FOR THE YEAR ENDED DECEMBER 31, 
1949 
C* S, ___ .....,..) 
CHICAliD AND SOIJTHERN* AIR LINES, 1wc. 
 ROUTE MILES 
IN OPERATION. 
5 , 0 0 0 - - - - - - - - - - - 
4 , 0 0 0 - - - - - - - - - - - 
5 , 0 0 0 - - - - - - - - - - 
2 , 0 0 0 - - - - - - - - 
1,000-- 
MILLIONS OF 
a-REVENU 
PLANE MILES 
6 - - - - - - - - - 
4 - - - - - - - - 
TOTAL 
5,749 
1958 '59 '40 '41 '42 '45 '44 '45 '46 '47 '48 '49 
2,959 
INTEU- 
NATIONAL 
 CHICAGO AND SOUTHERN AIR LINES, INC. 
Municipal AirportMe.rnphis 2, Tennessee 
CARLETON PUTNAM SIDNEY A STEWART 
CHAIRMAN OF THE BOARD PRESIDENT 
REPORT TO THE STOCKHOLDERS 
Your Company's operating profit for 1949 was $1,165,060 com- 
pared to $889,338 for 1948. Income taxes amounted to $463,000 for 
1949 compared to $210,000 for 1948 with the result that net earnings 
were $630,087, slightly less than the net profit of $639,477 in 1948. 
Lower taxes in 1948 were due to carry-over tax credits from previous 
years which were not exhausted until August 1948. 
A dividend of 35 cents per share was paid on October 1, 1949- 
the first since 1945. The total amount of the dividend paid to the 
2,795 stockholders owning 509,326 shares was $178,264. 
During the year your Company felt increased competition from 
other air lines having more modern equipment. This was noticed 
primarily on our long-haul segments. An intensive sales campaign 
was put into effect during the year to offset this development. Sales 
representatives were stationed in New York, Dallas and Los Angeles 
and a more comprehensive advertising campaign was inaugurated. 
At the same time increased efforts were made to reduce costs. As a 
result seat mile costs were reduced by 7.1 % in spite of higher wage 
rates and gasoline prices as well as increased cost of materials and 
other services. 
In September an order was placed with Lockheed Aircraft 
Corporation for five of the latest type Constellations. This new 
equipment, the first of which will be delivered in the early fall of 
1950, should permit your Company to regain its share of the long- 
haul competitive business. 
In June 1949 your Company increased the number of trips to 
Kingston and Caracas from four to seven per week. These and other 
schedule changes increased revenue miles flown in 1949 by 17.9% 
over 1948. 
1 
 2 
Personnel relations remained on an excellent basis as evidenced 
by the very low rate of turnover experienced in 1949. This is also 
reflected in the friendly and cooperative spirit of our employees 
which contributed greatly to the success of our sales efforts as well 
as to the service to the public. 
There is every indication that business on your Company's do- 
mestic system will be equally as good, if not better, in 1950 than it 
was in 1949. The oil industry in Venezuela is slowing up materially 
which will have an adverse effect on international traffic. However, 
the faster service which your Company will be able to provide when 
the Constellations are in service should offset to some degree this 
decline in business activity. 
During 1949 the air lines established the finest safety record 
in the history of the industry. The record, domestically and inter- 
nationally, shows one fatality for every 100,000,000 passenger miles. 
Your Company is entering its 14th year without injury to passenger 
or crew. 
Flight delays have always been a major problem to the air lines 
and to the traveling public. It is gratifying to report that during 
1949 your Company decreased controllable delays 41 % at domestic 
stations in the face of a 5 % increase in flight departures. 
With this record of safety and reliability your Management be- 
lieves that air travel will continue to increase and that Chicago and 
Southern will get its proportion of the business. 
By authority of the Board of Directors, 
Chairman of the Board 
cS7A.0~ 
President 
March 10, 1950 
 * 
--------C* __ ~> HIGH IGHTS 
FOR TH YEAR 1949 
* 
PAID A DIVIDEND-THE FIRST PAYMENT SINCE 1945- 
AMOUNTING TO 35 CENTS PER SHARE. 
