American Airlines 2008 Annual Report Download - page 64

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61
2. Special Charges and Restructuring Activities (Continued)
The following table summarizes the components of the Company’s special charges, the remaining accruals for
these charges and the capacity reduction related charges (in millions) as of December 31, 2008:
Aircraft
Charges
Facility
Exit Costs
Employee
Charges
Other
Total
Remaining accrual at
January 1, 2006
152
36
-
-
188
Adjustments
(3)
(16)
-
-
(19)
Payments
(21)
(1)
-
-
(22)
Remaining accrual at
December 31, 2006
$ 128
$ 19
$ -
$ -
$ 147
Restructuring charges
63
-
-
-
63
Non-cash charges
(53)
-
-
-
(53)
Payments
(12)
(1)
-
-
(13)
Remaining accrual at
December 31, 2007
$ 126
$ 18
$ -
$ -
$ 144
Capacity reduction charges
1,117
-
71
25
1,213
Non-cash charges
(1,103)
-
-
(25)
(1,128)
Adjustments
1
(2)
-
-
(1)
Payments
(31)
-
(55)
-
(86)
Remaining accrual at
December 31, 2008
$ 110
$ 16
$ 16
$ -
$ 142
Cash outlays related to the accruals for aircraft charges and facility exit costs will occur through 2017 and 2018,
respectively.
Other
On September 22, 2001, the Air Transportation Safety and System Stabilization Act (the Stabilization Act) was
signed into law. The Stabilization Act provides that, notwithstanding any other provision of law, liability for all
claims, whether compensatory or punitive, arising from the terrorist attacks of September 11, 2001 (the Terrorist
Attacks), against any air carrier shall not exceed the liability coverage maintained by the air carrier. Based upon
estimates provided by the Company’s insurance providers, the Company initially recorded a liability of
approximately $2.3 billion for claims arising from the Terrorist Attacks, after considering the liability protections
provided for by the Stabilization Act. The balance, recorded in the accompanying consolidated balance sheet, was
$1.7 billion and $1.8 billion at December 31, 2008 and 2007, respectively.
In 2008, the Company finalized the liability associated with flight 587. A previously recorded liability and related
insurance receivable were reduced as a result of the settlement by approximately $381 million.
3. Investments
Short-term investments consisted of (in millions):
December 31,
2008
2007
Overnight investments and time deposits
$ 1,574
$ 488
Corporate and bank notes
1,016
3,781
U. S. government agency notes
322
17
Other
4
101
$ 2,916
$ 4,387