American Airlines 2010 Annual Report Download - page 65

Download and view the complete annual report

Please find page 65 of the 2010 American Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 118

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118

62
2. Special Charges and Restructuring Activities (Continued)
Employee Charges
In conjunction with the capacity reductions announced in 2008, the Company reduced its workforce
commensurate with the announced system-wide capacity reductions. This reduction in workforce was
accomplished through various measures, including voluntary programs, part-time work schedules, furloughs in
accordance with collective bargaining agreements, and other reductions.
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, 2010:
Aircraft
Charges
Facility
Exit Costs
Employee
Charges
Other
Total
Remaining accrual at
January 1, 2008
$ 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
Capacity reduction charges
164
7
-
-
171
Non-cash charges
(68)
-
-
-
(68)
Adjustments
(2)
-
-
-
(2)
Payments
(49)
(3)
(16)
-
(68)
Remaining accrual at
December 31, 2009
$ 155
$ 20
$ -
$ -
$ 175
Non-cash charges
Adjustments
(8)
11
3
Payments
(88)
(4)
(92)
Remaining accrual at
December 31, 2010
$ 59
$ 27
$ -
$ -
$ 86
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, 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 receivable
and the liability, recorded in the accompanying consolidated balance sheet as Other assets and Other liabilities
and deferred credits, respectively, was $1.6 billion and $1.7 billion at December 31, 2010 and 2009, respectively.