REDUCED SEAT MILE COSTS IN SPITE OF HIGHER WAGE 
RATES AND HIGHER COST OF MATERIALS AND SUPPLIES. 
INCREASED NUMBER OF MILES FLOWN WITH SLIGHT 
REDUCTION IN NUMBER OF EMPLOYEES. 
INAUGURATED DAILY SERVICE TO CARACAS. 
ORDERED FIVE NEW TYPE CONSTELLATIONS, THREE OF 
WHICH WILL BE DELIVERED IN 1950. 
~ 
IMPROVED ON-TIME OPERATIONS. 
~ 
ACHIEVED ANOTHER YEAR OF PERFECT SAFETY. 
3 
 OPERA N 
REVEN E 
THOUSANDS OF 
4 
FINANCIAL REPORT 
Your Company's net profit for the year 1949 was $630,087, 
equivalent to $1.24 a share on the capital stock after provision for 
state and federal income taxes of $463,000. This compares with a 
net profit for 1948 of $639,477, or $1.26 a share after taxes of $210,000. 
Your Company's tax liability for 1948 was reduced approximately 
$138,000 by the carry-over of losses from prior years. Without this 
tax benefit net income for 1948 would have been $501,477, or 98 cents 
a share on the capital stock. 
Operating revenues increased from $10,452,852 in 1948 to 
$12,368,524 in 1949, a gain of 18.3 %, while operating expenses in- 
creased 17.1 %. Operating profit was thus raised 31.0% from $889,338 
to $1,165,060. Passengers and excess baggage accounted for 69.2% of 
total operating revenues in 1949, a small increase over the 1948 per- 
centage, while mail pay declined slightly to 26.7% of the total. 
On your Company's domestic system, seat mile costs were re- 
duced from 4.16 cents in 1948 to 3.86 cents in 1949, and at the same 
time the yield from passenger fares rose from 5.78 cents to 5.92 cents 
 per passenger mile. The break-even load factor (based on passenger 
fares alone and before taking credit for any of the revenues derived 
from freight, express, mail, or excess baggage) was thus lowered 
from 72.0% in 1948 to 65.2% in 1949. The actual load factor fell 
three percentage points from 56.4% to 53.3 %. 
Revenue plane miles flown on domestic routes increased from 
7,095,703 in 1948 to 7,497,306 in 1949 and the ton miles of mail car- 
ried rose from 481,732 to 520,462. For this increased volume of 
service in 1949 your Company received less mail pay than in 1948 
($1,800,384 against $1,891,989), thus reducing the plane mile mail 
rate from 26.7 to 24.0 cents and the ton mile rate from $3.93 to $3.46. 
Your Company carried more ton miles of domestic cargo in 
1949 than in 1948, but received less revenue for this service as a re- 
sult of the shift of a substantial volume of cargo traffic from air 
express to air freight at the cheaper rate. 
On your Company's international system, seat mile costs were 
reduced from 4.55 cents in 1948 to 4.09 cents in 1949. For the last 
six months of 1949, the seat mile cost was 3.92 cents and the passenger 
mile yield was 7.42 cents, giving a break-even load factor of 52.8% 
on passenger revenue alone. This is the lowest break-even load factor 
NET OME 
THOUSANDS F DOLLARS 
5 
 NETW 
THOUSANDS OF 
6 
for foreign operations of any American flag carrier. The actual pas- 
senger load factor for the year 1949 was 32.7%. At this level of 
operations, many more passengers could be carried with relatively 
little added cost and most of the additional revenue would be re- 
flected in operating profit. 
Revenue plane miles flown on your Company's Caribbean 
routes increased from 806,480 in 1948 to 1,816,862 in 1949, passenger 
miles and passenger revenues more than doubled, and the volume of 
mail carried went up three-fold. 
The number of domestic passengers carried in 1949 was 313,603, 
as compared with 282,010 in 1948, but the average length of each 
passenger's trip fell from 37 5 miles to 343 miles. On international 
flights the number of passengers increased from 15,472 in 1948 to 
23,481 in 1949 and the average passenger haul went up from 853 to 
1,164 miles. 
