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60
significant variable interest. The consolidation requirements of FIN 46 apply immediately to variable interest entities created
after January 31, 2003. The consolidation requirements apply to existing entities in the first fiscal year or 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, Item 8, the Railroad has a synthetic operating lease arrangement to finance a new headquarters
building, which falls within the guidance of FIN 46. In accordance with FIN 46, the Railroad will either consolidate,
restructure or refinance the synthetic lease prior to July 1, 2003. The Corporation does not expect FIN 46 to have any impact
on the treatment of the Sale of Receivables program as described in note 2 to the Consolidated Financial Statements.
13. 2000 Work Force Reduction Plan
The Corporation’s Board of Directors approved a work force reduction plan (the Plan) in the fourth quarter of 2000. The Plan
called for the elimination of approximately 2,000 Railroad positions during 2001. The Corporation accrued $115 million pre-
tax or $72 million after-tax in the fourth quarter of 2000 for costs related to the Plan. The expense was charged to salaries,
wages and employee benefits in the Corporation’s 2000 Consolidated Statements of Income. Plan liability activity in 2001
included $49 million paid in cash or reclassified to contractual liabilities for severance benefits to 571 employees; $60 million
of subsidized early retirement benefits covering 480 employees; with the remaining $6 million charged back against salaries,
wages and employee benefits in the Corporation’s Consolidated Statements of Income. In December 2001, the Plan was
completed with positions eliminated through a combination of subsidized early retirements, involuntary layoffs and attrition.
14. Selected Quarterly Data
Selected unaudited quarterly data are as follows:
Millions of Dollars, Except Per Share Amounts
2002 Mar. 31 June 30 Sep. 30 Dec. 31
Operating revenues ................................................................ $2,967 $3,154 $3,199 $3,171
Operating income .................................................................. 499 602 644 579
Net income ............................................................................. 222 304 437 378
Net income per share
Basic ................................................................................... 0.89 1.21 1.73 1.49
Diluted............................................................................... 0.86 1.15 1.63 1.41
2001 Mar. 31 June 30 Sep. 30 Dec. 31
Operating revenues ................................................................ $2,943 $2,998 $3,026 $3,006
Operating income .................................................................. 439 494 574 565
Net income ............................................................................. 181 243 267 275
Net income per share
Basic ................................................................................... 0.73 0.98 1.08 1.10
Diluted............................................................................... 0.72 0.95 1.04 1.06
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.