American Airlines 1998 Annual Report Download - page 59

57
The Board of Directors and Stockholders
AMR Corporation
We have audited the accompanying consolidated bal-
ance sheets of AMR Corporation as of December 31, 1998
and 1997, and the related consolidated statements of oper-
ations, stockholders’ equity, and cash flows for each of the
three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with gener-
ally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assess-
ing the accounting principles used and significant estimates
made by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the consoli-
dated financial position of AMR Corporation at December
31, 1998 and 1997, and the consolidated results of its
operations and its cash flows for each of the three years in
the period ended December 31, 1998, in conformity with
generally accepted accounting principles.
2121 San Jacinto
Dallas, Texas 75201
January 18, 1999, except for
the last paragraph of Note 2 and
the last paragraph of Note 3, for
which the date is February 22, 1999.
The management of AMR Corporation is responsible for
the integrity and objectivity of the Company’s financial state-
ments and related information. The financial statements have
been prepared in conformity with generally accepted account-
ing principles and reflect certain estimates and judgments of
management as to matters set forth therein.
AMR maintains a system of internal controls designed to
provide reasonable assurance, at reasonable cost, that its finan-
cial records can be relied upon in the preparation of financial
statements and that its assets are safeguarded against loss or
unauthorized use. An important element of the Company’s
control systems is the ongoing program to promote control
consciousness throughout the organization. Management’s
commitment to the program is evidenced by organizational
arrangements that provide for divisions of responsibility, effec-
tive communication of policies and procedures, selection of
competent financial managers and development and mainte-
nance of financial planning and reporting systems.
Management continually monitors the system for com-
pliance. AMR maintains a strong internal auditing program
that independently assesses the effectiveness of the internal
controls and recommends possible improvements. Ernst &
Young LLP, independent auditors, is engaged to audit the
Company’s financial statements. Ernst & Young obtains and
maintains an understanding of the internal control structure
and conducts such tests and other auditing procedures consid-
ered necessary in the circumstances to render the opinion on
the financial statements contained in their report.
The Audit Committee of the Board of Directors, com-
posed entirely of directors who are not employees of AMR,
meets regularly with the independent auditors, management
and internal auditors to review their work and confirm that
they are properly discharging their responsibilities. In addition,
the independent auditors and the internal auditors meet peri-
odically with the Audit Committee, without the presence of
management, to discuss the results of their work and other
relevant matters.
Donald J. Carty
Chairman, President and Chief Executive Officer
Gerard J. Arpey
Senior Vice President and Chief Financial Officer
REPORT OF INDEPENDENT AUDITORS REPORT OF M ANAGEM ENT