Your Company's balance sheet at December 31, 1949, showed 
cash and Government securities of $3,345,168, exceeding total liabil- 
ities of $1,732,236 by $1,612,932, which was equivalent to $3.17 a 
share of the capital stock. Accounts receivable were $1,018,954, 
amounting to an additional $2.00 a share. Most of these receivables 
 represented current mail pay due from the United States Post Office 
and traffic balances against other air lines which are settled monthly. 
Flight equipment, consisting of twelve DC-3's and six DC-4's 
which cost $4,426,909 including spares, was depreciated to a net 
value of $735,010. All aircraft were wholly owned and fully paid 
for, and your Company had no outstanding bonds, bank loans, or 
preferred stock. Ramp, shop, hangar and office equipment costing 
$1,101,747 was depreciated to a net value of $448,504. The advance 
payment of $1,125,000 shown under "Other Assets" represented a 
down payment made to Lockheed Aircraft Corporation when the 
contract was signed for five new model 649 Constellations. 
All route development, advertising, promotional, and training 
costs were written off as incurred and no expenses of this kind were 
deferred as charges against future operations. Franchises and good- 
will were carried at the nominal value of $1. 
Out of the net income of $630,087 for 1949 a cash dividend of 
$178,264 was paid to stockholders on October 1, 1949, and the re- 
maining $451,823 was added to earned surplus, increasing the net 
book value of your Company's stock from $9.83 to $10.71 a share. 
4.59 5.98 4.50 4.26 
4.87 5.84 5.70 5.61 5.55 4.65 4.15 4.70 4.09 
.60 .55 ( .14) .oo .98 .06 .29 .27 (.51) (.11) .54 
4.65 5.20 
4.84 4.55 
.65 
REVENUES 
EXPENSES 
PROFIT or (LOSS) 
REVENUES 
PROFIT or (LOSS} 
7 
 ~ 
-~-s 
... \.. 
.... , 
Simplified Comparative Income and 
Expenditure Statements 
FOR THE YEARS ENDED DECEMBER 31, 1949 AND 1948 
1949 1948 
Amount Per$100 Amount Per $100 
of Re'Venue of Revenue 
PASSENGERS 
........ . ........ $ 8,560,862 $ 69.21 $ 7,197,189 $ 68.86 
UNITED STATES MAIL ......... 3,305,090 26.72 2,801,599 26.80 
EXPRESS AND FREIGHT ......... 429,156 3.47 378,384 3.62 
OTHER SOURCES ............ 73,416 .60 75,680 .72 
Total .......... $12,368,524 $100.00 $10,452,852 $100.00 
a Net Income of ...... $ 630,087 $ 5.09 $ 639,477 $ 6.12 
p AID IN DIVIDENDS ........... $ 178,264 $ 1.44 None None 
RETAINED IN THE BUSINESS .. . . 451,823 3.65 $ 639,477 $ 6.12 
 OPEHA TIONS 
DOMESTIC O RATIONS 
During 1949 the performance factor on your Company's domes- 
tic system was 96.8 % compared to 96.5 % for 1948. This small im- 
provement in performance does not, however, reflect the major re- 
duction in controllable delays achieved during the year. Despite a 
5 % increase in flight departures, from 42,062 in 1948 to 44,245 in 
1949, controllable delays were reduced 41 %, from 1,892 to 1,108. 
In 1949 service was inaugurated to Pine Bluff, Arkansas; and 
permission was obtained from the CAB to omit Peoria and Spring- 
field, Illinois, from your Company's routes. Peoria was an unprofit- 
able stop and Springfield has not been served recently by C&S. 
Revenue passenger miles increased 1.6% in spite of increased 
competition from new equipment operated by other air lines in this 
area w}:iich affected your Company's long-haul business adversely. 
It is confidently expected that this traffic can be regained by your 
Company when its new Constellations are put into service. 
Comparative statistics for your Company's domestic system for 
the years 1946 to 1949, inclusive, are shown on page 16. 
