American Airlines 2004 Annual Report Download - page 54

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51
1. Summary of Accounting Policies (Continued)
New Accounting Pronouncement In December 2004, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123(R)).
SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be
recognized in the financial statements based on their fair values. SFAS 123(R) is effective for public companies
beginning with the first interim period that begins after June 15, 2005 (July 1, 2005 for AMR). Under SFAS 123(R),
the Company will recognize compensation expense for the portion of outstanding awards for which the requisite
service has not yet been rendered, based on the grant-date fair value of those awards calculated under SFAS 123
for pro forma disclosures. The Company has not completed its evaluation of the impact of SFAS 123(R) on its
financial statements.
2. Special charges and U.S. government grant
During the last few years, as a result of the events of September 11, 2001 (the Terrorist Attacks), the depressed
revenue environment, high fuel prices and the Company’s restructuring activities, the Company has recorded a
number of special charges. For the years ended December 31, 2004, 2003 and 2002, the Company recorded the
following to Special charges (in millions):
Year Ended December 31,
2004 2003 2002
Aircraft charges $ 1 $ 321 $ 658
Employee charges 31 92 57
Facility exit costs (21) 62 3
Other - (68) -
Total special charges $ 11 $ 407 $ 718
Year Description of Charge
Amount
(millions)
Aircraft charges
2004 Adjusted prior accruals for lease return and other costs $ (20)
Permanently retired seven McDonnell Douglas MD80 aircraft 21
$1
2003 Accelerated the planned retirement of Airbus A300 aircraft and permanently
retired Boeing 767-200 aircraft and four Boeing 767-200 ER aircraft. Aircraft
and related Airbus A300 rotables were written down to fair value. * $ 264
Retired Boeing 757 leased aircraft and accrued future lease commitments and
lease return costs 77
Adjusted prior accruals for lease return and other costs (20)
$ 321