in the sole discretion of the administrator, have contributed or can be expected to contribute to our profits or growth or the profits and growth of any of our related entities may be selected to participate in the incentive plan. We may award these individuals with one or more of the following:

Options. Options granted under the incentive plan may be incentive stock options or nonqualified stock options. The option price of the award may not be less than the shares’ fair market value on the grant date and, except in connection with stock dividends, stock splits and similar events, the option price may not be reduced by amendment, cancellation or otherwise. The option price may be paid in cash, in a cash equivalent acceptable to the administrator, with shares of our common stock or with a combination of cash and shares of our common stock. Options may be exercised in whole or in part at the times and subject to the conditions prescribed by the administrator. However, no option may be exercised more than 10 years after its grant. The incentive plan provides that a participant may not be granted options in a calendar year for more than shares of our common stock.

Stock Appreciation Rights. Stock appreciation rights entitle the participant to receive, with respect to each share of our common stock for which the stock appreciation right is exercised, the excess, if any, of the fair market value of our common stock on the date of exercise over the initial value. The “initial value” is a price per share of our common stock determined by the administrator on the grant date, which may not be less than the fair market value of a share of our common stock on that date or the option price of a related stock option. The amount payable on the exercise of a stock appreciation right may be paid in cash, shares of our common stock or a combination of the two. Stock appreciation rights may be granted with options or independently of options. Stock appreciation rights may be exercised in whole or in part at the times and subject to the conditions prescribed by the administrator. However, no stock appreciation right may be exercised more than 10 years after its grant. The incentive plan provides that no participant may be granted stock appreciation rights in any calendar year with respect to more than shares of our common stock. For purposes of this limitation and the individual limitation on the grant of options, a stock appreciation right and a related option are treated as a single award.

Stock Awards. Stock awards entitle the participant to receive shares of our common stock. A participant’s rights in the stock award may be nontransferable or forfeitable or both for a period of time or subject to conditions prescribed by the administrator. These conditions may include, for example, a requirement that the participant continue employment for a specified period (a retention stock award), or that we or any of our related entities or the participant achieve stated objectives. If the shares are not immediately vested and transferable, the period of restriction will be at least three years. However, the period may be reduced to one year if the transferability, vesting or both is subject to the satisfaction of one or more performance objectives based on the performance criteria described below. The requirements for vesting and transferability in all or part of the shares may be waived in connection with a participant’s termination of employment if the administrator finds that the circumstances of the particular case justify doing so. The incentive plan provides that no participant may be granted stock awards in any calendar year for more than shares of our common stock.

Performance Shares. Performance share awards entitle the participant to receive a payment equal to the fair market value of a specified number of shares of our common stock if certain performance objectives or other

conditions prescribed by the administrator are satisfied. The performance period will be at least three years. However, the period may be reduced to one year if the performance shares will be earned upon the achievement of stated performance objectives based on the performance criteria described below. The performance period may be shortened and the administrator may adjust the performance objectives for all or part of the performance shares in connection with a participant’s termination of employment if the administrator finds that the circumstances of the particular case justify doing so. To the extent that the performance shares are earned, our payment obligation may be settled in cash, shares of our common stock or a combination of the two. The incentive plan provides that no participant may be granted more than performance shares in a calendar year.

Incentive Awards. Incentive awards entitle the participant to receive a payment if certain performance objectives or other conditions prescribed by the administrator are satisfied. The performance period will be at least one year. The performance objectives that apply to an incentive award may be based on the performance criteria described below. To the extent that incentive awards are earned, our obligation may be settled in cash, shares of our common stock or a combination of the two. The incentive plan provides that no participant may be granted incentive awards in any calendar year with a maximum possible payment of more than $ (in the case of awards with a one year performance period). The incentive plan also provides that no participant may be granted incentive awards in any calendar year with a maximum possible payment of more than $ times the number of months in the performance period (in the case of awards with a performance period greater than one year).

Shares Reserved for Issuance. We may issue a maximum of shares of our common stock under the incentive plan, including shares of common stock that may be issued upon the exercise of options. The terms of outstanding awards, the share limitations and the individual grant limitations described above will be adjusted as the compensation committee deems appropriate in the event of a stock dividend, stock split, combination, reclassification or similar events.

Deferrals. The incentive plan allows the compensation committee to establish rules and procedures that permit participants to defer all or part of the income that would be recognized under incentive awards, stock awards, performance share awards and upon the exercise of nonqualified stock options. The rules and procedures will address when the participant’s deferral election must be made, the amount that may be deferred, the investment measures that will be used to credit hypothetical investment gains and losses on the deferrals and the event or date on which deferrals will be distributed. The rules and procedures established by the compensation committee also will allow the deferral of incentive awards or other cash bonuses subject to terms and conditions similar to those governing Union Pacific’s Premium Exchange Program.

Amounts deferred under the incentive plan will be settled in cash, our common stock or a combination of cash and common stock in accordance with the rules and procedures established by the compensation committee. Shares of our common stock that are issued in settlement of the deferrals reduce the shares reserved for issuance under the incentive plan.

Performance Criteria. A participant’s rights under stock awards, performance shares and stock awards granted under the incentive plan may be subject to our company or a subsidiary or a business unit (individually or in any combination) of our company achieving stated performance objectives. The performance objectives may be stated with respect to (a) cash flow and/or free cash flow (before or after dividends), (b) earnings per share (including earnings before interest, taxes, depreciation and amortization)(diluted and basic earnings per share), (c) the price of our common stock, (d) return on equity, (e) total shareholder return, (f) return on capital (including return on total capital or return on invested capital), (g) return on assets or net assets, (h) market capitalization, (i) total enterprise value (market capitalization plus debt), (j) economic value added, (k) debt leverage (debt to capital), (l) revenue, (m) income or net income, (n) operating income, (o) operating profit or net operating profit, (p) operating margin or profit margin, (q) return on operating revenue, (r) cash from operations, (s) operating ratio, (t) commodity or operating revenue and (u) market share.

Change of Control. The incentive plan provides that each outstanding option and stock appreciation right will become fully exercisable, each outstanding stock award will become vested and transferable and outstanding performance shares and incentive awards will be earned:

If a participant becomes subject to the excise tax under Section 4999 of the Internal Revenue Code due to a change in control, the incentive plan provides that benefits will be reduced to avoid excise tax liability if such reduction would allow the participant to receive a greater net after-tax benefit or be indemnified from the excise tax liability (if the right to indemnification is provided under an agreement between the participant and us).

Under the incentive plan, the term “change in control” is generally defined to include (1) the acquisition of at least 30% of our voting securities by any person, (2) certain changes in the composition of our board of directors, (3) a merger or consolidation in which our shareholders own less than 50% of the voting securities of the surviving entity, (4) shareholder approval of a liquidation or dissolution of our company and (5) a transfer of all or substantially all of our total assets.

Termination; Amendment. We may not grant any option, stock appreciation right, stock award, incentive awards or performance shares under the incentive plan after , 2013. The board may sooner terminate the incentive plan without further action by shareholders. The board also may amend the incentive plan, except that no amendment will be effective without shareholder approval if the amendment (a) increases the aggregate number of shares of our common stock that may be issued under the incentive plan (other than adjustments described under “—Shares Reserved for Issuance”) or (b) changes the class of individuals who are eligible to participate in the incentive plan.

Option Grants. Upon the completion of this offering, we intend to award Mr. Suggs , Mr. Hanley , Mr. Mackenzie , Mr. Fain and Mr. Goodwin options to purchase shares of our common stock at the initial public offering price on the cover page of the prospectus. The options will have a three-year vesting period from the date of the completion of this offering. Options may be exercised in whole or in part at the times and subject to the conditions prescribed by the administrator. However, no option may be exercised more than 10 years after its grant. As a result of these awards, Messrs. Suggs, Hanley, Mackenzie, Fain and Goodwin will not participate in the award of options for other employees planned for early 2004.

Restricted Share Grants. Upon the completion of this offering, we intend to award Mr. Suggs , Mr. Hanley , Mr. Mackenzie , Mr. Fain and Mr. Goodwin restricted shares of common stock. The restricted shares will vest and become transferable three years from the date of the completion of this offering. The restricted shares also will vest and become transferable if, during that three-year period, the individual’s employment ends on the account of death, disability, retirement or following a change in control. Unless the compensation committee otherwise provides, the restricted shares will be forfeited if the individual’s employment with us ends for any other reason during the three-year period.

Grants of Shares to Employees. In connection with this offering and to strengthen employee commitment to our financial success, we intend to award 20 shares of our common stock to each of our full-time employees and 10 shares of our common stock to each of our part-time employees who have been employed by us for at least twelve months before the completion of this offering. We expect to grant these awards before January 1, 2004. The shares will vest and become transferable immediately upon the grant of the award. The award of the shares to employees who are represented by the Teamsters is subject to bargaining with the Teamsters. Based on the number of our full-time employees as of July 1, 2003 and part-time employees who were employed by us for at least twelve months before July 1, 2003, we anticipate awarding an aggregate of approximately 260,000 shares of our common stock to these employees.

We plan to sponsor an employee stock purchase plan following the completion of this offering. The new employee stock purchase plan will permit employees to purchase up to 200 shares of our common stock annually at a price of no less than 95% of the price per share of our common stock on The Nasdaq National Market on the last date available to subscribe to the plan for the applicable year. The compensation committee will administer the employee stock purchase plan. Our board may amend or terminate the plan. The employee stock purchase plan will be intended to comply with the requirements of Section 423 of the Internal Revenue Code. Availability of the employee stock purchase plan to employees who are represented by the Teamsters is subject to bargaining with the Teamsters.

We provide pensions under tax-qualified defined benefit plans for substantially all of our employees and the employees of our related entities. Our named executive officers participate in the retirement plan for employees of Overnite Transportation, which we refer to in this prospectus as the retirement plan, as well as our Supplemental Executive Retirement Plan, which we refer to in this prospectus as the supplemental executive retirement plan.

Retirement Plan. The retirement plan is a tax-qualified, noncontributory, defined benefit plan. The amount of annual pension benefit received by an employee covered by the retirement plan is based upon the employee’s average annual compensation for his or her most highly compensated five consecutive calendar years and the employee’s years of credited service (up to 30 years). Annual compensation under the retirement plan is generally equal to an employee’s W-2 wages plus deferrals less taxable life insurance premiums and less any stock-based income. For the named executive officers, annual compensation under the retirement plan for the fiscal year ended December 31, 2002 equals the sum of the amounts shown in the salary and bonus columns. However, as currently required by the Internal Revenue Code, the retirement plan disregards compensation in excess of $200,000.

Supplemental Executive Retirement Plan. The supplemental executive retirement plan provides a benefit using the same formula as the retirement plan except that the supplemental executive retirement plan does not apply the Internal Revenue Code limits on compensation that may be recognized under a tax-qualified pension plan or the maximum benefit that may be paid under a tax-qualified pension plan. The supplemental executive retirement plan also recognizes as compensation amounts of annual bonuses deferred by a participating employee. In addition, the supplemental executive retirement plan allows participating employees to be credited with deemed additional service, deemed years of age or both. The accrued benefit payable under the supplemental executive retirement plan is reduced by the amount of the accrued benefit payable under the retirement plan. We intend to establish a trust or other vehicle to anticipate our obligations under the supplemental executive retirement plan, which is not a funded plan.

The following table shows the estimated combined annual benefits payable under the retirement plan and the supplemental executive retirement plan at normal retirement age (65).

The benefits shown in the pension plan table are payable in the form of a single life annuity and are not subject to any reduction for Social Security benefits. The benefits shown in the pension table will be actuarially adjusted if they are paid other than as a single life annuity.

The credited years of service under the pension plans for each of the named executive officers as of December 31, 2002 are as follows: Mr. Suggs, 15 years; Mr. Fain, 21 years; Mr. Hanley, 20 years; Mr. Mackenzie, 7 years; and Mr. Goodwin, 20 years.

Following this offering, Union Pacific has agreed to guarantee payments under the supplemental executive retirement plan representing benefits accrued to the named executive officers as of the date of this offering in the event we are unable to meet these obligations.

Qualified Plans. We maintain three 401(k) plans for our employees at Overnite Transportation and Motor Cargo that are qualified under the Internal Revenue Code. Under the 401(k) plans, eligible hourly and salaried employees may elect to defer from 1% to 12% of their compensation, up to the IRS maximum ($12,000 for 2003). Employees are eligible to participate at date of hire, and are eligible for a company matching contribution after completion of one year of service. We match 50% of an employee’s deferrals up to 7% of compensation, for a maximum match of 3.5% of compensation. Employees vest completely and immediately with the initial company matching contribution. Based on our achievement of certain financial targets, we may choose each year to make additional matching contributions increasing to 75% or 100% of an employee’s deferrals up to 7% of compensation. The matching contributions are immediately vested. The plan also has a catch-up contribution feature for participants over age 50. All contributions under the 401(k) plans currently are invested, pursuant to participant elections, in mutual funds and institutional commingled funds managed by The Vanguard Group of Investment Companies.

Supplemental 401(k) Plan. We also maintain a supplemental 401(k) plan for certain employees. This supplemental plan provides benefits in excess of those permitted under the qualified 401(k) plans described above. The supplemental 401(k) plan otherwise mirrors the terms of the qualified 401(k) plans. We intend to establish a trust or other vehicle to anticipate our obligations under the supplemental 401(k) plan. Following this offering, Union Pacific has agreed to guarantee payments under the supplemental 401(k) plan with respect to these accounts as of the date of this offering.

We and Union Pacific have agreed that, following this offering, all Union Pacific options held by our employees will remain outstanding options to purchase shares of Union Pacific common stock. All unvested Union Pacific options will vest according to their current vesting schedules. Subject to vesting and without extending the exercise period of 10 years from the grant date our employees who hold Union Pacific nonqualified options will have up to five years from the date of consummation of this offering to exercise the Union Pacific options. Our employees who hold Union Pacific incentive stock options granted prior to 1996 will have up to three months from the date of consummation of this offering to exercise such options. Union Pacific incentive stock options granted between 1996 and 2000, will automatically become nonqualified options. Any Union Pacific retention shares will remain shares of Union Pacific common stock and will vest upon completion of this offering.

Union Pacific 2001 Long-Term Plan. In November 2000, Union Pacific established the 2001 Long-Term Plan. Participants were awarded retention shares or retention stock units and cash awards subject to attainment of performance targets and continued employment through January 31, 2004. The 2001 Long-Term Plan performance criteria include three-year (2001-2003) cumulative earnings per share and stock price targets. Varying levels of awards may be earned based upon achievement of the performance targets. All eligible participants in the 2001 Long-Term Plan, including our employees, will continue to participate in and will receive from Union Pacific awards consistent with the achievement of financial performance targets as defined

by the 2001 Long-Term Plan. Union Pacific has agreed, effective upon completion of this offering, to waive the employment requirement under the 2001 Long-Term Plan with respect to our employees. The awards, if any, will be paid in accordance with the terms of the 2001 Long-Term Plan.