DO 
OPERATING 
STIC 
VENUES 
6 E PRESS, 
ff AND OTHER 
AIL 
9 
 IONAL OPERATIONS 
INTERN TI 
OPER TI 
BEV U 
In June 1949 your Company increased the number of trips to 
Kingston and Caracas from four to seven per week. This increased 
service was primarily responsible for the 125 % increase in the inter- 
national plane miles flown in 1949 over 1948. The daily service has 
put your Company in a substantially better competitive position with 
other air lines operating in this territory and has permitted it to ob- 
tain a higher percentage of the available passenger business as well 
as to carry a larger volume of freight and mail. 
Due to a recession in the Venezuelan economy during the latter 
part of 1949, revenues from your Company's international operations 
have not been as satisfactory as had been anticipated, and it appears 
that this trend may continue unless there is an improvement in the 
outlook for the all-important oil industry in Venezuela. 
On the other hand, sales of all-expense tours to Cuba and J a- 
maica have made a major contribution to your Company's interna- 
tional revenues. Intensive promotional work and sales effort resulted 
in the sale of 2,680 of these cruises in 1949 compared with 2,136 in 
1948, an increase of 25 % . 
Other air lines have in- 
troduced similar tours to 
Miami which has resulted 
in more intensive compe- 
tition for this class of busi- 
ness, and the inauguration 
of coach flights from Chi- 
cago to Miami has also 
proved highly competitive. 
Your Company's new Con- 
stellation service is looked 
to as an offset to these devel- 
opments. 
Comparative statistics for 
your Company's interna- 
tional system are shown on 
page 16. 
 Domestic mait pay is being received under a final rate order 
issued by the CAB on July 28, 1948. Under this order domestic mail 
pay for 1949 averaged 24.0 cents per plane mile. International mail 
pay is being received under temporary rate orders issued by the CAB 
on March 20, 1947 and May 6, 1948. The rate varies with miles 
scheduled. International mail pay received in 1948 was at the aver- 
age rate of $1.13 per plane mile. In 1949 the average rate was 83 
cents per plane mile and the current rate is now 70 cents per plane 
mile due to the larger number of miles being flown. These interna- 
tional mail rates are temporary and subject to retroactive adjustment 
from the beginning of foreign service on November 1, 1946. The 
final rate may be either higher or lower than the temporary rates. 
It is interesting to note that the ton-mile cost to the Government 
of transporting mail on your Company's domestic system declined 
12 % between 1948 and 1949, and 25 % between 1946 and 1949. On 
your Company's international system the decline was 49% and 77%, 
respectively.  
Under these circumstances it is not felt that any fears are war- 
ranted concerning the participation of the Government in the further 
development of your Company's routes, either domestically or inter- 
nationally. 
Your Company at present operates six DC-4 and twelve DC-3 
aircraft. The DC-3's have been depreciated to a residual value of 
'$3,000 each and the DC-4's will be depreciated to $30,000 each by 
June 30, 1950. To meet increased competition an order was placed 
in September 1949 for five of the latest type Constellations at a cost, 
including spares, of approximately $5,500,000. Your Company an- 
ticipates that it will be able to pay for three of these aircraft from its 
cash reserves. The last two, which will be delivered in the early 
spring of 1951, will be financed by a bank loan. No difficulty is an- 
ticipated in making satisfactory arrangements for this loan. Your 
Company plans to sell the majority of its DC-4's after the Constella- 
tions have been received. 
