On September 11, 2001, two American Airlines aircraft were hijacked and destroyed in terrorist attacks on The World Trade Center in New York City and the Pentagon in northern Virginia. As a consequence of these actions, AMR Corporation, the parent company of American Airlines, concluded that its fleet of aircraft had become impaired, and consequently, took a special charge of \($718\) million against 2001 net income and an additional \($1,466\) million charge against 2002 net income.

Discuss how these special charges will be reflected in AMR’s financial statements. Given the unusual circumstances associated with these charges, could they be considered extraordinary? Why or why not? Will these charges be included in the company’s sustainable earnings? Why or why not? How will these items be treated after 2015?