Deferred Compensation. Certain of our eligible employees elected to defer part of their compensation under Union Pacific’s deferred compensation plans. We and Union Pacific have agreed that completion of this offering will not be treated as a termination under the plans for participants who remain employed by us. A termination from our service will be treated as a termination under the plans and Union Pacific will pay the benefit obligations of its deferred compensation plans.

We provide a savings plan for employees of Overnite Transportation. Employees can make deposits through payroll withholding or direct payment. Employee accounts earn 6.0% interest, compounded monthly. There are no minimum balance or minimum contribution requirements, and the cost of administering the employee savings plan is borne by us. Employees may not obtain loans from the savings plan. The employee accounts are not insured by us or any other party, and we reserve the right to amend or discontinue the plan at any time. Furthermore, employees may withdraw their balance at any time. As of March 31, 2003 and 2002, the balances in the savings plan were $20.1 million and $14.8 million, respectively, and are reflected as a current liability.

In September 1999, the board of directors of Union Pacific approved the Executive Stock Purchase Incentive Plan, which we refer to in this prospectus as the ESPIP, whereby certain of our officers purchased common stock at fair market value with the proceeds of full-recourse, unsecured, interest bearing loans from Union Pacific. The loans have a 76 month term, commencing October 1, 1999, and accrue interest at 6.02% (the applicable Federal rate as determined pursuant to Section 1274(d) of the Code on the purchase date for loans of such maturity), compounded annually. Deferred cash payments were to be awarded to participants to repay interest and the loan principal if certain performance and retention criteria were met within the 40-month performance period that ended January 31, 2003.

Dividends paid on the purchased shares were originally assigned to Union Pacific to offset the accrued interest on the loan balance until March 2001 when the first performance criterion was satisfied, and accordingly thereafter, the dividends on the purchased shares were paid directly to the participants. Satisfaction of the first criterion also entitled participants to receive a deferred cash payment equal to the net accrued interest on the outstanding principal balance of their loan. Satisfaction of the second performance criterion based on earnings per share achieved through December 2002 entitled participants to receive a deferred cash payment equal to one-third of the outstanding principal balance of their loan and satisfaction of the service criterion (continued employment with Union Pacific until January 31, 2003) entitled participants to receive an additional deferred cash payment equal to one-third of the outstanding principal balance of their loan. Thus, on January 31, 2003, participants received a deferred cash payment equal to two-thirds of the outstanding principal balance of their loan plus the net accrued interest on their loan. Such amounts were applied against the participants’ outstanding loan balances pursuant to the terms of the ESPIP. The remaining balance of the loan is payable in three equal installments on January 31, 2004, January 31, 2005 and January 31, 2006. However, upon completion of this offering, the remaining balance of the loan is payable to Union Pacific within 90 days.

The outstanding principal balance of the loan may be prepaid at any time at the named executive officer’s option and must be accelerated if the named executive officer’s service is terminated. The following table describes the indebtedness of the named executive officers under the ESPIP to Union Pacific:

The following table indicates the number of shares of our common stock that will be owned beneficially upon consummation of this offering and the number of shares of common stock of Union Pacific owned beneficially as of July 1, 2003 by each of our directors and named executive officers and by all of our directors and executive officers as a group. Unless noted, each of the named individuals had sole voting and investment power with respect to the shares shown.

Prior to this offering, our business has been conducted primarily through Overnite Transportation and Motor Cargo. Overnite Transportation and Motor Cargo are indirect wholly owned subsidiaries of Overnite Holding. Overnite Holding is a direct wholly owned subsidiary of Union Pacific. On August 4, 2003, Union Pacific announced that it intended to sell its entire interest in Overnite Holding through an initial public offering. In order to facilitate this offering, immediately prior to the consummation of this offering, Overnite Corporation, a newly formed corporation, will acquire from Union Pacific all of the outstanding common stock of Overnite Holding. In exchange, Overnite Corporation will issue to Union Pacific (1) all of its outstanding common stock and (2) a $1 million promissory note to be payable by Overnite Corporation six months following the date of consummation of the Acquisition. In addition, subsequent to this transaction, but immediately prior to the consummation of this offering, Overnite Holding will pay to Union Pacific a dividend consisting of $128 million in cash and the forgiveness of our net intercompany advances to Union Pacific as of the date of the Acquisition, which amounted to approximately $170 million as of March 31, 2003. The cash portion of this dividend will be payable from the proceeds of the initial borrowings under the term loan for our new bank credit facility, the terms of which are more fully described in “Bank Credit Facility.” Following the Acquisition, Overnite Transportation and Motor Cargo will become indirect wholly owned subsidiaries of Overnite Corporation. Union Pacific, as the selling shareholder, will initially sell in this offering approximately 90.9% of the common stock of Overnite Corporation that it receives in the Acquisition. In the event that the underwriters’ over-allotment option is exercised in full, Union Pacific will sell in this offering 100% of the common stock of Overnite Corporation that it receives in the Acquisition. Union Pacific will receive the proceeds from this offering as the selling shareholder. The existing management of Overnite Transportation will operate Overnite Corporation after this offering and the Acquisition.

The Acquisition has been structured so that Overnite Corporation and Union Pacific will be able to make elections under Section 338(h)(10) of the Internal Revenue Code, referred to as “Section 338 Elections,” to treat, for U.S. Federal income tax purposes, Overnite Corporation’s acquisition of Overnite Holding stock as a purchase of all of the assets of Overnite Holding and Overnite Transportation. A Section 338 Election will not be made for Motor Cargo. As a result of the Section 338 Elections, the Federal income tax basis of the assets of Overnite Holding and Overnite Transportation (but not Motor Cargo) will be adjusted in accordance with applicable Treasury regulations to reflect their value at the Acquisition date. Overnite Corporation will be able to claim depreciation or amortization deductions for substantially all of the value of those assets. See the unaudited pro forma consolidated financial statements included elsewhere in this prospectus.

In connection with this offering, we and Union Pacific are entering into a number of agreements. These include:

We and certain of our subsidiaries are entering into a Stock Purchase and Indemnification Agreement with Union Pacific. The Stock Purchase and Indemnification Agreement will provide for the consummation of the Acquisition on the terms described under “The Acquisition.” In addition, under the terms of the agreement, Overnite Corporation and its affiliates, including, Overnite Holding and its subsidiaries, on the one hand, and Union Pacific and its affiliates, on the other hand (each, an “indemnifying party”), will agree to indemnify the other and their respective directors, officers, employees, agents and representatives (each, an “indemnified party”) for certain costs or liabilities relating to, resulting from or arising out of:

The Stock Purchase and Indemnification Agreement also provides that we will use our reasonable efforts to obtain the release of Union Pacific from all guarantees, surety and performance bonds, letters of credit and other arrangements pursuant to which Union Pacific guarantees or secures any liability of ours, and will indemnify Union Pacific for any liabilities incurred under such guarantees, bonds, letters of credit and other arrangements, or costs incurred for the maintenance of such guarantees, bonds, letters of credit and other arrangements to the extent Union Pacific is not released thereunder. In the event we are unable to obtain the release of Union Pacific from any applicable guarantees, surety and performance bonds, letters of credit and other arrangements, Union Pacific will agree not to unilaterally terminate or withdraw the applicable guarantees, surety and performance bonds, letters of credit and other arrangements if that termination or withdraw would cause more than an insignificant liability to Overnite Corporation and its affiliates or result in a default under or violation of the terms of any agreement with a third party. However, as discussed below under “—Guarantee Arrangements by Union Pacific” and “—Compensation Arrangement Agreement,” Union Pacific has agreed to continue to guarantee certain of our obligations, and we will not be required to obtain a release of these guarantees or indemnify Union Pacific in respect of these guarantees under the terms of the Stock Purchase and Indemnification Agreement.

The Stock Purchase and Indemnification Agreement also provides that we will indemnify Union Pacific for any liabilities (and related costs) relating to benefits under, or resulting from administration of, our employee benefit plans and relating to the participation of our employees or former employees in such plans of Union Pacific. However, Union Pacific has agreed to indemnify us for any liabilities (and related costs) relating to Union Pacific’s administration of its employee benefit plans and relating to the participation of its employees or former employees. Specifically, with respect to the Union Pacific Executive Incentive Plan, we will indemnify Union Pacific for any liabilities (and related costs) relating to amounts payable as deferred compensation to our employees resulting from periods on and after consummation of this offering and Union Pacific will be responsible for amounts payable resulting from periods prior to consummation of this offering.

In the event that the underwriters’ over-allotment option is exercised in full, Union Pacific will sell in this offering 100% of the common stock of Overnite Corporation it will receive in the Acquisition. However, if the

underwriters’ over-allotment option is not exercised in full, Union Pacific will retain an equity interest in Overnite Corporation following the completion of this offering. In such an event, Union Pacific would not be able to sell any of the retained shares of common stock of Overnite Corporation without registration under the Securities Act or an exemption from these registration requirements. Accordingly, we have entered into a registration rights agreement with Union Pacific to provide it with certain registration rights relating to any shares of our common stock that Union Pacific does not sell in this offering (including pursuant to any exercise of the underwriters’ over-allotment option). Transferees of shares of our common stock from Union Pacific will also generally be entitled to the same rights under the registration right agreement.

Under the terms of the registration rights agreement, Union Pacific may request registration under the Securities Act of all or any portion of our shares of common stock covered by the registration rights agreement and we will be obligated to register such shares as requested by Union Pacific. Any such registration is referred to as a “demand registration”. Union Pacific will designate the terms of each offering effected pursuant to a demand registration, which may take the form of, among others:

Each demand registration that Union Pacific is entitled to effect must meet a certain minimum aggregate expected offering price. Further, the registration rights agreement will provide that if the demand registration is an underwritten public offering, we will only be required to include in the offering the maximum number of shares of our common stock that can be included without materially adversely affecting the marketability of the offering or market for our common stock.

We are not generally required to undertake a demand registration within 90 days of the effective date of a previous demand registration. Also, we have the right to postpone the filing or effectiveness of any demand registration for up to 90 days if in the good faith judgement of our General Counsel or board of directors such registration could reasonably be expected to have a material adverse effect on any proposal or plan by us to engage in certain material transactions. However, we may exercise this right of postponement only a limited number of times in any 12-month period.

We will generally have the right under the registration rights agreement to allow other parties, including us, to participate in any demand registration only if all of the securities Union Pacific proposes to include in such demand registration are so included.

In connection with any demand registration, the holders of a majority of the shares of our common stock to be included in the demand registration will have the right to select the investment bankers and managers, subject to our reasonable objection in certain circumstances, as well as any financial printer, solicitation and/or exchange agent and counsel for the offering of securities in respect of such demand registration. We will select our own outside counsel and independent auditors.

The registration rights agreement will also provide that whenever we propose to register any of our securities under the Securities Act for ourselves or others, subject to certain customary exceptions, we must provide prompt notice to Union Pacific and use our reasonable efforts to include in such registration all shares of our stock which Union Pacific requests to be included. Any such registration is referred to as a “piggyback registration”.

Under the terms of the registration rights agreement, if a piggyback registration is an underwritten primary offering on our behalf and the underwriters for the offering advise us that the total amount of securities to be included in the registration (including shares to be included in the offering by Union Pacific or other holders of our common stock pursuant to piggyback registration rights) exceeds the amount which can be sold in the offering without materially adversely affecting the marketability of the offering or the market for our common stock, we will only be required to include in such registration:

Under the terms of the registration rights agreement, if a piggyback registration is being made on behalf of other holders of our securities and the underwriters for the offering advise us that the total amount of securities to be included in the registration (including shares to be included in the offering by Union Pacific or other holders of our common stock pursuant to piggyback registration rights) exceeds the amount which can be sold in the offering without materially adversely affecting the marketability of the offering or the market for our common stock, we will only be required to include in such registration:

In the event that a piggyback registration is an underwritten offering, the holders of a majority of the shares of our common stock to be included in such piggyback registration (pursuant to the registration rights agreement) have the right to reasonably object in certain circumstances to our selection of the investment banker or manager utilized in connection with the piggyback registration. In addition, the holders of a majority of the shares of our common stock to be included in the piggyback registration (pursuant to the registration rights agreement) will have the right to select one counsel for the holders of shares of common stock that are including shares in such piggyback registration. We will select our own outside counsel and independent auditors.

The registration rights agreement will contain customary provisions pursuant to which we may require holders of shares of common stock to suspend sales of securities pursuant to a shelf registration statement that we were required to file pursuant to the terms of the registration rights agreement. In addition, the registration rights agreement will contain customary provisions pursuant to which we will be prohibited from selling equity securities, or securities convertible into or exchangeable for such securities, during specified time periods before and after the effectiveness of a registration statement that we are required to file pursuant to the terms of the registration rights agreement.

The registration rights agreement will contain customary registration procedures, including with respect to the preparation and filing of registration statements with the SEC. In addition, the registration rights agreement will contain covenants pursuant to which we will be required to make reasonably available our senior management for road show presentations and, in connection with an underwritten offering, to enter into a customary underwriting agreement. The registration expenses incurred in connection with the registration rights agreement, including all filing fees, fees and expenses of compliance with securities and/or blue sky laws, financial printing expenses, fees and disbursements of custodians, transfer agents, exchange agents and

information agents and the fees and disbursements of our counsel and all independent certified public accountants, underwriters (excluding discounts and commissions) and other persons retained by us, will be paid by either us or the holders of our shares of common stock that have exercised registration rights.

Under the terms of the registration rights agreement, in connection with any registration effected pursuant to the registration rights agreement we will be required to indemnify the holders of our shares of common stock that have exercised registration rights and any underwriters against liabilities under the Securities Act, or to contribute to payments that such persons may be required to make in that respect.

The registration rights under the registration rights agreement will remain in effect with respect to any shares of our common stock until:

Union Pacific has agreed not to exercise its registration rights under the registration rights agreement without the prior written consent of Credit Suisse First Boston LLC and Morgan Stanley & Co. Incorporated for a period of 180 days after the date of this prospectus.

We are entering into a Services Agreement with Union Pacific, pursuant to which Union Pacific will continue to provide certain corporate and administrative services to us and our subsidiaries. These services will include financial reporting, auditing, employee benefits administration, insurance, tax and governmental relations. Charges for the services provided by Union Pacific through third parties will be based on the actual costs incurred. Charges for all other services will be based on fees negotiated with Union Pacific, which fees shall include a reasonable allocation of direct and indirect costs (including, without limitation, employee salaries, benefits and other costs) and be subject to good faith renegotiation each month if necessary. The Services Agreement may be terminated (1) by us at any time as to any service or part thereof on 30 days’ notice and (2) as to any or all services by Union Pacific after certain specified time periods following this offering on 30 days’ notice.

We are entering into a Computer Services Agreement with Union Pacific with respect to data center processing and other miscellaneous services. Pursuant to this Agreement, Union Pacific or its affiliates will continue to provide, or cause third party contractors to provide, us with data center processing services on a

dedicated mainframe in support of our business applications, including applications services and decision support services, and with other miscellaneous services including electronic data interchange (EDI), AutoFax and VAN (agilink) services and with office space for certain of our personnel located in St. Louis. Data center processing services will be provided until we relocate our St. Louis data center to our Richmond data center. The other services and office space will be provided for the initial term at rates negotiated with Union Pacific, and such term may be extended at our option.