MAI 
EQU 
11 
 Chicago's Downtown 
Ticket Office is at 
65 E. Monroe Street 
In St. Louis the C&S 
Ticket Office is in 
the Hotel Statler 
Kansas Citians Are 
Familiar with C&S 
at Hotel Muehlebach 
Houston, Texas, is 
C&S Aerial Gateway 
to all Latin America 
12 
TROIT(j 
GHIGAGO,n,: . /~oLEoo jl 
,.f OFT. WAYNE 
sT ~RE 
crj 1NrnANAI1ous 
I\ANSAs., .. rnriis 
1~:~E 1 
CITY.... ~-.. 0 EVANSVILLE 
' -., I 
SPRINGFIELDO- l~;PADUCAH 
~ 
.... MEMPHIS 
LITTLE ROCK 
Q---- 
HOT SPRINGSQ~QPINE~ 
f 'UFF Q GREENWOOD 
OEL '\ 
DORADO O JACKSON 
SHREVEPORT0li \._ , 
,.- 
08:EMti~ n!O 
HOUSTON(.~~ 
* 
Moisant International 
Airport in New 
Orleans, Louisiana 
I n Havana, Cuba, the 
C&S Ticket Office is 
"Located on The Prado 
Hot Springs, Ark., 
a National Park and 
Famous Health Spa 
C&S Headquarters in 
Caracas, F enezuela, 
Near Plaza Bolivar 
13 
 PERSONNEL OF 
CHICAGO 
SOUTHER 
14 
PERSONNEL 
Your Company's employee termination rate dropped to an av- 
erage of 1.59% per month for the year 1949. This compares with 
what is considered a normal turnover ratio of 3 % for industry in gen- 
eral. This stable working force is indicative of the high morale of 
your Company's personnel. 
Wages and salaries amounting to $5,082,442 were paid in 1949 
and the total number of employees at the end of the year was 1,345. 
In 1949 your Company offered a program in the principles and 
methods of supervision to its first line of management personnel. In 
addition, training facilities were offered to other groups of employees. 
Your Company carried on collective bargaining with six unions 
during the year without incident or work stoppage. It granted an 
improved sick leave policy and continued other personnel benefit 
programs. These included free and reduced rate transportation, paid 
holidays and vacations, Credit Union sponsorship, and a comprehen- 
sive group insurance plan. An employee-edited house organ, 
"Sky Steps," was published monthly. 
 PUBLIC RELATIONS 
Newspapers, magazines, radio, direct mail and posters were 
used during 1949 to advertise the services of your Company to the 
public. In addition, news-worthy information regarding the affairs 
of Chicago and Southern appeared in daily newspapers and national 
magazines throughout this country, Cuba, Jamaica and Venezuela. 
Nine radio stations in as many cities used the aviation news programs 
prepared by your Company as a weekly public service feature, with 
C&S traffic managers acting as commentators. 
STOCKHOLDERS 
Your Company had 2,795 stockholders residing in 39 states, the 
District of Columbia, and the Canal Zone. On September 20, 1949, 
the average holding was 182 shares and 79% of the stockholders 
owned 100 shares or less. The holdings of 2,674 stockholders were 
registered directly in the names of individuals on the books of the 
Company. 
NERS OF 
ICAGO AND 
UTHERN 
15 
 COMPARA IVE 
OPERA ING 
STATIS ICS 
16 
CHICAGO AND SOUTHERN AIR LINES, INC. 
DOMESTIC 
Operating Revenue 
Passenger and excess baggage . . .. . .. ... . 
United States Mail ... ....... . ....... .. . 
Express and freight .. . .. . ... . . .. . .. . . . . 
Miscellaneous . . . . ...... . . . .. . . . . . . ... . 
Total Operating Revenues . ..... . . .. .. .. . . 
Total Operating Expenses . .... . . .. ...... . 
Operating Profit or Loss* ... .. . . .. . . . .. .. . 
Other Deductions (net) ..... . . . ......... . 
Provision for Federal and State Income Taxes 
Net Income or Loss* 
Operating Revenue 
Passenger and excess baggage ... .. ... .. . 
United States Mail .. . .... . ...... . .. .. . 
Express and freight . .. . . . .... . .. . ..... . 
Miscellaneous . . ............... .. .. ... . . 
Total Operating Revenues ..... . . . ... .... . 
Total Operating Expenses . . .. . ....... ... . 
Operating Profit or Loss* .. .. . . . . ... .... . . 
Other Deductions (net) . . .... . ...... . .... . 
Provision for Federal and State Income Taxes 
Net Income or Loss* . ....... ... . .. .... . . . 
INTERNATIONAL 
Operating Revenue 
Passenger and excess baggage ....... .. . . 
United States Mail ......... . . ... .. ... . . 
Express and freight . . . . . .. .. . . . . ... .. . . 
Miscellaneous .... .... ... ...... . ... . ... . 
