NNUAL~PORT FOR 1 44 
ST. PAUL-MINNEAPOLIS  
 DIRECTORS 
CARLETON PUTNAM 
B. E. BRAUN 
H. R. BOLANDER, Ju. 
L. R. BILLETT 
JOHN R. LONGMIRE 
OFFICERS 
CARLETON PuTN AM, President 
B. E. BRAUN, Vice-President- Operations 
H. R. BOLANDER, JR., Vice-President-Secretary 
W. J. BYRNE, Treasurer 
R. S. SCRIVENER, Assistant Treasurer 
M. J. BROWN, Assistant Treasurer 
E. MURRAY, AssZ:stant Secretary 
General Offices, Memphis Municipal Airport, Memphis 2, Tennessee 
Corporate Office, 100 West Tenth Street, Wilmington, Delaware 
Transfer Agent, Mississippi Valley Trust Company, Broadway and Olive Street, St. Louis, Missouri 
Registrar, Boatmen's National Bank, Broadway and Olive Street, St. Louis, Missouri 
~ -\ 
-- , 
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.....,,... 
 TO THE STOCKHOLDERS OF 
Earnings 
DuRING the year 1944, your company earned $177,703.34 after taxes, but before provision for military contract 
adjustments.* This compares with earnings of $128,055.71 for 1943, and constitutes an increase of $49,647.63 over 
the preceding year, despite a decline of $107,197.83 in revenue from Army contracts. Income from commercial 
operations before taxes increased from $30,868.60 in 1943 to $217,179.52 in 1944. 
The following statement sets forth detailed comparisons of the two years: 
Condensed Comparative Income Statement 
Twelve months Twelve months 
ended ended 
Dec. 31, 1944 Dec. 31, 1943 
Revenue miles flown . ...................................................................... . .. . 2,882,881 2,179,472 
Operating Revenue: 
Passenger and excess baggage ............ . ............ . . . ............... .. ............. . . . .. . $ 2,545,016.42 $ 1,864,998.56 
Mail ... .. ............... .. . . ... . ....... . ......... . . . ... . .. . ... . ........ . . . . .. ......... . .. . 281,807.84 801,828.14 
Express ..... . .... . ....... . ................. . ....... . ............... . . . .. . .... . .. ... ....... . 107,245.02 96,665.50 
Other ... . .......... . ..... . ........ . . . ................................... .. ... . ........... . 12,648.52 11,054.65 
Total operating revenue . ...... . ........ . ... . .................. .. ..... .. .... ... ... .... ....... . .. . $ 2,946,712.80 $ 2,274,541.85 
Total operating expenses ....... .......... . .... . ........ .. . .. .... . .... . ........ ... .... . . . ..... . . . 2,729,538.28 2,248,678.25 
Income from operations . .. . .............. . ......... . ......... . .. . . . . . .. . . . . . ..... . ........... . . $ 217,179.52 $ 80,868.60 
Other income, including fees and profits on Government contracts . ........... . ........... . .. . ......... . 99,786.22 201,682.54 
$ 816,965.74 $ 282,501.14 
Other deductions . ... . ........ . .......... . . . ........ . .... .. .................. . ... . ............. . 18,262.40 18,168.89 
Income before provision for income taxes . .......... . ............................................. . $ 808,708.84 $ 214,882.25 
Provision for Federal and State income taxes . ..... . ....... . .. . .......... . .. . .. . ... .. ..... . .. . .... . . 126,000.00 86,276.54 
Net income for period, before reserves . . .............. . ...... . ..... . .... . ........ .. . . . . ........ . . . . $ 177,708.84 $ 128,055.71 
*Since December 81, 1948, reserves totaling $100,000 have been set up against possible adjustments on Army contracts. (See note 2 of "notes to 
Financial Statements" for additional details.) 
 Operating Statistics 
THE improvement in commercial operations is traceable directly to the re-acquisition in the summer of 1944 of 
the two airplanes surrendered to the Air Transport Command in June, 1942. The company's military operations 
ceased as of June, 1944, and during the second half of the year all our efforts were bent upon meeting the heavy 
demands of traffic on our regular transportation services. Although after the return of the two planes our fleet was 
no larger than it had been in 1941, we nevertheless flew over 550,000 more plane miles in 1944 than in 1941. Other 
comparisons indicating the degree of utilization of our fleet in war and pre-war years follow: 
Revenue miles flown . . .. . . ... .. .. . .. . .. . .. . . . ..... . 