We and our subsidiaries are entering into a Tax Allocation Agreement with Union Pacific to provide for: (1) the allocation and payment of taxes for periods during which we and our subsidiaries are included with Union Pacific and its subsidiaries in the same consolidated group for Federal income tax purposes or the same unitary returns for state tax purposes; (2) the allocation of responsibility for the filing of tax returns; (3) the conduct of tax audits and the handling of tax controversies; and (4) various tax indemnities and other related matters. For periods during which we and our subsidiaries are included in Union Pacific’s consolidated Federal income tax returns or state unitary tax returns (which periods are expected to end upon the closing this offering), we will be relieved of our requirement to pay to, or entitlement to receive from, Union Pacific any portion of the consolidated Federal income and or unitary state tax liability, benefit or credits. Union Pacific will retain all liability or benefit for consolidated Federal income tax and unitary state income tax for these periods. We will be responsible for our and our subsidiaries’ foreign and nonunitary state and local tax liabilities for all periods.

In connection with a restructuring of a lease financing of Overnite Transportation’s South Holland, Illinois intermodal facility, Union Pacific has entered into an Amended and Restated Guaranty Agreement, pursuant to which Union Pacific has guaranteed the full and prompt payment of all of the Liabilities (as defined therein) of Overnite Transportation and all reasonable expenses incurred to collect the Liabilities or to enforce the Amended and Restated Guaranty Agreement. For purposes of the Amended and Restated Guaranty Agreement, the term “Liabilities” includes all amounts payable by Overnite Transportation under the operative documents in the financing and all principal and interest and other sums at any time due and owing by Overnite Transportation under such operative documents, subject to a cap equal to the lesser of (1) the amounts that Overnite Transportation would have had to pay under the operative documents assuming that such documents were enforced in accordance with their terms (plus all actual and reasonable costs of enforcing the Amended and Restated Guaranty Agreement) and (2) $20,000,000 (plus all actual and reasonable costs of enforcing the Amended and Restated Guaranty Agreement). The Amended and Restated Guaranty Agreement provides that it shall be released and shall be of no further force and effect upon the earlier of (A) the expiration of the base term under the lease (provided that Overnite Transportation has satisfied all of its obligations under the operative documents) and (B) the satisfaction of certain conditions, including the preparation and delivery of audited financial statements of Overnite Transportation and its consolidated subsidiaries and the achievement of either a minimum consolidated tangible net worth requirement or certain financial ratios stated therein. In connection with the Acquisition, we and Union Pacific will enter into an agreement pursuant to which Union Pacific will continue to provide this guarantee following this offering.

We are entering into a Compensation Arrangement Agreement with Union Pacific pursuant to which Union Pacific will agree to take certain actions, including with respect to the waiver of employment requirements, the accelerated vesting of options and the guarantee of certain prior benefits, relating to specified benefits and awards earned by our employees under Union Pacific employee benefit plans prior to the Acquisition and this offering. The actions Union Pacific has agreed it will take, and which will be addressed in this agreement, are more fully described under the caption “Management.”

After this offering, there will be shares of common stock outstanding and no shares of preferred stock outstanding.

The following description summarizes information about our capital stock. This information does not purport to be complete and is subject to, and qualified in its entirety by reference to, the terms of our articles of incorporation and bylaws, which are included as exhibits to the registration statement of which this prospectus forms a part, and the provisions of applicable Virginia law, the state in which we are incorporated.

Voting. The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders. Holders of our common stock do not have cumulative voting rights in the election of directors.

Dividends. The holders of our common stock are entitled to receive dividends and other distributions as may be declared by our board, subject to the preferential rights of any outstanding preferred stock.

Other Rights. Subject to any preferential liquidation rights of holders of preferred stock that may be outstanding, upon our liquidation, dissolution or winding-up, the holders of our common stock are entitled to receive dividends on their shares of common stock out of assets legally available for distribution when, as and if authorized and declared by our board and to share ratably in our assets legally available for distribution to our shareholders.

The holders of our common stock do not have preemptive rights or preferential rights to subscribe for shares of our capital stock.

Upon closing of this offering, all of the outstanding shares of our common stock will be validly issued, fully paid and nonassessable.

Our articles of incorporation authorize our board to designate and issue from time to time one or more series of preferred stock without shareholder approval. Our board may fix and determine the preferences, limitations and relative rights of each series of preferred stock issued. Because the board has the power to establish the preferences and rights of each series of preferred stock, it may afford the holders of any series of preferred stock preferences and rights, voting or otherwise, senior to the rights of holders of our common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock upon the rights of holders of common stock until our board determines the specific rights of the holders of preferred stock. However, the effects might include:

Certain Anti-Takeover Provisions of Virginia law, our Articles of Incorporation and our Bylaws

Virginia law, our articles of incorporation and our bylaws contain provisions that may have the effect of impeding the acquisition of control of us by means of a tender offer, a proxy contest, open market purchases or otherwise in a transaction not approved by our board. These provisions are designed to reduce, or have the effect of reducing, our vulnerability to coercive takeover practices and inadequate takeover bids.

Virginia law contains provisions governing affiliated transactions. In general, these provisions prohibit a Virginia corporation from engaging in affiliated transactions with any holder of more than 10% of any class of its outstanding voting shares (an “interested shareholder”) for a period of three years following the date that such person became an interested shareholder unless:

Affiliated transactions subject to this approval requirement include mergers, share exchanges, material dispositions of corporate assets not in the ordinary course of business, any dissolution of the corporation proposed by or on behalf of an interested shareholder or any reclassification, including reverse stock splits, recapitalizations or mergers of the corporation with its subsidiaries, which increases the percentage of voting shares owned beneficially by an interested shareholder by more than 5%.

Virginia law also contains provisions relating to control share acquisitions, which are transactions causing the voting strength of any person acquiring beneficial ownership of shares of a Virginia public corporation to meet or exceed certain threshold percentages (20%, 33¹/3% or 50%) of the total votes entitled to be cast for the election of directors. Shares acquired in a control share acquisition have no voting rights unless:

The acquiring person may require that a special meeting of the shareholders be held within 50 days of the acquiring person’s request to consider the grant of voting rights to the shares acquired in the control share acquisition. If voting rights are not granted and the corporation’s articles of incorporation or bylaws permit, the acquiring person’s shares may be repurchased by the corporation, at its option, at a price per share equal to the acquiring person’s cost. Virginia law grants dissenters’ rights to any shareholder who objects to a control share acquisition that is approved by a vote of disinterested shareholders and that gives the acquiring person control of a majority of the corporation’s voting shares.

The board of directors of a Virginia corporation may adopt a bylaw providing that the control share provisions of Virginia law do not apply to acquisitions of the corporation’s shares. Our board has adopted a bylaw opting out of the control share acquisition provisions of Virginia law.

Number of Directors; Vacancies; Removal. Our articles of incorporation provide that the number of directors shall be between two and ten and that the number of directors within this range will be fixed in accordance with the bylaws. Our bylaws provide that, following this offering, the number of directors shall be two. We intend to increase the number of directors to eight within 90 days of this offering.

Our bylaws provide that any vacancies on the board may be filled by the affirmative vote of a majority of the remaining directors, though the number of remaining directors may be less than a quorum. Any vacancies created by an increase in the total number of directors may be filled by a majority vote of the board. Moreover, our articles of incorporation provide that directors may be removed only for cause. A shareholder, therefore, could be prevented from replacing our directors with shareholder nominees if the shareholder did not have cause to remove such directors.

Shareholder Meetings. Under our bylaws, only our chairman of the board, our president or a majority of our board may call a special meeting of shareholders.

Advance Notice of Nominations and Shareholder Business. Our bylaws establish advance notice procedures with respect to shareholder proposals and the nomination of persons for election as directors, other than nominations made by or at the direction of the board.

Preferred Stock. Our articles of incorporation authorize our board to establish one or more series of preferred stock and to determine, with respect to any series of preferred stock, the preferences, rights and other terms of such series. See “—Preferred Stock.” Under this authority, our board could create and issue a series of preferred stock with rights, preferences or restrictions that have the effect of discriminating against an existing or prospective holder of our capital stock as a result of such holder beneficially owning or commencing a tender offer for a substantial amount of our common stock. One of the effects of authorized but unissued and unreserved shares of preferred stock may be to render more difficult for, or discourage an attempt by, a potential acquiror to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management. The issuance of shares of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company without any action by our shareholders.

Limitation of Liability and Indemnification Matters. As permitted by Virginia law, our articles of incorporation provide that no director or officer shall be liable to us or our shareholders for monetary damages except for liability resulting from willful misconduct or a knowing violation of the criminal law or of any Federal or state securities laws.

Our articles of incorporation require us to indemnify any director or officer who was or is a party to a proceeding due to his or her status as a director or officer or who was or is serving at our request as a director, trustee, partner or officer of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. This indemnification covers all costs and expenses reasonably incurred by a director or officer. The board of directors, by a majority vote of a quorum of disinterested directors or, under certain circumstances, special legal counsel appointed by the board of directors, must determine that the director or officer seeking indemnification was not guilty of willful misconduct or a knowing violation of the criminal law. We have been informed that in the opinion of the SEC indemnification for liabilities under the Securities Act is against public policy and is unenforceable.

Prior to this offering, there has not been a public market for our common stock. Future sales of substantial amounts of our common stock in the public market, or the possibility of these sales, could adversely affect the trading price of our common stock and could impair our future ability to raise capital through the sale of our equity at a time and price we deem appropriate.

Upon completion of this offering, we will have outstanding shares of common stock. Of these shares, the shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by our “affiliates,” as defined in Rule 144 under the Securities Act, which would be subject to the limitations and restrictions described below.

Assuming the underwriters’ over-allotment option is not exercised, the remaining shares of common stock that will be held by Union Pacific will be “restricted securities,” as defined in Rule 144. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rules 144 and 144(k) promulgated under the Securities Act, which rules are summarized below. However, we will grant Union Pacific registration rights with respect to any shares it continues to hold after completion of this offering, as discussed under “Arrangements with Union Pacific Corporation—Registration Rights Agreement.”

Subject to the lock-up agreements described in “Underwriting” and the provisions of Rules 144 and 144(k), additional shares will be available for sale in the public market as follows:

All of these restricted securities will be eligible for sale in the public market, subject in some cases to the volume limitations and other restrictions of Rule 144, beginning upon expiration of the lock-up agreements described in “Underwriting”.

In general, under Rule 144 as currently in effect, beginning 90 days after this offering, a person (or persons whose shares are required to be aggregated), including an affiliate, who has beneficially owned shares of our common stock for at least one year is entitled to sell in any three-month period a number of shares that does not exceed the greater of:

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

In addition, a person who is not deemed to have been an affiliate of ours at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least two years, would be entitled to sell those shares under Rule 144(k) without regard to the manner of sale, public information, volume limitation or notice requirements of Rule 144. To the extent that our affiliates sell their shares, other than pursuant to Rule 144 or a registration statement, the purchaser’s holding period for the purpose of effecting a sale under Rule 144 commences on the date of transfer from the affiliate.

In connection with this offering, we are currently negotiating to enter into a new bank credit facility. The bank credit facility is expected to provide for aggregate commitments of $ , consisting of (1) a term loan facility of approximately $ and (2) a revolving loan facility of approximately $ , including a subfacility available for the issuance of letters of credit. Borrowings under the term loan facility will be used to pay a dividend to Union Pacific in connection with the Acquisition. The revolving loan facility will be available for working capital, capital expenditure, general corporate purposes and to support letters of credit.

We expect that Overnite Transportation will be the borrower under our new bank credit facility. Obligations under our new bank credit facility will be guaranteed by us and certain of our domestic subsidiaries.

We expect that borrowings under the term loan facility and revolving loan facility will bear interest, at our option, at either adjusted LIBOR or at the alternate base rate plus a spread. Outstanding letters of credit under the revolving loan facility are expected to be subject to a per annum fee equal to the applicable spread over adjusted LIBOR for revolving loans.

In connection with the new credit facility, we will be required to pay administrative fees, commitment fees, letter of credit issuance and administration fees and certain expenses, and to provide certain indemnities, all of which we believe will be customary for financings of this type.

We expect that we will be permitted to make voluntary prepayments on outstanding borrowings and reduce the commitments under the new bank credit facility in whole or in part, at our option, and that we will be required to prepay loans under the term loan facility in certain circumstances that are customary for financings of this kind.

The new bank credit facility will contain affirmative, negative and financial covenants and events of default customary for financings of this type.

The following describes the material U.S. Federal income and estate tax consequences of the purchase, ownership and disposition of common stock by a Non-U.S. Holder who holds the common stock as a capital asset. A “Non-U.S. Holder” is a person or entity that, for U.S. Federal income tax purposes, is (i) a non-resident alien individual, (ii) a foreign corporation or partnership, (iii) an estate, other than an estate the income of which is includible in gross income for U.S. Federal income tax purposes regardless of its source, or (iv) a trust that is not subject to the primary supervision of a court within the U.S. or the control of a U.S. fiduciary.

This discussion does not purport to be a comprehensive description of all aspects of U.S. Federal income taxes and does not address foreign, state and local consequences that could be relevant to Non-U.S. Holders in light of their personal circumstances. Special rules might apply to certain Non-U.S. Holders, such as controlled foreign corporations, passive foreign investment companies, foreign personal holding companies, corporations that accumulate earnings to avoid U.S. Federal income tax, and U.S. expatriates. Non-U.S. Holders should consult their own tax advisers to determine the U.S. Federal, state, local and other tax consequences that might be relevant to them.

If a partnership holds common stock, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partner in a partnership holding Common Stock, you should consult your tax adviser.

This discussion is based on the provisions of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, and U.S. Treasury regulations, rulings and judicial decisions as of the date of this offering. Those authorities are subject to change, possibly with retroactive effect. Except where noted, this discussion does not address any aspect of U.S. Federal gift or estate tax, or state, local or Non-U.S. tax laws.

You should consult your own tax adviser regarding the U.S. Federal, state, local and non-U.S. income and other tax consequences of holding and disposing of common stock.

Distributions on the common stock will constitute dividends for U.S. Federal income tax purposes to the extent of our current or accumulated earnings and profits as determined under U.S. Federal income tax principles. In general, dividends paid to you will be subject to withholding of U.S. Federal income tax at a 30% rate or a lower rate specified by an applicable income tax treaty. To claim the benefit of an applicable treaty, you will be required to satisfy certain certification and other requirements.

Dividends that are effectively connected with your conduct of a trade or business within the U.S. or, where a tax treaty applies, are attributable to a U.S. permanent establishment, are not subject to U.S. withholding tax. Instead, those dividends are subject to U.S. Federal income tax on a net income basis at applicable graduated individual or corporate rates. Certain certification and disclosure requirements must be complied with for effectively connected income to be exempt from withholding. If you are a foreign corporation, effectively connected dividends might be subject to an additional “branch profits tax” at a 30% rate or a lower rate specified by an applicable income tax treaty.