Total Operating Revenues . ......... . .. . . . 
Total Operating Expenses . ... . ... . ... . .. . . 
Operating Profit or Loss* .. . . .. .. . . . ... . . . 
Reserve Provision for Foreign Operations . . . 
Other Income or Deductions* (net) ....... . 
Provision for Federal and State Income Taxes 
Net Income or Loss* 
Operating Revenue 
Passenger and excess baggage . ... . ..... . 
United States Mail .. . . .. . ... ... .. . ... . . 
Express and freight . . .. .. .... . ........ . 
Miscellaneous .. .. . .. . ....... . ... . .... . . 
Total Operating Revenues . ........... .. . . 
Total Operating Expenses .. . ... .. . . .... . . 
Operating Profit or Loss* . .. ... . . . . .. . ... . 
Reserve Provision for Foreign Operations .. . 
Other Income or Deductions* (net ) .. .. . . . . 
Provision for Federal and State Income Taxes 
Net Income or Loss* ... . . . .. ... . .. . .... . . 
1949 
$6,407,449 
1,800,384 
319,722 
56,175 
$8,583,730 
7,783,557 
$ 800,173 
16,322 
313,000 
$ 470,851 
3.18 
.89 
.16 
.03 
4.26 
3.86 
.40 
.01 
.16 
.23 
1949 
$2,153,413 
1,504,706 
109,434 
17,241 
$3,784,794 
3,419,907 
$ 364,887 
65,000 
9,349 
150,000 
$ 159,236 
2.58 
1.80 
.13 
.02 
4.53 
4.09 
.44 
.08 
.01 
.18 
.19 
1948 1947 
TOTAL AMOUNTS 
$6,148,222 $5,774,239 
1,891,989 1,465,102 
321,940 340,486 
70,090 71,664 
$8,432,241 $7,651,491 
7,797,320 7,853,822 
$ 634,921 $ 202,331 * 
42,784 29,998 
146,000 
$ 446,137 $ 232,329* 
CENTS PER SEAT MILE 
3.28 3.00 
1.01 .76 
.17 .18 
.04 .04 
4.50 3.98 
4.16 4.09 
.34 .11* 
.02 .01 
.08 
.24 .12* 
19-!8 1947 
TOTAL AMOUNTS 
$1,048,967 $ 455,236 
909,610 443,812 
56,444 14,466 
5,590 161 
$2,020,611 $ 913,675 
1,766,194 955,092 
$ 254,417 $ 41,417* 
2,923 2,257* 
64,000 
$ 193,340 $ 43,674* 
CENTS PER SEAT MILE 
2.70 2.31 
2.34 2.25 
.1 5 .07 
.01 
5.20 4.63 
4.55 4.84 
.65 .21* 
.01 .01 * 
.16 
.50 .22* 
t International Ser'Vice was inaugurated on No'Vember 1, 1946. 
1946 
$6,699,813 
1,672,872 
218,038 
24,138 
$8,614,861 
9,221,022 
$ 606,161 * 
17,237 
207,346 Credit 
$ 416,052* 
3.41 
.85 
.12 
.01 
4.39 
4.70 
.31 * 
.01 
.11 Credit 
.21* 
1946t 
$ 61,234 
69,580 
4,629 
8 
$ 135,451 
224,624 
$ 89,173* 
654* 
29,865 Credit 
$ 59,962* 
2.65 
3.02 
.20 
5.87 
9.74 
3.87* 
.03* 
1_:]_Q_ Credit 
2.60* 
-- 
 CHICAGO AND SOUTHERN All\ LINES, INC. 
