Introduction Home Yellow is Number One Three components. One company. One-Stop Shopping Shareholders' Letter Management's Discussion and Analysis Financial Summary Consolidated Balance Sheets Statements of Consolidated Operations Statements of Consolidated Cash Flows Statements of Shareholders' Equity Statements of Comprehensive Income Notes to Financial Statements   Description of Business   Principles of Consolidation...     Cash and Cash Equivalents     Concentration of Credit Risks     Revenue Recognition     Financial Instruments     Unusual Items     Claims and Insurance Accruals     Stock-Based Compensation     Impairment of Long-Lived Assets     Reclassifications   Preferred Stock   Supplemental Cash Flow Information   Discontinued Operations   Prepaid Expenses and Other   Goodwill and Other Assets   Property and Equipment   Accounts Payable   Other Current and Accrued Liabilities   Claims and Other Liabilities   Debt and Financing     Variable-Rate Debt     Fixed-Rate Debt     Other Debt   Employee Benefits     Retirement Plans     Multi-Employer Plans     401(k) Savings Plans     Performance Incentive Awards     Executive Performance Plan   Stock Compensation Plans   Goodwill and Intangibles   Acquisitions   Income Taxes   Commitments, Contingencies...     Labor Negotiations   Business Segments   Earnings Per Common Share Independent Auditors' Report Supplementary Information Glossary Officers Corporate Information Board of Directors Back Cover

Business Segments

Notes to Consolidated Financial Statements Yellow Corporation and Subsidiaries Business Segments The company reports financial and descriptive information about its reportable operating segments on a basis consistent with that used internally for evaluating segment performance and allocating resources to segments. The segments are managed separately because each requires different operating and technology strategies. The company evaluates performance primarily on operating income and return on capital. Yellow has two reportable segments, which are strategic business units that offer complementary transportation services to its customers. Yellow Transportation is a unionized carrier that provides comprehensive regional, national and international transportation services. Meridian IQ provides domestic and international freight forwarding, multi-modal brokerage and transportation management services. The accounting policies of the segments are the same as those described in the Summary of Accounting Policies note. Management fees and other corporate services are charged to segments based on direct benefit received or allocated based on revenue. Corporate revenue in 2001 and 2000 represented certain non-asset-based services prior to the formation of Meridian IQ. Corporate operating losses represent operating expenses of the holding company, including salaries, wages and benefits, along with incentive compensation and professional services for all periods presented. In 2002, Corporate operating losses also included approximately $6.9 million of spin-off charges. Corporate identifiable assets primarily referred to cash and cash equivalents, in addition to pension intangible assets. In 2002, intersegment revenue related to transportation services provided by Yellow Transportation to Meridian IQ and charges to Yellow Transportation for use of various Meridian IQ service names. Meridian IQ includes the former operations of Transportation.com as well as other non-asset-based services. The 2001 and 2000 segment data for Meridian IQ included the partial year results of operations of Transportation.com and other non-asset-based services for the periods they were part of the company's consolidated financial results. Full year revenue for Meridian IQ was $31.1 million and $23.4 million in 2001 and 2000, respectively. Full year operating losses for Meridian IQ were $(16.8) million and $(13.7) million in 2001 and 2000, respectively. Revenue from foreign sources totaled $24.8 million, $26.0 million, and $24.5 million, in 2002, 2001, and 2000 respectively, and is largely derived from Canada and Mexico. The following table summarizes the company's operations by business segment: (in thousands) Yellow Transportation Meridian IQ Corporate/ Eliminations Consolidated 2002 External revenue     $ 2,544,573         $ 79,575         $ -         $ 2,624,148   Intersegment revenue 2,479   2,196   (4,675 )  - Operating income (loss) 70,594   (2,697 )  (21,033 )(2)  46,864 Identifiable assets 940,252   64,617   38,116   1,042,985 Capital expenditures, net 81,232   1,537   61   82,830 Depreciation and amortization 76,972   2,321   41   79,334   2001 External revenue $ 2,485,972   $ 11,292   $ 7,806   $ 2,505,070 Intersegment revenue 6,360   -   (6,360 )  - Operating income (loss) 55,884   (5,738 )  11,951   38,195 Identifiable assets 757,484   17,641   19,704   794,829 (1)  Capital expenditures, net 80,463   822   150   81,435 Depreciation and amortization 76,227   698   52   76,977   2000 External revenue  $ 2,763,426    $ 16,788    $ 18,917    $ 2,799,131 Intersegment revenue   14,346     -     (14,346 )    - Operating income (loss)   141,829     (4,507 )    (10,575 )    126,747 Identifiable assets   722,808     -     45,793     768,601 (1) Capital expenditures, net   61,791     256     8,642     70,689 (1) Depreciation and amortization   68,780     120     9,687     78,587 (1) (1) The December 31, 2001 and 2000, total assets per the Consolidated Balance Sheets includes $490,948 and $539,876, respectively, of assets related to discontinued operations not included above. (2) Includes $6.9 million of spin-off charges, as discussed on the previous page.

Business Segments