You will not be subject to U.S. Federal income tax on gain realized on a sale or other disposition of common stock unless (i) the gain is effectively connected with your conduct of a trade or business in the U.S., (ii) you are non-resident alien individual and are present in the U.S. for 183 or more days in the taxable year of the disposition and either (a) you have a “tax home” (as defined for U.S. Federal income tax purposes) in the U.S. or (b) the gain is attributable to an office or other fixed place of business maintained by you in the U.S., or

(iii) we are or have been a “U.S. real property holding corporation” within the meaning of Section 897(c)(2) of the Code at any time within the shorter of the five-year period preceding such disposition or your holding period for the common stock. We believe that we are not currently, and will not become, a U.S. real property holding corporation.

An individual Non-U.S. Holder who is treated as the owner of, or has made certain lifetime transfers of, an interest in the common stock will be required to include the value of that interest in his or her gross estate for U.S. Federal estate tax purposes and might be subject to U.S. Federal estate tax unless an applicable estate tax treaty provides otherwise.

We must report annually to you and the Internal Revenue Service the amount of dividends paid to you and the tax withheld from those dividends even if no withholding was required. Under the provisions of an applicable income tax treaty, copies of the information returns reporting dividends and withholding might also be made available to the tax authorities in the country in which you reside.

You will be subject to backup withholding on dividends paid to you unless applicable certification requirements are met. The backup withholding rate is currently 28%.

Payment of the proceeds of a sale of common stock within the U.S. or conducted through certain U.S.-related financial intermediaries is subject to information reporting and, depending on the circumstances, backup withholding unless you certify under penalties of perjury that you are a Non-U.S. Holder and the payer does not know or have reason to know that you are a U.S person, or you otherwise establish an exemption.

Any amounts withheld under the backup withholding rules will be allowed as a refund or credit against your U.S. Federal income tax liability provided the required information is furnished to the Internal Revenue Service.

Under the terms and subject to the conditions contained in an underwriting agreement dated , 2003, Union Pacific, the selling shareholder has agreed to sell to the underwriters named below, for whom Credit Suisse First Boston LLC and Morgan Stanley & Co. Incorporated are acting as representatives, the following respective numbers of shares of common stock:

The underwriting agreement provides that the underwriters are obligated to purchase all the shares of common stock in this offering if any are purchased, other than those shares covered by the over-allotment option described below. The underwriting agreement also provides that, if an underwriter defaults the purchase, commitments of non-defaulting underwriters may be increased or this offering may be terminated.

The selling shareholder has granted to the underwriters a 30-day option to purchase on a pro rata basis up to additional outstanding shares from it at the initial public offering price less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of common stock.

The underwriters propose to offer the shares of common stock initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per share. The underwriters and selling group members may allow a discount of $ per share on sales to other broker/dealers. After the initial public offering the underwriters may change the public offering price and concession and discount to broker/dealers.

The following table summarizes the compensation the selling shareholder will pay and the estimated expenses we will pay:

The representatives have informed us that the underwriters do not expect discretionary sales to exceed 5% of the shares of common stock being offered.

We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of Credit Suisse First Boston LLC and Morgan Stanley & Co. Incorporated for a period of 180 days after the date of this prospectus, except that we may issue, and grant options to purchase, shares of our common stock pursuant to the employee benefit plans described in this prospectus and the award of shares of our common stock to our employees in the manner disclosed in this prospectus.

Our officers, directors and Union Pacific have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or

exchangeable or exercisable for any shares of our common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Credit Suisse First Boston LLC and Morgan Stanley & Co. Incorporated for a period of 180 days after the date of this prospectus.

We and the selling shareholder have agreed to indemnify the underwriters against liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.

We have applied to list the shares of common stock on The Nasdaq National Market subject to official notice of issuance, under the symbol “OVNT.”

Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by a negotiation between us and the underwriters and will not necessarily reflect the market price of the common stock following this offering. The principal factors that will be considered in determining the public offering price will include:

We offer no assurances that the initial public offering price will correspond to the price at which the common stock will trade in the public market subsequent to this offering or that an active trading market for the common stock will develop and continue after this offering.

Some of the underwriters and their affiliates have provided, and may provide in the future, investment banking and other financial services for us, the selling shareholder and its affiliates in the ordinary course of business for which they have received and would receive customary compensation.

In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on The Nasdaq National Market or otherwise and, if commenced, may be discontinued at any time.

A prospectus in electronic format may be made available on the web sites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically. The representatives may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations.

The distribution of the common stock in Canada is being made only on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of common stock are made. Any resale of the common stock in Canada must be made under applicable securities laws which will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the common stock.

By purchasing common stock in Canada and accepting a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that

Under Ontario securities legislation, a purchaser who purchases a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of the shares, for rescission against us in the event that this prospectus contains a misrepresentation. A purchaser will be deemed to have relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for the shares. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for the shares. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us. In no case will the amount recoverable in any action exceed the price at which the shares were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we will have no liability. In the case of an action for damages, we will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the shares as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions.

All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

Canadian purchasers of common stock should consult their own legal and tax advisors with respect to the tax consequences of an investment in the common stock in their particular circumstances and about the eligibility of the common stock for investment by the purchaser under relevant Canadian legislation.

Certain legal matters with respect to the validity of the shares of common stock offered hereby will be passed upon for us by Hunton & Williams LLP, Richmond, Virginia. The underwriters have been represented by Cravath, Swaine & Moore LLP, New York, New York.

The consolidated financial statements as of December 31, 2001 and 2002 and for each of the three years in the period ended December 31, 2002, included in this prospectus have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein, and have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares to be sold in this offering. This prospectus does not contain all of the information set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the SEC. For further information about us and the shares to be sold in this offering, please refer to the registration statement. Statements contained in this prospectus as to the contents of any contract, agreement or other document referred to, are not necessarily complete, and in each instance please refer to the copy of the contract, agreement or other document filed as an exhibit to the registration statement, each statement being qualified in all respects by this reference.

You may read and copy all or any portion of the registration statement or any reports, statements or other information we file with the SEC at the public reference facility maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such material are also available by mail from the Public Reference Branch of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.

Please call the SEC at 1-800-SEC-0330 for more information on the public reference rooms. You can also find our SEC filings at the SEC’s website at http://www.sec.gov.

We have audited the accompanying consolidated statements of financial position of Overnite Holding, Inc. and subsidiaries (a wholly owned subsidiary of Union Pacific Corporation) (the “Company”) as of December 31, 2002 and 2001, and the related consolidated statements of income, changes in common shareholder’s equity, and cash flows for each of the three years in the period ended December 31, 2002. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 the companies as of December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America.

The accompanying Notes are an integral part of these Consolidated Financial Statements.

Overnite Holding, Inc. (the “Company”), through its primary operating subsidiaries, is a leading predominantly non-union provider of less than truckload (“LTL”) transportation service, offering a full spectrum of regional, inter-regional and long-haul services nationwide. The Company serves a diverse customer base through a network of 204 service centers located near metropolitan centers. The Company operates through two principal subsidiary companies, Overnite Transportation Company (“OTC”) and Motor Cargo Industries, Inc. (“Motor Cargo”). OTC operates on a nationwide basis and Motor Cargo operates primarily in the Western United States.

A summary of significant accounting policies consistently applied in the preparation of the accompanying Consolidated Financial Statements follows:

The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiary, Overnite Corporation (formed in 2001), which includes the consolidated financial results of OTC and Motor Cargo. The Company is a wholly owned subsidiary of Union Pacific Corporation (“UPC”). The Company, through UPC, acquired 99.7% of the outstanding stock of Motor Cargo on November 30, 2001, and, therefore, the Company’s results of operations and cash flows include Motor Cargo for the period November 30 to December 31, 2001, and all of 2002. The acquisition was completed on February 14, 2002, at which time the remaining 0.3% of the outstanding stock of Motor Cargo was acquired.

The Consolidated Financial Statements of the Company include estimates and assumptions regarding certain assets, liabilities, revenue and expenses and the disclosure of certain contingent assets and liabilities. Actual future results may differ from such estimates. Significant estimates include revenue recognition, claims and insurance accruals, health care, pension and other postemployment benefits, goodwill and intangible assets.

The Company considers all highly liquid investments with an original purchased maturity of three months or less to be cash equivalents. Cash overdraft positions are classified as a current liability.

The Company sells services and extends credit based on an evaluation of the customer’s financial condition, without requiring collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses.

Inventories consists of materials and supplies, principally fuel and equipment parts, carried at the lower of average cost or market.

Properties are carried at cost, including a fair value appraisal of the tangible property included as part of the acquisition of Motor Cargo. Provisions for depreciation are computed principally on the straight-line method based on estimated service lives of depreciable property. Service lives range from 10 to 40 years for buildings and improvements, six to 20 years for revenue equipment, five years for technology equipment and software, and five to 10 years for other transportation property. Gains or losses from asset sales are recognized in the year of disposal.

Tires purchased with revenue equipment are capitalized as a part of the cost of such equipment. Replacement tires are expensed when placed in service.

The cost of significant purchased software is capitalized and amortized over a five-year period. An obsolescence review of capitalized software is performed on a periodic basis.

Maintenance and repairs, which do not materially add to the value of the property, or appreciably prolong its useful life, are charged to expense as incurred.

As a result of the acquisition of Motor Cargo, the Company recognized $13.2 million in goodwill and $3.0 million in non-amortizable intangible assets. The initial valuation of intangible assets and the valuation of tangible property were determined by both the Company and independent appraisers engaged by the Company (see also Note 3). Goodwill and intangible assets will be tested for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company performed the required impairment testing on goodwill and intangible assets resulting from the Motor Cargo acquisition, which was based on Motor Cargo’s results of operations and fair value. There was no indication of impairment with respect to goodwill or intangible assets. The adoption of Financial Accounting Standard No. 142 “Goodwill and Other Intangible Assets” had no effect on the Company’s Consolidated Financial Statements since the Company had no goodwill or intangible assets subject to the new standard at the time of its adoption (see Note 3).

The Company reviews its long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the long-lived assets, the carrying value is reduced to the estimated fair value. During 2002, the Company’s impairment review resulted in an immaterial charge against income.

Operating revenue is recognized in accordance with Emerging Issues Task Force 91-9, “Revenue and Expense Recognition for Freight Services in Process.” For transactions where we are the sole service provider, we use the percentage of completion method, based upon average transit time. Expenses related to operating revenue are recognized as incurred.

We periodically contract with third party carriers to perform transportation services for our customers. When we are the primary obligor for these services, i.e. we are responsible for pricing, loss or damage and credit

risk, we record revenue gross for the entire amount billed to the customer, and operating expenses for amount paid to the third party carriers in accordance with Emerging Issues Task Force 99-19, “Reporting Revenue Gross as a Principal versus Net as an Agent.” When we are not the primary obligor for these transportation services, we record revenue net of the amounts paid to third party carriers. Completed but unpaid interline obligations are accrued for in the month in which the shipment was made.

The carrying value of the Company’s non-derivative financial instruments approximates fair value. The fair value of financial instruments is generally determined by reference to market values as quoted by recognized dealers or developed based upon the present value of expected future cash flows.

The Company periodically uses derivative financial instruments to manage risk related to changes in fuel prices. The Company does not enter into financial instruments for trading or speculative purposes.

At December 31, 2002, the Company’s self-insured retention for workers’ compensation is $1.0 million per claim; for cargo damage claims, $1.0 million per claim; for automobile liability, $5.0 million per claim; and for general liability, $250,000 per claim. At December 31, 2002, these self-insured retention arrangements were secured by $24.0 million in letters of credit which were unused. At December 31, 2001 the Company’s self-insured retention for workers’ compensation was $750,000 per claim; for cargo damage claims, $1.0 million per claim; for automobile liability, $2.0 million per claim; and generally liability, $250,000 per claim.

The Company estimates and accrues a liability for its share of final settlements using all available information including the services of third-party insurance claims administrators and actuaries to assist in establishing appropriate levels of reserve for each occurrence, based on the facts and circumstances and the Company’s history with respect to such claims. Expense depends upon actual loss experience and changes in estimates of future settlement amounts which have not been fully resolved. The Company provides for adverse loss developments in the period when new information becomes available.

The Company incurs certain employment-related expenses associated with pensions and postretirement benefits. In order to measure the expense associated with these benefits, management must make various estimates including discount rates used to value certain liabilities, assumed rates of return on plan assets used to fund these expenses, compensation increases, employee turnover rates, anticipated mortality rates and expected future health care costs.

The estimates used by management are based on the Company’s historical experience as well as current facts and circumstances. The Company uses third-party actuaries to assist management in properly measuring the expense associated with these benefits. Actual results that vary from the previously mentioned assumptions could have a material impact to the Consolidated Financial Statements.

At December 31, 2002, the Company participated in UPC’s stock-based employee compensation plans, which are described more fully in Note 9. UPC applies the recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related

interpretations in accounting for its plans. No stock-based employee compensation expense related to stock option grants is reflected in net income, as all options granted under UPC’s plans had an exercise price equal to the market value of the underlying common stock on the date of grant. Stock-based employee compensation expense related to restricted stock and other incentive plans is reflected in net income. The following table illustrates the effect on net income if the Company had applied the fair value recognition provisions of Financial Accounting Standards Board (“FASB”) Statement No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation.

Effective January 1, 2001, the Company adopted FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”) and FASB Statement No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities” (“FAS 138”). FAS 133 and FAS 138 require that the changes in fair value of all derivative financial instruments the Company uses for fuel hedging purposes be recorded in the balance sheet. In addition, to the extent fuel hedges are ineffective due to pricing differentials resulting from the geographic dispersion of the Company’s operations, income statement recognition of the ineffective portion of the hedge is required. Derivative instruments that do not qualify for hedge accounting require income statement recognition. The adoption of FAS 133 and FAS 138 on January 1, 2001 had no impact on the Company’s Consolidated Financial Statements.

The Company uses derivative financial instruments, in limited instances for purposes other than trading, to manage risk related to changes in fuel prices. Fuel costs are a significant portion of the Company’s total operating expenses. As a result of the significance of fuel costs and the historical volatility of fuel prices, the Company periodically use swaps, futures and/or forward contracts to mitigate the impact of adverse fuel price changes. However, the use of these instruments also limits future gains from favorable movements. The Company addresses market risk related to these instruments by selecting instruments whose value fluctuations highly correlate with the underlying item being hedged. Credit risk related to derivative financial instruments, which is minimal, is managed by requiring high credit standards for counterparties as well as periodic settlements.

The following is a summary of the Company’s outstanding derivative financial instruments at December 31, 2002 and 2001:

The fair value asset and liability positions of the Company’s outstanding derivative financial instruments at December 31, 2002 and 2001 were as follows:

Fuel hedging positions will be reclassified from accumulated other comprehensive gain to fuel expense over the life of the hedge as fuel is consumed. During 2003, the Company expects fuel expense to decrease by $789,000 from this reclassification.

The Company’s use of derivative financial instruments decreased the cost of fuel for the Company by $1.2 million in 2002, and had no effect on fuel expense in 2001 and decreased the cost of fuel by $2.3 million in 2000.

On November 30, 2001, UPC acquired 99.7% of the outstanding stock of Motor Cargo Industries, Inc., a Utah corporation by tender offer, pursuant to an Agreement and Plan of Merger. UPC offered to exchange for each share of Motor Cargo common stock, no par value per share at the election of the holder, either 0.26 shares of UPC common stock, par value $2.50 per share, or $12.10 in cash. The acquisition was completed on February 14, 2002.