Passengers per revenue mile flown .. .. . . .. . . . .... ... . . 
Number of revenue passengers ........ . . . ... . . . ..... . 
Revenue passenger miles . .. . ..... . .... ... . .. . .. .. . . . 
Air mail pound miles . .. . . . . . ... . . ... ............. . 
Air express pound miles ...... .... . ........ . .... . .. . 
1944 1943 194f 1941 
2,882,381 2,179,472 2,210,187 2,327,573 
17.08 16.19 12.86 10.06 
104,906 82,017 69,075 62,125 
49,242,103 35,293,185 28,438,154 23,414,438 
943,480,867 928,067,007 523,539,524 303,644,050 
461,043,926 373,296,563 211,307,515 108,048,653 
1940 
1,983,263 
8.06 
42,064 
15,979,090 
254,095,673 
73,205,641 
The 24% increase in plane miles flown with the same number of aircraft as between 1941 and 1944 (the actual 
increase would have been 76% if the two returned planes had been available throughout the entire year) was made 
possible by an increase in daily utilization of each plane from 7 hours and 50 minutes in 1941 to 13 hours and 45 
minutes in 1944. For this performance without disturbance of our safety record high commendation is due the 
company's Maintenance Division, and it is perhaps proper to mention here that it received Aviation Magazine's 
1944 Maintenance Award for air lines operating up to 10,000,000 plane miles annually. 
T ra/f ic Development 
DuRING the past five years your company has set successively new highs each year in the major categories of 
traffic statistics. The figures below speak for themselves: 
Dollar Comparison of Annual Operating Revenues 
1944 1943 194f 1941 1940 
Passenger and excess baggage . .. ... ......... . ........ $ 2,545,016.42 $ 1,864,998.56 $1,421,834.51 $ 1,081,950.48 $ 733,026.74 
Mail .. . ........ . ..... ............ . ........ 281,807.84 301,823.14 606,004.09 611,460.74 429,445.81 
Express . .. .. . .. . .... . .. ......... . . . ....... . . . .... 107,245.02 96,665.50 62,309.10 34,318.57 24,904.28 
Other ........ . ...... . ... . ............... . .. . . .. .. 12,643.52 11,054.65 9,688.83 3,662.39 3,190.71 
$ 2,946,712.80 $2,274,541.85 $2,099,836.53 $1,731,392.18 $1,190,567.54 
Cents Per Mile Comparison of Annual Operating Revenues 
1944 1943 194f 1941 1940 
Revenue miles flown . . . ....... ... ... . . .. . ....... . .. 2,882,381 2,179,472 2,210,187 2,327,573 1,983,263 
Passenger and excess baggage . . ... . . ................. 88.30c 85.57c 64.33c 46.48c 36.96c 
Mail ............... . . . . ........... . .. .. .. . .... . . 9.78c 13.85c 27.42c 26.27c 21.65c 
Express ... .. . ........... . ... . . . . . ..... . ... . .... . 3.72c 4.44c 2.82c 1.47c 1.26c 
Other . .. . ..... . ............ . .......... . .......... .43c .5lc .44c .16c .16c 
102.23c 104.37c 95.0lc 74.38c 60.03c 
It should be noted that in spite of a substantial increase in plane miles flown, passenger revenues per plane mile 
increased from 85.57 cents in 1943 to 88.30 cents in 1944, a gain of 2.73 cents. Mail revenues fell off 4.07 cents, 
due in part to the fact that the first month of 1943 was flown at our old mail rate, which, during the month of January, 
1943, yielded 30.98 cents a plane mile. As I stated in my report of last year, the Civil Aeronautics Board, as of 
December 29, 1943, reduced our mail rate to .3 mill per pound mile effective retroactively to February 1, 1943. The 
reduction in mail revenue produced by this order is a major reason for the decline in total per mile operating revenues 
between 1943 and 1944 of 2.14 cents. However, as a result of the larger number of plane miles flown, operating 
expenses decreased 8.25 cents. 
