American Airlines 2003 Annual Report Download - page 55

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53
2. Special charges and U.S. government grant (Continued)
Year Description of Charge
Amount
(millions)
Employee charges (Continued)
2001 Reduced workforce by approximately 20,000 jobs across all work groups**.
Accrued primarily severance and benefits. $ 71
Facility exit costs
2003 Accrued the fair value of future lease commitments and wrote-off certain
prepaid rental amounts and leasehold improvements related to certain excess
airport space that will no longer be used $ 45
Reduced the size of the St. Louis hub and accrued the fair value of certain
future lease commitments 12
Other 5
$62
2001 Discontinued service at Dallas Love Field Airport and closed six Admiral’s
Clubs, five airport Platinum Service Centers and approximately 105 off-airport
Travel Centers in 37 cities. Accrued the fair value of future lease commitments
and wrote-off certain leasehold improvements and fixed assets. $ 87
Sold terminal facilities lease rights at the Raleigh-Durham International Airport
to the Raleigh-Durham Airport Authority. Accrued residual cost less sales
proceeds. 28
$ 115
* In determining the asset impairment charges described above, management estimated the undiscounted
future cash flows using models used by the Company in making fleet and scheduling decisions. In
determining the fair value of these aircraft, the Company considered outside third party appraisals and
recent transactions involving sales of similar aircraft and engines. The Company also considered internal
valuation models in determining the fair value of these aircraft, and with respect to the Fokker 100 aircraft,
incorporated the fact that with this grounding, no major airline will operate this fleet type.
** Work groups include pilots, flight attendants, mechanics, fleet service clerks, agents, management and
support staff personnel.