The purchase price, including acquisition costs and assumed liabilities, was approximately $90.5 million. Fair value adjustments increased the recorded value of land by $6.7 million and buildings and improvements by $4.1 million. Fair value adjustments increased the recorded value of the pension obligations by $1.7 million and deferred tax liabilities by $4.9 million. The Company has goodwill in the amount of $13.2 million and an indefinite-lived intangible asset related to the Motor Cargo brand name in the amount of $3.0 million. The preliminary estimate of goodwill as of December 31, 2001 of $13.9 million was adjusted as information relating to the fair value of assets and liabilities was determined with the assistance of independent appraisers and actuaries.

The Company uses the “management approach” to determine reportable segments. This approach focuses on financial information that management uses to make decisions about operations, investment, and deployment of human resources. Management uses operating revenue, operating income and operating statistics compared to budgets and prior period results to evaluate performance.

All operations of the Company experience intense service and price competition from both regional and national motor carriers. Beginning with the acquisition of Motor Cargo, the Company operated in two reportable segments: OTC and Motor Cargo. These are separate legal entities that are managed from an operations perspective separately, and each has retained its own marketing identity and human resource policies.

No single customer or group of affiliated customers accounted for 10% or more of consolidated operating revenue. Consolidated operating revenue from shipments with a destination outside the United States amounted to $24.4 million in 2002 and $19.7 million in 2001.

The OTC segment includes the LTL and closely related truckload operations of OTC, operating as a regional carrier with long-haul capabilities, with a network of 170 service centers throughout the United States. This segment serves all 50 states, Canada, Mexico, the U.S. Virgin Islands, Puerto Rico and Guam and transports a variety of products, including machinery, tobacco, textiles, plastics, electronics and paper products.

During 2002, OTC continued to oppose the efforts of the International Brotherhood of Teamsters (“Teamsters”) to unionize OTC service centers. On February 11, 2002, the United States Court of Appeals for the Fourth Circuit, sitting as a full panel, refused to enforce four bargaining orders issued by the National Labor Relations Board (“NLRB”) that would have required OTC to bargain with the Teamsters, even though the Teamsters lost secret ballot elections. Subsequently, the NLRB moved for a judgment against itself on seven other bargaining orders it had issued, and the Fourth Circuit entered that judgment.

On October 11, 2002, the NLRB’s General Counsel dismissed a charge the Teamsters had filed in August 2001 alleging that OTC had been bargaining in bad faith. On October 24, 2002, the Teamsters ended a national strike they had called against OTC three years earlier. The Teamsters had become the bargaining representative of the employees at 26 of OTC’s 170 service centers, but the employees at 17 of these locations recently have voted to decertify the Teamsters, and the NLRB has officially approved the votes in 14 of those locations. Decertification petitions are pending at four other service centers. Only a single representation petition currently is pending, but due to strike violence charges pending against the Teamsters, the NLRB has blocked the Teamsters’ efforts to precipitate an election. The Teamsters currently represent approximately 10% of OTC’s 12,534 employees. OTC has not reached any collective bargaining agreement with the Teamsters.

Motor Cargo is a regional LTL carrier operating through 34 service centers, providing transportation services within the Western United States, transporting a variety of products, including consumer goods, packaged foodstuffs, electronics, apparel, hardware and industrial goods. Motor Cargo also provides warehousing and logistics services.

Employees at two Motor Cargo service centers located in North Salt Lake, Utah and Reno, Nevada, representing approximately 11% of Motor Cargo’s total work force of 1,826 employees are covered by two separate collective bargaining agreements with unions affiliated with the Teamsters. Although the agreements cover most of the employees at these two facilities, less than half of these covered employees are actual members of unions. The two agreements exclude any pension requirements and while both include health care coverage, only the contract at Reno requires the employees to be included.

The following tables reflect asset information as of December 31, 2002 and 2001, and capital expenditures and depreciation expense for the periods ended December 31, 2002 and 2001. Motor Cargo was consolidated as of November 30, 2001, and therefore, depreciation expense and capital expenditures include a full year of activity during 2002 and one month of activity during 2001.

The following table reflects operating segment information of the Company, as well as a reconciliation of segment information to the Company’s consolidated operating revenue, operating income and net income for the years ended December 31, 2002 and 2001. Motor Cargo results include a full year in 2002 and the one month period ended December 31, 2001:

The major property accounts at cost at December 31, 2002 and 2001 were as follows:

The major accumulated depreciation accounts at December 31, 2002 and 2001 were as follows:

The Company leases certain equipment and other property. Future minimum lease payments for operating leases with initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2002 were as follows:

Rent expense for operating leases with terms exceeding one month were $19.2 million, $14.1 million and $13.9 million in 2002, 2001 and 2000, respectively.

The Company is included in the consolidated income tax return of UPC and subsidiaries. The consolidated income tax liability is allocated among UPC and its subsidiaries on the basis of their separate contributions to the consolidated income tax liability, with the benefit of tax losses and credits utilized in consolidation allocated to the individual company generating such losses and credits.

Components of income tax expense for the years ended December 31, 2002, 2001 and 2000 were as follows:

Deferred tax assets (liabilities) were comprised of the following at December 31, 2002 and 2001:

The Company has a deferred state tax asset of $5.7 million reflecting the benefits of $131.3 million of state net operating loss carryforwards. The net operating loss carryforwards expire between 2003 and 2022. The Company does not expect to realize this entire deferred tax asset, and has provided a valuation allowance of $5.4 million for 2002 and $2.8 million for 2001.

Except for the state net operating loss carryforwards for which a valuation allowance has been recorded, the Company believes it will realize all of its deferred tax assets.

During 2002, the Company made a payment of $35 million to UPC in full satisfaction of the Company’s federal and certain state income tax liabilities for tax years 1986 through 1989 under a tax allocation agreement between UPC and the Company. This liability was accrued for as of December 31, 2001. The payment of this liability resulted in a $35 million increase in the Company’s overall deferred tax asset.

A reconciliation between the statutory and effective tax rates for the years ended December 31, 2002, 2001, and 2000 is as follows:

During 2002, the Company made considerable progress on a number of income tax examination issues for prior tax years. All of the Company’s tax issues relating to 1990 through 1994, as well as some issues for 1995 through 1998, have now been substantially resolved. Part of this resolution permitted a portion of UPC’s 1986 Overnite acquisition costs to become tax deductible, resulting in a decrease in the Company’s income tax expense of $33.7 million.

All federal income tax years prior to 1990 are closed. The tax years 1990 and later are open, with all issues for 1990 through 1994 resolved. The tax years 1995 through 1998 are currently under examination by the Internal Revenue Service.

The Company believes it has adequately provided for federal and state income taxes.

Benefit Summary—The Company provides defined benefit pension income to eligible employees of OTC and Motor Cargo. OTC maintains both qualified and non-qualified (supplemental) pension plans, two defined contribution plans (thrift plans) and a postretirement health and life insurance plan for eligible employees. Motor Cargo provides a qualified defined benefit retirement income plan and a defined contribution plan (thrift plan) to eligible employees.

Funding and Benefit Payments—At OTC, the qualified and non-qualified pension benefits are based on years of service and the highest compensation during any five consecutive calendar years of employment. These plans cover substantially all OTC employees. Employees are vested after five years of service, or at age 65. The qualified plans are funded based on the Projected Unit Credit actuarial funding method and are funded at not less than the minimum funding standards set forth in the Employee Retirement Income Security Act of 1974, as amended. OTC provides two thrift plans under which employees are eligible to defer a portion of their compensation and currently matches 50% of employee deferrals up to 7% of employee compensation, for a maximum match of 3.5%. Employees are eligible to participate at date of hire, and company-matching

contributions begin after one year of service. Employees vest completely and immediately with the initial company matching contribution. The plan includes a provision whereby the achievement of certain financial targets could result in the matching contributions increasing to 75% or 100% of employee contributions, up to 7%. OTC matching contributions were approximately $9.5 million, $9.1 million and $8.6 million for the years ended December 31, 2002, 2001 and 2000, respectively. OTC also provides medical and life insurance benefits on a cost-sharing basis for qualifying retired employees. These costs are funded as incurred.

Motor Cargo provides a defined benefit pension plan covering substantially all of its employees. The benefits are based on years and hours of service. A participant is fully vested after five years of service. Motor Cargo also provides a thrift plan for its employees. Employees of Motor Cargo who have completed six months of service are eligible to participate in the plan. Under the plan, Motor Cargo employees are allowed to make contributions of between one to 15 percent of their annual compensation, and Motor Cargo matches 25% of deferrals, up to six percent of the employee’s annual compensation, with discretionary increases based on the attainment of income targets each year. The participants become fully vested in the Company matching contributions after seven years of service. Motor Cargo matching contributions were approximately $640,000 for the year ended December 31, 2002. There was no contribution for the one-month ended December 31, 2001.

The following illustrates the change in the Company’s projected benefit obligation for the years ended December 31, 2002 and 2001:

Changes in the Company’s benefit plan assets are summarized as follows for the years ended December 31, 2002 and 2001:

The components of funded status of the benefit plans for the years December 31, 2002 and 2001 were as follows:

At December 31, 2002 and 2001, $10.2 million and $7.5 million, respectively, of the total pension and of the other postretirement liability was classified as a current liability.

The Company decreased its assumed rate of return on pension plan assets, during 2002, from 10% to 9%. This assumption change resulted in an increase to 2002 pension expense of $5.3 million. During 2002, actual asset returns for the Company’s pension plans were adversely impacted by continued deterioration in the equity markets. The actual return on pension plan assets was approximately negative 10.0% in 2002. During the same time, corporate bond yields, which are used in determining the discount rate for future pension obligations, continued to decline. As a result of negative asset returns and lower discount rates, the Company was required to recognize an additional minimum pension liability.

The liability was recorded as an $83.9 million after-tax reduction to shareholder’s equity as part of accumulated other comprehensive income. The equity reduction would be restored to the balance sheet in future periods when the fair value of plan assets exceeds the accumulated benefit obligations. Recognition of this reduction to equity does not affect net income or cash flow in 2002.

The interest rate and asset return environment has significantly affected the funded status of the Company’s pension plans. Although no minimum funding was required in 2002, 2001, or 2000, the Company, through its OTC subsidiary, voluntarily contributed $125 million to the OTC pension plan during 2002. Motor Cargo made quarterly contributions to its pension plan totaling $300,000 during 2002, and the Company contributed an additional $1.2 million to the Motor Cargo pension plan during 2002. The Company funded its contributions through an intercompany advance from UPC. Future contributions are dependent on asset returns, current discount rates and a number of other factors, such as employee demographics and pension plan provisions.

Amounts recognized for the benefit plan liabilities in the consolidated statements of financial position for December 31, 2002 and 2001 consisted of:

The components of the Company’s net periodic pension and other postretirement benefit cost for the years ended December 31, 2002, 2001 and 2000 were as follows:

As of December 31, 2002 and 2001, approximately 34% and 32%, respectively, of the funded plans’ assets were held in fixed-income and short-term securities, with the remainder in equity securities.

The weighted-average actuarial assumptions for the years ended December 31, 2002, 2001 and 2000 were as follows:

Assumed health care cost trend rates have a significant effect on the amount reported for health care plans. A one-percentage point change in the assumed health care cost trend rates would have the following effects on other postretirement benefits:

The Company participates in the UPC stock incentive programs. UPC and the Company apply APB Opinion No. 25 and related interpretations in accounting for UPC’s stock plans. Employees of the Company have 724,570 options to purchase UPC stock outstanding under the 1993 Stock Option and Retention Stock Plan (1993 Plan). There are 143,937 UPC retention shares and stock units (the right to receive shares of common stock) that were granted to Company employees under the 1993 Plan that will vest over the next two years. UPC no longer grants options or awards of restricted stock under the 1993 Plan.

UPC adopted the Executive Stock Purchase Incentive Plan (ESPIP) effective October 1, 1999, in order to encourage and facilitate ownership of UPC common stock by officers and other key executives of UPC and its subsidiaries. Under the ESPIP, Company employees eligible to participate purchased a total of 110,000 shares of UPC common stock with the proceeds of 6.02% interest-bearing, full recourse loans from UPC. Loans to these Company participants at December 31, 2002 totaled $5.1 million and have a final maturity date of January 31, 2006. Deferred cash payments were to be awarded to the participants to repay interest and the loan principal if certain performance and retention criteria were met within a 40-month period ending January 31, 2003. Dividends paid on the purchased shares were originally assigned to UPC to offset the accrued interest on the loan balance until March 2001 when the first performance criterion was satisfied and, accordingly thereafter, the dividends on the purchased shares were paid directly to the participants. Satisfaction of the first performance criterion also entitled participants to receive a cash payment equal to the net accrued interest on the outstanding principal balance of the loans.

Satisfaction of the second performance criterion, in December 2002, entitled Company participants to receive a cash payment equal to one-third of the outstanding principal balance of their loan, and satisfaction of the retention criterion of continued employment with UPC until January 31, 2003, entitled Company participants to receive an additional cash payment equal to one-third of the outstanding principal balance of their loan. Thus, on January 31, 2003, participants received cash payments, equal to two-thirds of the outstanding principal balance of their loans, plus the net accrued interest. The remaining balance of the loan is payable in three equal installments on January 31, 2004, January 31, 2005 and January 31, 2006. The cost associated with the ESPIP retention criterion and the second performance criterion was amortized to expense over the 40-month period. The cost associated with the ESPIP first performance criterion was expensed over the life of the loan.

In November 2000, UPC adopted the 2001 Long Term Plan (LTP). Employees of the Company were awarded UPC retention shares or retention stock units and cash awards subject to the attainment of certain performance targets and continued employment through January 31, 2004. The LTP performance criteria include three year (for fiscal years 2001, 2002 and 2003) cumulative earnings per share and stock price targets. Under the LTP, no performance retention stock units were issued during 2001 to employees of the Company and 79,375 performance retention shares and stock units were issued at a weighted-average fair value of $49.96 to employees of the Company during 2002. The cost of the LTP is expensed over the performance period, ending January 31, 2004.

The Union Pacific Corporation 2001 Stock Incentive Plan (2001 Plan) was approved by the shareholders of UPC in April 2001. The 2001 Plan reserved 12,000,000 shares of UPC common stock for issuance to eligible employees of UPC and its subsidiaries in the form of non-qualified options, incentive stock options, retention shares, stock units and incentive bonus awards. As of December 31, 2002, there are 104,178 retention shares and stock units and 197,300 options outstanding under the 2001 Plan, for employees of the Company.

UPC’s plans provide for awarding retention shares of UPC common stock or stock units to eligible employees. These awards are subject to forfeiture if employment terminates during the prescribed retention period, generally three or four years, or, in some cases, if a certain prescribed stock price or other financial criteria are not met. During the year ended December 31, 2002, 103,178 retention shares, stock units and restricted shares were issued to employees of the Company at a weighted-average fair value of $58.74. During 2001, 45,613 retention shares, stock units and restricted shares were issued to employees of the Company at a weighted-average fair value of $49.89. During 2000, 24,249 retention shares, stock units and restricted shares were issued to employees of the Company at a weighted-average fair value of $41.17. The cost of retention and restricted awards is amortized to expense over the retention period.