Two 
 Detroit Route Acquisition 
ONE of the most important developments in the history of your company occurred on August 3, 1944, when the 
Civil Aeronautics Board granted us a certificate to operate between Detroit, Michigan, and Memphis, Tennessee, 
via Toledo, Ohio; Fort Wayne, Marion, Anderson-Muncie-New Castle, Indianapolis and Evansville, Indiana; and 
Paducah, Kentucky. The Government has recognized the strategic importance to the war effort of this new route 
and has made available a sufficient number of aircraft to start operations by June 1, 1945. The route increases the 
company's route mileage 47% and connects the Southern and Southwestern cities your company presently serves 
with important and heavily industrialized cities in the Northeast. While its operation will probably not increase 
net earnings in the early stages of its development, it should prove a valuable long term addition to our system. 
Little Rock 
PREVIOUSLY a temporary stop, Little Rock, Arkansas, was made a permanent stop on our system on November 
10, 1944, by a decision of the Civil Aeronautics Board. This award was of considerable importance in connection with 
your company's plans for future expansion as outlined on the map showing new route applications which appears 
on the front cover of this report. It has made possible  an application for direct service between St. Louis and 
Little Rock which, if acted upon favorably, will provide us with the shortest possible great circle course between 
Chicago and Houston, and also between Chicago anq Mexico City if our Houston-Mexico City route is granted. 
Applications for New Routes 
THE map on the front cover shows all the company's pending new route applications. Hearings have been held on 
(1) the Caribbean and Latin American, (2) the New Orleans-Miami and (3) the Beaumont-Port Arthur applications, 
but examiners' reports have not yet been issued in any of these proceedings except the Caribbean and Latin American, 
in which the examiner has not recommended any routes for award to us. His recommendations will, of course, be 
contested by us before the Civil Aeronautics Board. The Board is carrying new route applications to hearing with 
all possible dispatch and the coming year should bring final decisions on most of the applications depicted by the 
map. Which, if any, of these routes may be awarded to Chicago and Southern, it is of course impossible to predict. 
Financing of New Route Operations 
OuR stock issue in 1943 resulted in net proceeds to the company of $660,000. Taken together with our other assets 
and available bank credits, this provides us with a current purchasing power sufficient not only to finance the new 
Detroit route but also to handle a reasonable number of other awards if we are fortunate enough to obtain them. 
Annual Meeting 
THE annual meeting of stockholders will be held at the company's General Offices at the Municipal Airport, Mem- 
phis, Tennessee, at 2 p.m. on Tuesday, May 1, 1945, for the purpose of electing your Board .of Directors for the 
ensuing year and transacting such other business as may come before it. Notice of this meeting is enclosed herewith, 
and it is hoped that you will be able to be present. 
Respectfully submitted, 
March 21, 1945. 
Three 
 &Cllf lY 
!&It), ~ 
[ A DELAWARE CORPORATION] 
ASSETS 
Current Assets: 
Cash on demand deposit and on hand. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $172,137.44 
United States Government obligations at cost (market quotation $731,727.50) 
(See Note 1).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727,274.06 
Accounts receivable: 
United States War Department, on service contracts, less reserve of 
$100,000.00 (See Note 2) ........................................ . 241,599.42 
Other United States Government Departments .. .................... . 96,240.25 
Traffic balances .................................................. . 173,549.45 
Due from officers and employees ............ ... ............... . .... . 8,715.54 
Sundry ......................................................... . 22,072.46 
Inventory of parts and supplies, at average cost ............ . . ......... . 164,537.98 
Other Assets: 
Special cash deposits .... ... .............................. . ......... . $ 11,481.58 
Miscellaneous investments, at cost ...... . ... . ............. . .......... . 2,281.00 
Property and Equipment: 
Cost Reserve Net 
Flight equipment. .................... . $ 849,020.27 $543,295.94 $305,724.33 
Other property and equipment ...... . ... . 408,431.40 217,010.91 191,420.49 
Work in progress ...................... . 29,861.52 29,861.52 
$1,287,313.19 $760,306.85 
De/erred Charges: 
Prepaid insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,988.09 
Other prepayments and deferred charges. ....... . . . . . . . . . . . . . . . . . . . . . . . 18,153.06 
Franchises and Goodwill  .     ............. -... -. -........ .. ...... . . . 