1949 1948 
OPERATING REVENUES: 
Passenger and excess baggage ....... $ 8,560,862 $ 7,197,189 
United States Mail (Note 1) ....... 3,305,090 2,801,599 
Express and freight ................ 429,156 378,384 
Miscellaneous (Net) .............. 73,416 75,680 
Total operating revenues ....... $12,368,524 $10,452,852 
OPERATING EXPENSES: 
Flying and ground operations ....... S 4,980,602 $ 4,023,103 
Maintenance ..................... 1,955,808 1,960,555 
Traffic, sales and advertising ........ 2,382,452 1,967,533 
General and administrative ......... 782,202 718,031 
Depreciation (Note 3) ............. 1,102,400 894,292 
Total operating expenses ....... $11,203,464 $ 9,563,514 
NET INCOME FROM 
OPERATIONS .................. S 1,165,060 $ 889,338 
Reserve provision for foreign operations 65,000 
Other deductions (Net) .............. 6,973 39,861 
NET INCOME BEFORE INCOME 
TAXES ......................... $ 1,093,087 $ 849,477 
PROVISION FOR FEDERAL AND 
STATE INCOME TAXES (Note4) 463,000 210,000 
NET INCOME ................... $ 630,087 $ 639,477 
1949 
BALANCE DECEMBER 31, 1948 . . . . . . . . . . . . . . $ 111,255 
Net income for the year ended December 31, 1949 . . . 630,087 
$ 741,342 
Cash dividend of 35 a share . . . . . . . . . . . . . . . . . . . . . 178,264 
BALANCE DECEMBER 31, 1949 . . . . . . . . . . . . . . $ 563,078 
The accompanying notes constitute an integral part 
of these statements. 
ST EMENTS 
OF COME 
For th ears ended 
Dec. 31 1949 and 1948 
ST TEMENT 
OF ARNED 
SU PLUS 
Since ay 23, 1938 
Year ded Dec. 31, 1949 
17 
 AS TS 
18 
CURRENT ASSETS: 
Cash ........................... . 
United States Government securities .. 
Receivables from- 
United States Post Office ......... . 
Air lines, customers, agencies, etc .. . 
Maintenance and operating supplies, 
at average cost ................. . 
Total current assets ............ . 
OTHER ASSETS: 
1949 
$1,345,168 
2,000,000 
293,364 
725,590 
171,697 
$4,535,819 
Advance payment on flight equipment 
(Note 2) . . . . . . . . . . . . . . . . . . . . . . . $1,125,000 
Advances for leased facilities, being 
amortized . . . . . . . . . . . . . . . . . . . . . . 211,584 
Other prepayments . . . . . . . . . . . . . . . . 56,248 
Miscellaneous . . . . . . . . . . . . . . . . . . . . 141,793 
OPERATING PROPERTY AND 
EQUIPMENT: 
Cost 
Flight 
Equipmmt 
1949 . . . . . $4,426,909 
1948 . . . . . 4,109,679 
Other 
Property and 
Equipment 
$1,101,747 
1,050,237 
Depreciation reserves (Note 3) 
1949 . . . . . $3,691,899 $ 653,243 
1948 . . . . . 2,752,867 523,409 
FRANCHISES AND GOODWILL 
$1,534,625 
$5,528,656 
4,345,142 
$1,183,514 
$ 1 
$7,253,959 
1948 
$1,320,156 
999,985 
852,909 
718,297 
198,291 
$4,089,638 
$ 
219,485 
61,490 
152,677 
$ 433,652 
$5,159,916 
3,276,276 
$1,883,640 
$ 1 
$6,406,931 
CURRENT LIABILITIES: 
Accounts payable and accrued 
liabilities ...................... . 
Accrued federal and state income taxes 
Air travel plan deposits ........... . 
Total current liabilities ....... . 
UNEARNED TRANSPORTATION 
1949 
$ 922,353 
498,244 
202,300 
$1,622,897 
REVENUE . . . . . . . . . . . . . . . . . . . . . . $ 109,339 
RESERVE FOR FOREIGN 
OPERATIONS .. .. .. . .. . .. . .. .. . $ 65,000 
CAPITAL STOCK AND SURPLUS: 
Capital stock- authorized 650,000 
shares, without nominal or par 
value; issued and outstanding 
509,326 shares ................. . 
Earned surplus since May 23, 1938 .. . 
$4,893,645 
563,078 
$5,456,723 
1948 
$ 865,289 
210,000 
206,125 
$1,281,414 
$ 120,617 
$ 
$4,893,645 
111,255 
$5,004,900 
$7,253,959 $6,406,931 
The accompanying notes constitute an integral part of these statements. 