During the years ended December 31, 2002, 2001 and 2000, the Company expensed $3.8 million, $2.8 million and $1.9 million, respectively, related to the incentive plans described herein.

Stock options are granted with an exercise price equal to the fair market value of UPC’s common stock as of the date of the grant. All outstanding options have a 10-year term and are generally exercisable one to two years after the date of the grant. A summary of the stock options issued under the 1993 Plan and the 2001 Plan, and changes during the years ending December 31 are as follows:

The following table summarizes information about outstanding UPC stock options held by employees of the Company as of December 31, 2002:

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model, with the following weighted-average assumptions for options granted in 2002, 2001 and 2000, respectively: risk-free interest rates of 4.4%, 4.3% and 5.1%; dividend yield of 1.3%, 1.4% and 1.6%; expected lives of five years, four years and four years; and volatility of 28.8%, 29.5% and 31.4%.

Unasserted Claims—There are various claims and lawsuits pending against the Company. It is not possible at this time for the Company to determine fully the effect of all unasserted claims on its consolidated financial condition, results of operations or liquidity; however, to the extent possible, where unasserted claims can be estimated and where such claims are considered probable, the Company has recorded a liability. The Company does not expect that any known lawsuits, claims, environmental costs, commitments, contingent liabilities or guarantees will have a material adverse effect on its consolidated financial condition, results of operations or liquidity.

Environmental—The Company is also subject to federal, state and local environmental laws and regulations, pursuant to which it is currently participating in the investigation and remediation of numerous sites. For environmental sites where remediation costs can be reasonably determined, and where such remediation is probable, the Company has recorded a liability. At December 31, 2002 and 2001, the Company had accrued $882,000 and $904,000, respectively, for estimated future environmental costs based on the most current information available and believes it is reasonably possible that actual environmental costs could differ from such estimate.

Variable Interest Entity—On October 31, 2000, the Company, through OTC, entered into agreements with a variable interest entity (“Lessor”) in order to finance and lease the expansion of a service center in South Holland, Illinois. The lease covering the expansion was executed during the fourth quarter of 2000.

The cost to expand the facility, including capitalized interest, was $13.2 million. OTC was the construction agent for the Lessor during the construction period and has guaranteed the entire obligation under this lease. OTC has leased the facilities for an initial term of five years with provisions for renewal for an extended period subject to agreement between OTC and the Lessor. The Company’s lease payments to the Lessor are sufficient to provide a return on the Lessor’s investment. At any time during the lease, OTC may, at its option, purchase the facilities at approximately the amount expended by the Lessor. If OTC elects not to purchase the building or renew the lease, the building would be returned to the Lessor for remarketing, and OTC has guaranteed a residual value equal to 85% of the total construction related costs. If OTC elects not to renew the lease or purchase the building, the guarantee will be approximately $11.2 million. Annual lease payments for the facility are estimated to be $720,000 for the next four years and $180,000 in the three-month period of the final year, subject to the effect of interest rate changes.

OTC has committed to a plan to construct a service center in the Newburg, New York area, and has completed the preliminary environmental, architectural, geological and regulatory reviews and approvals. Final approval by the state is expected, which will allow construction to begin in 2003, with expected occupancy in 2004. The estimated cost to purchase the land is $1.7 million, and if that commitment is approved, the total cost to construct the new facility would be an additional $5.7 million.

Motor Cargo has $2.0 million available for borrowing under a secured revolving line of credit for letters of credit and overdraft protection that is collateralized by assets. Borrowings mature on August 15, 2003 and bear interest at the lender’s prime lending rate less 0.25%. This facility had no outstanding balance as of December 31, 2002.

Advances to and from UPC as parent have accrued interest at a 7.5% annual interest rate during 2002, 2001 and 2000. The Company had a net receivable from UPC of $163.2 million and $219.4 million as of December 31, 2002 and 2001, respectively, principally the result of cash advanced to UPC in excess of that needed to meet the capital and operating expense requirements of the Company.

UPC performs certain adminisitrative functions on behalf of the Company. The estimated cost of these services, which are immaterial, have been included in the Company’s Consolidated Financial Statements.

In the normal course of business, the Company and UPC complete transportation arrangements for each other’s customers and bill each other in accordance with intermodal agreements and other contracts, at

commercial terms that are equitable to all parties. Both UPC and the Company have invested resources to improve the efficiency of these services, to the benefit of each other’s ultimate customer. These intercompany transactions included in the Company’s operating revenue amounted to $5.4 million, $5.3 million and $3.9 million for the years ended December 31, 2002, 2001 and 2000, respectively.

OTC provides a savings plan for its employees. Deposits by employees are made through payroll withholding and other cash deposits. Employee accounts earn 6.0% interest, compounded monthly. There are no minimum balance or minimum contribution requirements, and the cost of administering the savings plan is borne by OTC. The employee accounts are not insured by the Company or any other party, and OTC reserves the right to amend or discontinue the plan at any time.

In June 2001, the FASB issued Statement No. 143, “Accounting for Asset Retirement Obligations” (“FAS 143”). FAS 143 requires the Company to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. FAS 143 is effective for the Company’s fiscal year beginning January 1, 2003. Management believes that the financial impact of FAS 143 will have on the Company’s Consolidated Financial Statements will not be significant.

In August 2001, the FASB issued Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“FAS 144”). FAS 144 replaces FASB Statement No. 121, “Accounting for the Impariment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of”. FAS 144 requires that long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. It also broadens the definition of discontinued operations. FAS 144 was effective for the Company’s fiscal year beginning January 1, 2002. The adoption of FAS 144 had no significant effect on the Company’s Consolidated Financial Statements.

In June 2002, the FASB issued Statement No. 146, “Accounting for the Costs Associated with Exit or Disposal Activities” (“FAS 146”). FAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred and is effective for exit or disposal activities that are initiated after December 31, 2002. Under previously issued guidelines, a liability for an exit activity was recognized at the date of an entity’s commitment to an exit plan. This statement also establishes that fair value is the objective for initial measurement of the liability. Management believes the financial impact that FAS 146 will have on the Company’s Consolidated Financial Statements will not be significant.

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 elaborates and clarifies the disclosure requirements for loan guarantees and standby letters of credit, and clarifies the accounting recognition of an initial liability for the fair value (or market value) of obligations assumed under these types of guarantees. FIN 45 is effective for guarantees issued or modified after December 31, 2002, and the disclosure requirements are effective for financial statements for periods ending after December 15, 2002. Management believes the financial impact that FIN 45 will have on the Company’s Consolidated Financial Statements will not be significant.

In December 2002, the FASB issued Statement No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure” (“FAS 148”). FAS 148 provides alternative methods of transition for voluntary changes to the fair value based method of accounting for stock-based employee compensation, and amends the disclosure requirements of existing authorities. The Company currently discloses the effects of stock-based employee compensation, and has not made a decision on whether to voluntarily change to this alternative accounting principle.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”). FIN 46 requires the consolidation of an entity when a company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both. The consolidation requirements apply to the Company in the first interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. As described in Note 10 to the Consolidated Financial Statements, OTC has entered into an agreement with a variable interest entity to finance and lease the expansion of a service center, which falls within the guidance of FIN 46. In accordance with FIN 46, OTC will consolidate, restructure or refinance the agreement prior to July 1, 2003.

On August 4, 2003, UPC announced that it intended to sell its entire interest in the Company through an initial public offering. In order to facilitate this offering, immediately prior to the consummation of this offering, Overnite Corporation, a newly formed corporation, will acquire from UPC all of the outstanding common stock of the Company. In exchange, Overnite Corporation will issue to UPC (1) all of its outstanding common stock and (2) a $1.0 million promissory note to be payable by Overnite Corporation six months following the date of consummation of the transaction. In addition, subsequent to this transaction but immediately prior to the consummation of the offering, the Company will pay to UPC a dividend consisting of $128.0 million in cash and the forgiveness of the Company’s net intercompany advances to UPC as of the date of the transaction, which amounted to $170.4 million as of March 31, 2003.

The interim consolidated financial statements are unaudited and reflect all adjustments (consisting only of normal and recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained herein. The results of operations for the three months ended March 31, 2003 are not necessarily indicative of the results for the entire year ending December 31, 2003.

The Company’s derivative financial instruments, which were used to manage risk related to changes in fuel prices, expired on March 31, 2003.

Fuel hedging positions were reclassified from accumulated other comprehensive gain to fuel expense over the life of the hedge as fuel is consumed. During the first three months of 2003, the Company’s fuel expense decreased by $1.1 million from the hedge activity. There was no hedge activity in the first three months of 2002. The Company may enter into swaps, futures and/or forward contracts to mitigate the impact of adverse fuel price changes in the future.

The Company uses the “management approach” to determine reportable segments. This approach focuses on financial information that management uses to make decisions about operations, investment and deployment of human resources. Management uses operating revenue, operating income and operating statistics compared to budgets and prior period results to evaluate performance.

Motor Cargo is a regional LTL carrier operating through 35 service centers, providing transportation services within the Western United States, transporting a variety of products, including consumer goods, packaged foodstuffs, electronics, apparel, hardware and industrial goods. Motor Cargo also provides warehousing and logistics services.

NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following tables reflect asset information as of March 31, 2003 and December 31, 2002, and capital expenditures and depreciation expense for the periods ended March 31, 2003 and 2002:

The following table reflects operating segment information of the Company’s consolidated operating revenue, operating income and net income for the periods ended March 31, 2003 and 2002:

Advances to and from UPC as parent accrue interest at a 7.5% annual interest rate during 2003 and 2002. The Company had a net receivable from UPC of $170.4 million and $163.2 million as of March 31, 2003 and December 31, 2002, respectively, resulting from cash advanced to UPC in excess of that needed to meet Company’s immediate cash needs. The increase in the receivable balance is net of $20.0 million of contributions to the Company pension plans in the first three months of 2003.

NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

UPC performs certain administrative functions on behalf of the Company. The estimated cost of these services, which are immaterial, have been included in the Company’s Consolidated Financial Statements.

In the normal course of business the Company and UPC complete transportation arrangements for each other’s customers and bill each other in accordance with intermodal agreements and other contracts, at commercial terms that are equitable to all parties. Both UPC and the Company have invested resources to improve the efficiency of these services, to the benefit of each other’s ultimate customer. During the period ended March 31, 2003 and 2002, these intercompany transactions included in the Company’s operating revenue amounted to $1.1 million and $1.5 million, respectively.

During the first three months of 2003 the Company made a voluntary contribution to the OTC retirement plan in the amount of $20 million.

As described in Notes 1 and 9 to the Consolidated Financial Statements, the Company participates in UPC’s stock-based employee compensation plans. UPC and the Company account for those plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. No stock-based employee compensation expense, related to stock option grants, is reflected in net income as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. Stock-based employee compensation expense related to restricted stock and other incentive plans is reflected in net income. The following table illustrates the effect on net income if the Company had applied the fair value recognition provisions of FASB Statement No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation for the first three months ended March 31, 2003 and 2002:

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model, with the following weighted-average assumptions for options granted during the three months ended March 31, 2003 and 2002, respectively: risk-free interest rates of 2.9% and 4.4%; dividend yield of 1.5% and 1.3%; expected lives of 5 years and 5 years; and volatility of 28.4% and 28.8%.

There are various claims and lawsuits pending against the Company. It is not possible at this time for the Company to determine fully the effect of all unasserted claims on its consolidated financial condition, results of operations or liquidity; however, to the extent possible, where unasserted claims can be estimated and where such

claims are considered probable, the Company has recorded a liability. The Company does not expect that any known lawsuits, claims, environmental costs, commitments, contingent liabilities or guarantees will have a material adverse effect on its consolidated financial condition, results of operations or liquidity.

The Company is also subject to federal, state and local environmental laws and regulations, pursuant to which it is currently participating in the investigation and remediation of numerous sites. For environmental sites where remediation costs can be reasonably determined, and where such remediation is probable, the Company has recorded a liability. At March 31, 2003 and December 31, 2002, the Company had accrued $916,000 and $882,000, respectively, for estimated future environmental costs based on the most current information available and believes it is reasonably possible that actual environmental costs could differ from such estimate.

As described in Note 10 to the Consolidated Financial Statements, OTC has entered into an agreement to finance and lease the expansion of a service center in South Holland, Illinois. This agreement falls within new accounting guidance for the reporting of Variable Interest Entities. In accordance with this new guidance, OTC will consolidate the variable interest entity or restructure or refinance the agreement prior to July 1, 2003. The Company has not entered into any restructuring or refinancing agreements during the first three months of 2003.

The following unaudited pro forma consolidated financial statements have been derived from the historical consolidated financial statements of Overnite Holding, Inc. included elsewhere in this prospectus and give effect to the transactions described below.

The unaudited pro forma consolidated statements of income for the year ended December 31, 2002 and the three months ended March 31, 2003 give effect to the Acquisition and this offering as if each had occurred on January 1, 2002. The unaudited pro forma consolidated balance sheet as of March 31, 2003 gives effect to the Acquisition and this offering as if they had occurred on March 31, 2003.

In the Acquisition, which will occur immediately prior to this offering, Overnite Corporation, a newly formed corporation, will acquire from Union Pacific all of the outstanding common stock of Overnite Holding. In exchange, Overnite Corporation will issue to Union Pacific (i) all of its outstanding common stock and (ii) a $1 million promissory note payable by Overnite Corporation six months following the date of consummation of the Acquisition. In addition, subsequent to this transaction, but immediately prior to the consummation of the offering, Overnite Holding will pay to Union Pacific a dividend consisting of $128 million in cash and the forgiveness of our net intercompany advances to Union Pacific as of the date of the Acquisition, which amounted to approximately $170 million as of March 31, 2003. The cash portion of this dividend will be payable from the proceeds of the initial borrowings under the term loan for a new bank credit facility.

The Acquisition has been structured so that Overnite Corporation and Union Pacific will be able to make elections under Section 338(h)(10) of the Internal Revenue Code, referred to as “Section 338 Elections,” to treat, for U.S. Federal income tax purposes, Overnite Corporation’s acquisition of Overnite Holding stock as a purchase of all of the assets of Overnite Holding and Overnite Transportation. A Section 338 Election will not be made for Motor Cargo Industries, Inc. As a result of the Section 338 Elections, the Federal income tax basis of the assets of Overnite Holding and Overnite Transportation (but not Motor Cargo) will be adjusted in accordance with applicable Treasury regulations to reflect their value at the Acquisition date. Overnite Corporation will be able to claim depreciation or amortization deductions for substantially all of the value of those assets.

Currently, our employees participate in various Union Pacific incentive and retention stock plans and our historical results of operations include the expense associated with these plans. These plans are subject to various vesting and service requirements. Immediately prior to the Acquisition and this offering, Union Pacific will waive the vesting and employment requirements under certain of these plans for our employees. As a result, one-time costs of approximately $ will be recorded by us in the period in which this offering is consummated. These one-time costs have not reflected in the adjustments in the pro forma consolidated financial statements and will not have a continuing effect on our financial results in future periods, except for the one-time charge associated with these costs. In addition, we have adopted an Incentive Compensation Plan. The expenses associated with this plan for future periods are not calculable at this time, and will not be calculable until grants or awards are made under the plan, but we do not expect these expenses to be materially different from the expenses we incur with respect to the current Union Pacific plans.