$1,606,126.60 
13,762.58 
527,006.34 
41,141.15 
1.00 
$2,188,037.67 
Refer to accompanying 
Four 
BALANCE SHEET DECEMBER 31, 1944---. 
LIABILITIES 
Current Liabilities: 
Accounts payable ................................................ . 
Traffic balances and deposits payable ......................... .. .... . 
Accrued salaries, wages, taxes ( other than income), insurance, etc . ..... . 
Accrued federal and state taxes on income ................ ; ..... . 
Unearned Revenue . . ............... . ......... . ... . .  
Deferred Credit: 
Profit on equipment sold to the United States Government (See Note 1) 
Reserve /or Contingencies: 
Sales of air pumps ..... 
Capital Stock and Surplus: 
Capital stock- common, no par value: 
Authorized, 500,000 shares 
Issued and outstanding, 291,687 shares (See Note 3) ............... . 
Earned surplus, since May 23, 1938, per accompanying statement ...... . 
notes to financial statements. 
Five 
$ 61,548.55 
167,009.15 
128,075.77 
130,847.13 
$1,452,533.00 
142,744.55 
$ 487,480.60 
30,103.25 
69,066.30 
6,109.97 
1,595,277.55 
$2,188,037.67 
 CHICAGO AND SOUTHERN AIR LINES, INC. 
~~~ 7tttJme,------ 
YEAR ENDED DECEMBER 31, 1944 
Operating Revenue: . 
Passenger ................................................ . 
Mail .................................................... . 
Express .................................................. . 
Excess baggage ..................................... ...... . 
Other, net ....... .. ....... ............ ... ......... .... . .. . 
Operating Expenses: 
Flying operations .......................... ........ . ...... . 
Ground operations ........................................ . 
Maintenance .... . . . ....... . .......... .. .................. . 
Passenger service ................... .............. . . .. .... . 
Traffic and advertising ............ ........ .. ........... . .. . 
General and administrative . . .................... .. ..... .. . . 
Depreciation .......................... ... ................ . 
Operating Profit ................. . ..  .........  ....  ...   .. 
Other Income: 
$2,501,635.81 
281,807.84 
107,245.02 
43,380.61 
12,643.52 
$ 565,091.99 
504,506.63 
522,843.62 
219,104.60 
343,471.97 
389,203.06 
185,311.41 
Income from Army contracts (net) ........................... $ 87,665.89 
Interest earned ... ........ . ............ ... ......... ....... . 8,602.42 
Cash discounts and miscellaneous ........................... . 3,517.91 
Other Deductions: 
Extension and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,257.81 
Interest and miscellaneous ................... . ........ . .... . 1,048.56 
Losses (net) on retirements of property .. .... . ... . ........... . 956.03 
Provision for Federal and State Taxes on Income 
(Provision for excess profits tax not required) ... . ..... .. .... . 
Provision for Possible Adjustments on Army Contracts 
(Applicable mainly to prior years) (See Note 2) .............. . 
Net Income for the Year Transferred to Surplus 
Refer to accompanying notes to financial statements. 
Six 
$2,946,712.80 
2,729,533.28 
$ 217,179.52 
99,786.22 
$ 316,965.74 
13,262.40 
$ 303,703.34 
126,000.00 
$ 177,703.34 
50,000.00 
$ 127,703.34 
 CHICAGO AND SOUTHERN AIR LINES, INC. 
~IW-----, 
YEAR ENDED DECEMBER 31, 1944 
Earned Surplus, Since May 23, 1938 
Balance, January 1, 1944, per previous published report ... . . . . . . . . .. . . . . . . . . . . . . $ 101,502.09 
Less provision for adjustment of receivables from United States War Department 
(recorded June 30, 1944, as of December 31, 1943) (See Note 2). ........ . . . . . . 50,000.00 
Balance, January 1, 1944, as adjusted ....... . .. . .. : . . . . . . . . . . . . . . . . . . . . . . . . . . $ 51,502.09 
Net income for the year ended December 31, 1944, per statement of income ..... . 127,703.34 
$ 179,205.43 
Deduct: 
Cash dividend of 12c per share paid on December 27, 1944 ....... . . . . . . . . . . . 36,460.88 
Balance, December 31, 1944 .... . ............................ .'. . ............. $ 142,744.55 
Refer to accompanying notes to financial statements. 
