American Airlines 2002 Annual Report Download - page 49

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47
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
AMR Corporation
We have audited the accompanying consolidated balance sheets of AMR Corporation as of December 31,
2002 and 2001, and the related consolidated statements of operations, stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 2002. 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 auditing standards generally accepted in the United States.
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 assessing 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
consolidated financial position of AMR Corporation at December 31, 2002 and 2001, and the consolidated results
of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in
conformity with accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming the Company will continue as a
going concern. As more fully described in Note 2, the Company’s recent history of significant losses, negative
cash flows from operations, uncertainty regarding the Company’s ability to reduce it’s operating costs to offset the
declines in its revenues, the potential failure of the Company to satisfy the liquidity requirements in certain of its
credit agreements, and its diminishing financial resources, raise substantial doubt about the Company’s ability to
continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that may result from the outcome of this
uncertainty.
As discussed in Note 4 and Note 9 to the consolidated financial statements, effective January 1, 2002 the
Company changed its method of accounting for its goodwill and other intangible assets as required by Statement
of Financial Accounting Standards No. 142, “Accounting for Goodwill and Other Intangible Assets,” and effective
January 1, 2001 the Company changed its method of accounting for its derivative and hedging activities as
required by Statement of Financial Accounting Standards No. 133, “Accounting for derivative Instruments and
Hedging Activities,” as amended.
ERNST & YOUNG LLP
2121 San Jacinto
Dallas, Texas 75201
March 31, 2003