In connection with this offering, we also intend to award 20 shares of our common stock to each of our full-time employees and 10 shares of our common stock to each of our part-time employees who have been employed by us for at least twelve months before the completion of this offering. We expect to grant these awards before January 1, 2004. These shares will vest and become transferable immediately upon grant of the award. Based upon the number of full-time employees as of July 1, 2003 and part-time employees who were employed by us for at least twelve months before July 1, 2003, we anticipate awarding an aggregate amount of approximately 260,000 shares of common stock to these employees. This award will result in one-time costs of $ , which will be recorded in the period in which the awards are made. These one-time costs have not been included in the adjustments in the unaudited pro forma consolidated financial statements and will not have a continuing effect on our financial results in future periods, except for the one-time charge associated with these costs.

The following unaudited pro forma consolidated financial statements reflect the adjustments described in the accompanying notes and include all adjustments that, in our opinion, are necessary to present fairly the unaudited pro forma financial information. The pro forma adjustments are based upon available information and certain assumptions we believe are reasonable. The unaudited pro forma consolidated financial statements are presented for informational purposes only and do not purport to reflect what our results of operations or financial position actually would have been had the transactions reflected occurred on the dates indicated or to project our financial position as of any future date or our results of operations for any future period. The unaudited pro forma consolidated financial statements should be read in conjunction with the accompanying notes and our historical consolidated financial statements included elsewhere in this prospectus.

For purposes of the interest expense adjustments, we have assumed an interest rate in respect of borrowings under our new bank credit facility of % for the year ended December 31, 2002 and % for the three months ended March 31, 2003. Each 0.125% change in interest rates in respect of our new bank credit facility would change annual interest expense by $ .

Consolidated balance sheet adjustments reflect (i) the establishment of a $ current liability in respect of the promissory note issuable to Union Pacific in the Acquisition, (ii) the establishment of a $ non-current liability in respect of our initial borrowings under our new bank credit facility and (iii) the capitalization of $ in fees and expenses related to our new bank credit facility.

The following are the estimated expenses to be incurred in connection with the issuance and distribution of the securities registered under this Registration Statement, other than underwriting discounts and commissions. All amount shown are estimate except the Securities and Exchange Commission registration fee and the National Association of Securities Dealers, Inc. filing fee. Union Pacific has agreed to pay all fees and expenses of this offering.

The Virginia Stock Corporation Act (the “VSCA”) permits, and the Registrant’s articles of incorporation provide for the indemnification of its directors and officers in a variety of circumstances, which may include indemnification for liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Under sections 13.1-697 and 13.1-702 of the VSCA, a Virginia corporation generally is authorized to indemnify its directors and officers in civil and criminal actions if they acted in good faith and believed their conduct to be in the best interests of the corporation and, in the case of criminal actions, had no reasonable cause to believe that the conduct was unlawful. The Registrant’s articles of incorporation require indemnification of directors and officers with respect to certain liabilities and expenses imposed upon them by reason of having been a director or officer, except in the case of willful misconduct or a knowing violation of criminal law. The Registrant also carries insurance on behalf of its directors, officers, employees or agents that may cover liabilities under the Securities Act. In addition, the VSCA and the Registrant’s articles of incorporation eliminate the liability for monetary damages of a director or officer in a shareholder or derivative proceeding. This elimination of liability will not apply in the event of willful misconduct or a knowing violation of criminal law or any federal or state securities law. Sections 13.1-692.1 and 13.1-696 through 704 of the VSCA are incorporated into this paragraph by reference.

Immediately prior to the closing of the offering contemplated by this registration statement, the Registrant will undertake a transaction with Union Pacific Corporation, in which Union Pacific Corporation will transfer all of the outstanding common stock of its subsidiary Overnite Holding, Inc. to the Registrant in exchange for consideration that will include shares of common stock of the Registrant.

This transaction will not involve any underwriters, underwriting discounts or commission or, any public offering, and the Registrant believes that this transaction is exempt from the registration requirements of the Securities Act by virtue of Section 4(2) thereof. For additional information regarding this transaction, see the section entitled “The Acquisition” in the Prospectus.

(a) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(i) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective; and

(ii) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) The undersigned Registrant undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Pursuant to the requirements of the Securities Act of 1933 (the “Securities Act”), the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Richmond, Virginia, on August 4, 2003.

OVERNITE CORPORATION

By:		/S/ PATRICK D. HANLEY

		Name: Patrick D. Hanley Title: Senior Vice President and Chief Financial Officer

David M. Carter, Esq.		Kris F. Heinzelman, Esq.
Hunton & Williams LLP		Cravath, Swaine & Moore LLP
Bank of America Plaza		Worldwide Plaza
600 Peachtree Street, N.E.		825 Eighth Avenue
Atlanta, Georgia 30308		New York, New York 10019
(404) 888-4000		(212) 474-1000

Title of each class of securities to be registered	Proposed maximum aggregate offering price (1)	Amount of registration fee

Common Stock, par value $0.01 per share	$100,000,000	$8,090

	Year Ended December 31,											Three Months Ended March 31,
	2000			2001			2002			Pro Forma 2002		2002			2003			Pro Forma 2003
	(Thousands of Dollars, Except Share and Per Share Data)
Statement of Income Data:(1)
Operating revenue	$	1,138,971		$	1,161,913		$	1,351,788		$		$	308,842		$	341,221		$
Operating expenses:
Salaries, wages and employee benefits		650,006			693,652			807,105					192,195			207,941
Supplies and expenses		99,319			97,645			101,985					22,033			30,069
Operating taxes		44,724			44,739			50,047					11,858			12,917
Claims and insurance		32,089			34,698			43,248					9,553			10,262
Rents and purchased transportation		113,636			115,014			145,274					29,764			35,568
Communication and utilities		19,936			19,849			20,696					5,262			5,494
Depreciation		47,859			47,619			58,526					15,027			14,390
Other		77,981			61,595			53,861					12,698			11,991

Total operating expenses		1,085,550			1,114,811			1,280,742					298,390			328,632
Operating income		53,421			47,102			71,046					10,452			12,589
Other income and expense:
Interest income from parent		17,742			21,461			19,052					4,276			3,243
Interest expense		892			962			1,183					306			359
Other income		556			424			1,456					340			101

Income before income taxes		70,827			68,025			90,371					14,762			15,574
Income tax expense		27,665			26,524			1,582					5,773			6,255

Net income	$	43,162		$	41,501		$	88,789		$		$	8,989		$	9,319		$

Pro forma income per share
Basic
Diluted
Pro forma weighted average number of shares outstanding
Basic
Diluted
Other Financial Data:(1)
Operating ratio(2)		95.3	%		95.9	%		94.7	%		%		96.6	%		96.3	%		%
EBITDA(3)	$	101,836		$	95,145		$	131,028		$		$	25,819		$	27,080		$
Cash provided by operating activities		94,499			133,794			6,612					26,166			29,403
Capital expenditures		33,259			38,656			64,565					5,210			11,318
Balance Sheet Data (as of period end):
Current assets	$	426,546		$	442,561		$	407,773		$		$	476,202		$	410,464		$
Properties, net		441,463			500,812			499,558					490,531			496,256
Goodwill and intangible assets		—			13,891			16,232					13,891			16,232
Total assets		918,575			968,692			1,030,692					993,346			1,024,657
Current liabilities		152,320			161,105			176,195					179,989			176,904
Debt due after one year		—			—			—					—			—
Common shareholders’ equity		616,182			641,579			631,081					647,397			635,913

	Year Ended December 31,						Three Months Ended March 31,
	2000		2001		2002		2002		2003
Selected Operating Data:(1) (unaudited) For the period:
Gross weight hauled (millions of pounds)(4)
LTL		7,509.6		7,513.5		8,693.2		2,021.6		2,130.9
Truckload		514.4		492.3		839.0		194.0		210.2

Total		8,024.0		8,005.8		9,532.2		2,215.6		2,341.1

Shipments (000’s)(5)
LTL		7,462.6		7,947.6		9,416.5		2,239.7		2,248.8
Truckload		32.0		32.9		65.8		15.1		15.1
Dedicated truckload		87.4		61.0		69.3		14.8		20.7

Total		7,582.0		8,041.5		9,551.6		2,269.6		2,284.6

Average length of haul (miles)(6)		771		785		758		748		775
LTL weight per LTL shipment (pounds)(7)		1,006		945		923		903		948
LTL revenue per LTL hundredweight, excluding fuel surcharge(8)	$	13.61	$	13.98	$	14.01	$	13.85	$	14.12
As of period end:
Average age of equipment (years)(9)
Tractors		6.6		6.4		6.4		N/A		N/A
Trailers		10.1		9.7		10.5		N/A		N/A
Tractors owned		4,916		5,461		5,694		5,410		5,605
Tractors leased		317		348		391		338		383
Trailers owned		18,586		20,704		20,753		20,036		21,270
Trailers leased		175		800		844		799		861
Number of service centers		166		196		204		200		205

	Year Ended December 31,										Three Months Ended March 31,
	2000			2001			2002			Pro Forma 2002	2002			2003			Pro Forma 2003
	(Thousands of Dollars)
Net income	$	43,162		$	41,501		$	88,789		$	$	8,989		$	9,319		$
Income tax expense		27,665			26,524			1,582				5,773			6,255
Interest income from parent		(17,742	)		(21,461	)		(19,052	)			(4,276	)		(3,243	)
Interest expense		892			962			1,183				306			359
Depreciation		47,859			47,619			58,526				15,027			14,390

EBITDA	$	101,836		$	95,145		$	131,028		$	$	25,819		$	27,080		$

Prospectus Summary		1
Risk Factors		12
Forward-Looking Statements		21
Use of Proceeds		22
Dividend Policy		22
Capitalization		23
Selected Historical Financial Data		24
Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
Industry		49
Business		51
Management		64
The Acquisition		77
Arrangements with Union Pacific Corporation		78
Description of Capital Stock		83
Shares Eligible for Future Sale		86
Bank Credit Facility		87
Certain U.S. Federal Tax Consequences for Non-U.S. Holders		88
Underwriting		90
Notice to Canadian Residents		93
Legal Matters		94
Experts		94
Where You Can Find More Information		94
Index to Consolidated Financial Statements		F-1
Index to Unaudited Pro Forma Consolidated Financial Statements		P-1

	As of March 31, 2003
	Actual			Adjustments	Pro Forma
	(Thousands of Dollars)
Cash and cash equivalents	$	6,314		$	$

Short-term debt(1)	$	20,121		$	$

Debt:
Promissory note(2)	$	—		$	$
Long-term debt, including current portion:
Revolving credit facility(3)		—
Term loan		—

Total debt		—

Common shareholders’ equity:
Common stock, $0.01 par value, 150,000,000 shares authorized, shares issued and outstanding actual and issued and outstanding pro forma		—
Paid-in surplus		1,242,187
Accumulated deficit		(522,396	)
Accumulated other comprehensive loss		(83,878	)

Total common shareholders’ equity		635,913

Total capitalization	$	635,913		$	$

	Year Ended December 31,															Three Months Ended March 31,
	1998			1999			2000			2001			2002			2002			2003
	(Thousands of Dollars, Except Share and Per Share Data)
Statement of Income Data:(1)
Operating revenue	$	1,041,248		$	1,070,080		$	1,138,971		$	1,161,913		$	1,351,788		$	308,842		$	341,221
Operating expenses:
Salaries, wages and employee benefits		616,261			650,572			650,006			693,652			807,105			192,195			207,941
Supplies and expenses		76,960			78,876			99,319			97,645			101,985			22,033			30,069
Operating taxes		43,191			43,978			44,724			44,739			50,047			11,858			12,917
Claims and insurance		36,188			35,797			32,089			34,698			43,248			9,553			10,262
Rents and purchased transportation		90,427			95,713			113,636			115,014			145,274			29,764			35,568
Communication and utilities		18,098			18,738			19,936			19,849			20,696			5,262			5,494
Depreciation		45,640			46,329			47,859			47,619			58,526			15,027			14,390
Other		60,314			73,500			77,981			61,595			53,861			12,698			11,991
Goodwill impairment(2)		562,291			—			—			—			—			—			—

Total operating expenses		1,549,370			1,043,503			1,085,550			1,114,811			1,280,742			298,390			328,632

Operating income (loss)		(508,122	)		26,577			53,421			47,102			71,046			10,452			12,589
Other income and expense:
Interest income from parent		12,473			15,634			17,742			21,461			19,052			4,276			3,243
Interest expense		836			1,222			892			962			1,183			306			359
Other income (expense)		(1,489	)		3,268			556			424			1,456			340			101

Income (loss) before income taxes		(497,974	)		44,257			70,827			68,025			90,371			14,762			15,574
Income tax expense		23,803			11,462			27,665			26,524			1,582			5,773			6,255

Net income (loss)	$	(521,777	)	$	32,795		$	43,162		$	41,501		$	88,789		$	8,989		$	9,319

Pro forma income per share
Basic
Diluted
Pro forma weighted average number of shares outstanding
Basic
Diluted
Other Financial Data:(1)
Operating ratio(3)		148.8	%		97.5	%		95.3	%		95.9	%		94.7	%		96.6	%		96.3	%
EBITDA(4)	$	(449,346	)	$	76,174		$	101,836		$	95,145		$	131,028		$	25,819		$	27,080
Cash provided by operating activities		79,050			86,325			94,499			133,794			6,612			26,166			29,403
Capital expenditures		58,808			54,805			33,259			38,656			64,565			5,210			11,318
Balance Sheet Data (as of period end):
Current assets	$	350,057		$	387,330		$	426,546		$	442,561		$	407,773		$	476,202		$	410,464
Properties, net		460,735			459,050			441,463			500,812			499,558			490,531			496,256
Goodwill and intangible assets		—			—			—			13,891			16,232			13,891			16,232
Total assets		843,098			895,394			918,575			968,692			1,030,692			993,346			1,024,657
Current liabilities		136,018			161,826			152,320			161,105			176,195			179,989			176,904
Common shareholders’ equity		572,224			589,020			616,182			641,579			631,081			647,397			635,913

	Payments Due by Period
	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
	(Thousands of Dollars)
Contractual Obligations:(1)
Long-term debt	$	962	$	962	$	—	$	—	$	—
Capital lease obligations		495		198		297		—		—
Operating leases		63,669		18,969		24,113		12,900		7,687

Total	$	65,126	$	20,129	$	24,410	$	12,900	$	7,687

Pro forma total long-term debt(2)	$		$		$		$		$


	Amount of Commitment Expiration Per Periods
	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
	(Thousands of Dollars)
Other Commercial Commitments:(3)
Standby letters of credit	$	23,769	$	23,769	$	—	$	—	$	—
Other		250		250		—		—		—