Seven 
 CHICAGO AND SOUTHERN AIR LINES, INC. 
NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31, 1944 
1. At December 31, 1944, there was deposited with the United States Treasury Department, 
$35,000.00 par value U. S. Treasury Notes, guaranteeing payment of income taxes (if any) 
in connection with the establishment of a replacement fund during 1942 when two air- 
planes were requisitioned by the Government. 
The aforementioned replacement fund was used during 1944 to purchase two airplanes to re- 
place those requisitioned and as soon as this transaction is reviewed and approved by the 
Internal Revenue Department (as to tax liability, if any) the Company will be in a position 
to dispose of the deferred credit of $69,066.30 appearing in the balance sheet. 
2. The Company from 1942 until June 30, 1944, performed various services for the United States 
Army Air Forces under cost-plus-fixed-fee and fixed price contracts. At December 31, 
1944, there remained a balance of $341,599.42 due on these contracts, carried as an account 
receivable against which a reserve of $100,000.00 has been provided for possible unallow- 
able or disputed costs as well as price revisions on a fixed price contract through renegoti- 
ation proceedings. The renegotiation phase is applicable to the year 1943 only, as clearance 
has been granted for 1942 and little, if any, profit was made during 1944. 
The reserve of $100,000.00 has been computed on a net basis, i.e. a gross reserve of approxi- 
mately $168,000.00, less income taxes recoverable amounting to approximately $68,000.00, 
in the event it becomes necessary to utilize the gross reserve. 
In view of the foregoing, the management believes that no further charges against income or 
surplus will be required in the final disposition of its claims against the United States Army 
Air Forces. 
3. At December 31, 1944, there were outstanding 291,687 shares of common stock, of which 5,377 
shares were represented by voting trust certificates under an agreement dated December 
31, 1935 (now terminated), and 165,166 shares by a new voting trust agreement dated 
Octo her 1, 1943. 
Of the 208,313 shares of authorized but unissued common stock, 47,639 shares are reserved 
to cover options. 
4. On January 13, 1943, bonuses, consisting in the aggregate of 1,360 shares of common stock 
of the Company, were declared, payable to an officer and three employees, said shares to 
be purchased in the open market. This distribution has been deferred due to present salary 
stabilization regulations. The market quotation of the Company's stock on January 13, 
1943, was $8.25 per share. 
Eight 
 NOONEY & Cox 
CtrttjT"ed Publi"c Accounlc 
mls 
RAILWAY EXCHANGE BUILDIN G 
ST. LOU IS 1. MO . 
To The Board of Directors of 
Chicago and ~outhern ,4ir Lines, Inc.: 
March 6, 194.5. 
We have examined the balance sheet of Chicago and Southern Air Lines, Inc., as 
of December 31, 1944, and the statements of income and surplus for the year then 
ended, have revi_ 
ewed the system of internal control and the accounting procedures 
of the Compa11y and, without making a detailed audit of the transactions, have 
examined or tested accounting records of the Company and other supporting evidence, 
by methods ~nd ~o _ 
the extent we deemed appropriate. 
Our examination was made in accordance with generally accepted auditing standards 
applicable in the circumstances and included all procedures we considered necessary; 
however, it was not practicable to confirm receivables from the United States Govern- 
ment but in this connection we satisfied ourselves by means of other auditing pro- 
cedures. 
In our opi1~ion, the accompanying balance sheet and related statements of income and 
surplus fairly present, after giving consideration to possible adjustinents of govern- 
ment receivables as explained in a note to the financial statements, the position of 
Chicago and Southern Air Lines, Inc., at December 31, 1944, and the results of its 
operations for the year then ended, in conformity with generally accepted accounting 
principles applied on a basis consistent with that of the preceding year. 
N ooNEY & Cox.