Total	$	24,019	$	24,019	$	—	$	—	$	—

Pro forma total standby letters of credit(2)	$		$		$		$		$

	As of December 31, 2001			As of December 31, 2002
	(Millions of Dollars)
Funded Status (as of period end):
Assets—Market Value	$	527.8		$	571.2
PBO		668.0			779.4

Funded Status	$	(140.2	)	$	(208.2	)


Components (for the period):
Discount Rate		7.25	%		6.75	%
Actual Asset Return		(8.1	)%		(10.0	)%
Cash Funding	$	—		$	126.5
Benefit Payments	$	24.5		$	30.5

		Impact on Funding Status
Discount Rate
0.25% increase		+$30.8 million
0.25% decrease		-$34.4 million
Actual Asset Return
1% increase		+$ 5.7 million
1% decrease		-$ 5.7 million
Cash Funding
+$10.0 million		+$10.0 million

		Impact on Equity Adjustment, net of tax
Discount Rate
0.25% increase		+$16.1 million
0.25% decrease		-$17.9 million
Actual Asset Return
1% increase		+$ 4.0 million
1% decrease		-$ 4.0 million

		Impact on Pension Expense
Discount Rate
0.25% increase		-$4.6 million
0.25% decrease		+$5.0 million
Expected Return on Assets
1% increase		-$7.2 million
1% decrease		+$7.2 million

2003	March 31
	(Thousands of Dollars)
Operating revenue	$	341,221
Operating income	$	12,589
Net income	$	9,319

2002	March 31		June 30		Sept. 30(1)		Dec. 31
	(Thousands of Dollars)
Operating revenue	$	308,842	$	337,093	$	354,691	$	351,162
Operating income		10,452		18,278		25,623		16,693
Net income		8,989		14,363		52,340		13,097

2001	March 31		June 30		Sept. 30		Dec. 31
	(Thousands of Dollars)
Operating revenue	$	284,553	$	294,417	$	296,572	$	286,371
Operating income		1,627		15,498		18,254		11,723
Net income		3,668		12,594		14,504		10,735

Service Center	Doors	Owned/Leased
Gaffney, South Carolina	264	Owned
Harrisburg, Pennsylvania	257	Owned
South Holland, Illinois	217	Leased
Memphis, Tennessee	189	Owned
Columbus, Ohio	175	Owned
Dallas, Texas	162	Leased
Kansas City, Kansas	162	Owned
Lexington, Kentucky	147	Owned
Atlanta, Georgia	138	Owned
Minneapolis, Minnesota	135	Owned
Los Angeles, California	125	Owned
Greensboro, North Carolina	124	Owned
Richmond, Virginia	124	Owned
Baltimore, Maryland	122	Owned
Charlotte, North Carolina	119	Owned
Phoenix, Arizona	118	Owned
Fontana, California	117	Owned
South Brunswick, New Jersey	111	Leased
Chicago, Illinois	110	Owned
Richfield, Ohio	107	Owned

Total	3,023

Type of Equipment (categorized by primary use)	Number of Units	Average Age
Linehaul tractors	3,220	3.8 years
Pickup and delivery tractors	2,865	9.3 years
Trailers	21,597	10.5 years
Forklifts	1,877	4.0 years

	Annual Compensation						Long-Term Compensation
Name and Principal Position	Salary		Bonus(a)		Other Annual Compensation		Restricted Stock Awards(b)		Securities Underlying Options/SARs	LTIP Payouts		All Other Compensation(c)
Leo H. Suggs	$	441,667	$	0	$	0	$	3,109,546	50,000	$	0	$	31,113
Chairman of the Board of Directors, Chief Executive Officer and President of Overnite Corporation
Patrick D. Hanley		267,500		30,000		0		627,405	15,000		0		16,463
Senior Vice President and Chief Financial Officer of Overnite Corporation
Gordon S. Mackenzie		255,000		125,000		0		469,933	15,000		0		15,433
Senior Vice President and Chief Operating Officer of Overnite Transportation
John W. Fain		217,300		0		0		657,410	15,000		0		10,495
Senior Vice President—Marketing and Sales of Overnite Transportation
Mark B. Goodwin		190,792		0		0		328,733	9,000		0		10,440
Senior Vice President, General Counsel and Secretary of Overnite Corporation

	Individual Grants
Name	Number of Securities Underlying Options/SARs Granted (#)	Percent of Total Options/SARs Granted to Employees in Fiscal Year		Exercise or Base Price		Expiration Date	Grant Date Present Value(a)
Leo H. Suggs	50,000	25.3	%	$	61.14/share	1/31/2012	$	889,025
Patrick D. Hanley	15,000	7.6			61.14/share	1/31/2012		266,708
Gordon S. Mackenzie	15,000	7.6			61.14/share	1/31/2012		266,708
John W. Fain	15,000	7.6			61.14/share	1/31/2012		266,708
Mark B. Goodwin	9,000	4.6			61.14/share	1/31/2012		160,025

Name	Shares Acquired on Exercise	Value Realized		Number of Securities Underlying Unexercised Options/SARs at FY End		Value of Unexercised In-the-Money Options/SARs at FY End
Name	Shares Acquired on Exercise	Value Realized		Exercisable	Unexercisable	Exercisable		Unexercisable
Leo H. Suggs	0	$	0	125,000	50,000	$	652,950	$	0
Patrick D. Hanley	25,000		926,000	136,419	15,000		1,934,957		0
Gordon S. Mackenzie	0		0	87,000	15,000		392,490		0
John W. Fain	0		0	121,227	15,000		1,066,367		0
Mark B. Goodwin	760		13,840	20,500	9,000		115,425		0

Final Average Earnings	Years of Credited Service
Final Average Earnings	5		10		15		20		25		30
$200,000	$	17,250	$	34,500	$	51,750	$	69,000	$	86,250	$	103,500
250,000		21,563		43,125		64,688		86,250		107,813		129,375
300,000		25,875		51,750		77,625		103,500		129,375		155,250
400,000		34,500		69,000		103,500		138,000		172,500		207,000
500,000		43,125		86,250		129,375		172,500		215,625		258,750
600,000		51,750		103,500		155,250		207,000		258,750		310,500
700,000		60,375		120,750		181,125		241,500		301,875		362,250
750,000		64,688		129,375		194,063		258,750		323,438		388,125
800,000		69,000		138,000		207,000		276,000		345,000		414,000

Name	Largest Aggregate Amount of Indebtedness Outstanding During Year Ended December 31, 2002		Aggregate Amount of Indebtedness as of July 1, 2003
Leo H. Suggs	$	4,113,378	$	1,133,799
Patrick D. Hanley		548,451		151,173
Gordon S. Mackenzie		548,451		151,173
John W. Fain		548,451		151,173
Mark B. Goodwin		274,225		75,587

	Shares of Overnite Corporation Common Stock to be Owned Beneficially		Shares of Union Pacific Common Stock Owned Beneficially as of July 1, 2003
Name	Number	Percent of Class	Number(1)		Percent of Class
Leo H. Suggs			233,293		*
Patrick D. Hanley			195,852		*
Gordon S. Mackenzie			111,360		*
John W. Fain			147,432		*
Mark B. Goodwin			34,790		*
Directors and executive officers as a group (six persons)			722,891	(2)	*

Number of Shares		Date
		After the date of this prospectus.
		After 90 days from the date of this prospectus.
		After 180 days from the date of this prospectus.

Underwriter		Number of Shares
Credit Suisse First Boston LLC
Morgan Stanley & Co. Incorporated



Total

		Page
Audited Consolidated Financial Statements

Independent Auditors’ Report		F-2

Consolidated Statements of Income for the years ended December 31, 2002, 2001 and 2000		F-3

Consolidated Statements of Financial Position as of December 31, 2002 and 2001		F-4

Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000		F-5

Consolidated Statements of Changes in Common Shareholder’s Equity for the years ended December 31, 2002, 2001 and 2000		F-6

Notes to the Consolidated Financial Statements		F-7

Unaudited Interim Consolidated Financial Statements

Unaudited Interim Consolidated Statements of Income for the three months ended March 31, 2003 and 2002		F-26

Unaudited Interim Consolidated Statements of Financial Position as of March 31, 2003 and December 31, 2002		F-27

Unaudited Interim Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002		F-28

Notes to the Unaudited Interim Consolidated Financial Statements		F-29

	For the years ended December 31,
	2002		2001		2000
	Thousands of Dollars
Operating Revenue	$	1,351,788	$	1,161,913	$	1,138,971
Operating Expenses:
Salaries, wages and employee benefits		807,105		693,652		650,006
Supplies and expenses		101,985		97,645		99,319
Operating taxes		50,047		44,739		44,724
Claims and insurance		43,248		34,698		32,089
Rents and purchased transportation		145,274		115,014		113,636
Communication and utilities		20,696		19,849		19,936
Depreciation		58,526		47,619		47,859
Other		53,861		61,595		77,981

Total operating expenses		1,280,742		1,114,811		1,085,550

Operating Income		71,046		47,102		53,421
Other Income and Expense:
Interest income from parent		19,052		21,461		17,742
Interest expense		1,183		962		892
Other income		1,456		424		556

Income before Income Taxes		90,371		68,025		70,827
Income tax expense		1,582		26,524		27,665

Net Income	$	88,789	$	41,501	$	43,162

	As of December 31,
	2002			2001
	Thousands of Dollars
ASSETS
Current Assets:
Cash and cash equivalents	$	2,086		$	9,339
Accounts receivable (net of allowances of $20,503 in 2002, and $26,753 in 2001)		136,340			130,618
Income taxes receivable		25,381			3,368
Inventories		10,741			10,033
Advances to parent		163,173			219,444
Current deferred income tax asset		59,229			59,381
Other current assets		10,823			10,378

Total current assets		407,773			442,561

Properties:
Cost		975,902			953,342
Accumulated depreciation		(476,344	)		(452,530	)

Net properties		499,558			500,812

Other Assets:
Deferred income tax asset		72,048			600
Goodwill and intangible asset		16,232			13,891
Intangible pension asset		24,465			160
Other assets		10,616			10,668

Total assets	$	1,030,692		$	968,692

LIABILITIES AND COMMON SHAREHOLDER’S EQUITY
Current Liabilities:
Cash overdraft	$	3,068		$	45
Accounts payable		30,215			30,791
Employee savings plan		17,574			13,321
Accrued wages and benefits		55,977			50,303
Accrued casualty costs		40,621			30,011
Income and other taxes		9,280			11,422
Retiree benefit obligation		10,200			7,500
Other current liabilities		9,260			17,712

Total current liabilities		176,195			161,105

Non-current Liabilities:
Accrued casualty costs		23,450			23,000
Retiree benefits obligation		199,669			141,593
Other liabilities		297			1,415

Total non-current liabilities		223,416			166,008

Commitments and contingencies
Common Shareholder’s Equity:
Common stock, $0.10 par value, authorized 1,000 shares; issued and outstanding: 100 shares in both years		—			—
Paid-in surplus		1,242,187			1,242,187
Accumulated deficit		(527,715	)		(600,504	)
Accumulated other comprehensive loss		(83,391	)		(104	)

Total common shareholder’s equity		631,081			641,579

Total liabilities and common shareholder’s equity	$	1,030,692		$	968,692

								Accumulated Other Comprehensive Income (Loss)
	Common Stock		Paid-in Surplus		Accumulated Deficit			Derivative Adjustment			Minimum Pension Liability			Total			Total
	Thousands of Dollars
Balance, January 1, 2000	$	—	$	1,242,187	$	(653,167	)	$	—		$	—		$	—		$	589,020

Net income						43,162												43,162
Other comprehensive loss, net of income taxes																		—

Comprehensive income																		43,162
Dividends declared						(16,000	)											(16,000	)

Balance, December 31, 2000		—		1,242,187		(626,005	)		—			—			—			616,182

Net income						41,501												41,501
Other comprehensive loss, net of income taxes of $64									(104	)					(104	)		(104	)

Comprehensive income																		41,397
Dividends declared						(16,000	)											(16,000	)

Balance, December 31, 2001		—		1,242,187		(600,504	)		(104	)		—			(104	)		641,579

Net income						88,789												88,789
Other comprehensive income (loss), net of income taxes of $51,674									591			(83,878	)		(83,287	)		(83,287	)

Comprehensive income																		5,502
Dividends declared						(16,000	)											(16,000	)

Balance, December 31, 2002	$	—	$	1,242,187	$	(527,715	)	$	487		$	(83,878	)	$	(83,391	)	$	631,081

	2002		2001
	Thousands, Except Average Commodity Prices
Number of gallons hedged for 2002		—		8,844
Average price of 2002 hedges outstanding (per gallon) (a)		—	$	0.58
Number of gallons hedged for 2003		2,948		2,948
Average price of 2003 hedges outstanding (per gallon) (a)	$	0.58	$	0.58

	2002		2001
	Thousands of Dollars
Fuel Hedging:
Gross fair value asset position	$	789	$	—
Gross fair value (liability) position		—		(169	)

Total fair value asset (liability) position, net	$	789	$	(169	)

	2002
	Thousands of Dollars
2003	$	18,969
2004		13,410
2005		10,703
2006		8,333
2007		4,567
Later years		7,687

Total minimum payments	$	63,669

	Pension Benefits						Other Postretirement Benefits
	2002			2001			2002			2001
	Thousands of Dollars
Net benefit obligation at beginning of year	$	667,970		$	610,319		$	82,984		$	46,686
Motor Cargo acquisition		—			7,439			—			—
Service cost		28,664			25,647			3,221			3,020
Interest cost		48,294			44,271			6,079			5,827
Plan amendments		29			—			—			—
Actuarial loss		64,953			4,841			13,110			33,890
Gross benefits paid		(30,465	)		(24,547	)		(9,241	)		(6,439	)

Net benefit obligation at end of year	$	779,445		$	667,970		$	96,153		$	82,984

	Pension Benefits									Other Postretirement Benefits
	2002			2001			2000			2002			2001			2000
	Thousands of Dollars
Service cost	$	28,664		$	25,647		$	24,539		$	3,221		$	3,020		$	1,656
Interest cost		48,294			44,271			41,389			6,079			5,827			3,455
Expected return on assets		(55,698	)		(57,828	)		(52,529	)		—			—			—
Amortization of:
Transition asset		—			(2,093	)		(2,093	)		—			—			—
Prior service cost (credit)		4,844			5,063			4,289			(354	)		(354	)		(1,526	)
Actuarial loss (gain)		(27	)		(4,027	)		(5,551	)		1,384			1,250			(1,082	)

Total net periodic benefit cost	$	26,077		$	11,033		$	10,044		$	10,330		$	9,743		$	2,503

	1% Increase		1% Decrease
	Thousands of Dollars
Effect on total service and interest cost components	$	1,685	$	(1,356	)
Effect on postretirement benefit obligation	$	13,698	$	(11,444	)

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted- Average Remaining Contractual Life (years)	Weighted- Average Exercise Price		Number Outstanding	Weighted- Average Exercise Price
$28.01 to $41.91	107,384	2.46	$	31.18	107,384	$	31.18
$42.87 to $49.88	159,486	6.78		48.69	159,486		48.69
$54.18 to $61.14	658,400	5.47		57.92	461,100		56.56

$28.01 to $61.14	925,270	5.34	$	53.23	727,970	$	51.09