LIABI ITIES 
CAP AL 
19 
 NOT 
FINA 
STATEM 
20 
CHICAGO AND SOUTHERN Alll LINES, INC. 
1. Domestic mail revenue from the United States Government has 
been based on final rates fixed by the Civil Aeronautics Board 
in a rate order issued on July 28, 1948. 
International mail revenue from the United States Government 
has been based on temporary rates fixed by the Civil Aero- 
nautics Board in rate orders issued on March 20, 1947, and 
May 6, 1948. The final rates for international mail pay will 
be retroactive to the beginning of service on November 1, 
1946, and may be either higher or lower than the temporary 
rates. 
2. The Company has entered into a contract with Lockheed Air- 
craft Corporation for the purchase of five Model 649 Con- 
stellation aircraft to be delivered three in the fall of 1950 and 
two in the spring of 1951. These aircraft, together with the 
necessary spares, will cost approximately $5,500,000. An ad- 
vance payment of $1,125,000 has been made to Lockheed and 
the remainder of the purchase price is payable upon delivery. 
5. The Company operates a fleet of 12 DC-3 and 6 DC-4 aircraft. 
All of the DC-3 aircraft ( costing $1,304,830 including spares) 
were fully depreciated to a residual value of $3,000 each at 
December 31, 1948. The DC-4 aircraft ( costing $3,122,079 
including spares) are being depreciated to a residual value of 
$30,000 each by June 30, 19 50. 
4. The provision for federal income tax for the year 1948 was re- 
duced approximately $138,000 by the carry-over of losses from 
prior years under the provisions of the Internal Revenue Code. 
Net income for 1948 without this tax benefit would have been 
$501,477. 
5. Stock purchase warrants have been granted to two officers, en- 
titling one to acquire 10,000 shares of capital stock and the 
other to acquire 5,000 shares of capital stock at a price of $10 
per share prior to 1956. The market quotations of the capital 
stock at the date of fixing the price of the warrants were less 
than $10. 
 ARTHUR ANDERSEN & Co. 
ACCOUNTANTS AND AUDITORS 
506 OLIVE STREET 
ST. Lours 1 
TO THE STOCKHOLDERS OF 
CHICAGO AND SOUTHERN AIR LINES, INC.: 
We have examined the balance sheet of CHICAGO 
AND SOUTHERN AIR LINES, INC. (a Delaware 
corporation) as of December 31, 1949 and the related 
statements of income and surplus for the year then ended. 
Our examination was made in accordance with generally 
accepted auditing standards, and accordingly included 
such tests of the accounting records and such other audit- 
ing procedures as we considered necessary in the circum- 
stances. 
In our opinion, the accompanying balance sheet and 
related statements of income and surplus present fairly 
the financial position of Chicago and Southern Air Lines, 
Inc. as of December 31, 1949 and the results of its op- 
erations for the year then ended, and were prepared in 
conformity with generally accepted accounting prin- 
ciples applied on a basis consistent with that of the pre- 
ceding year. 
St. Louis, Missouri 
February 10, 1950 
AU TORS' 
CER IFICATE 
21 
 * 
- ------CaMPARAT~ 
-------------* ~TAT/ST/CS---~ 
Net Net Income Net Income Dividends Paid Numb'er Wa,ges Revenue Aoailable nevenue l1c1ssenger 
Opel'atin~ Operatin~ Income befol'e Income  after Income Taxes on Common Stocfl Earned of and l1lane Miles Flown Seat Miles Flown Passenger Miles Flown Load Factor 
Reoenues Expenses from Op- Income Taxes 
Per Per Surplus Persons Salaries 
el'ations Taxes Total Share Total Share 
Employed Paid Domestic lntemat'l Domestic Intemat'I Domestic Intemat'l Domestic Intemat'l 
THOUSANDS THOUSANDS THOUSANDS THOUSANDS THOUSANDS THOUSANDS 
DOLLIH\S THOUSANDS DOLLARS THOUSANDS THOUSANDS THOUSANDS THOllSANIJS THOUSANDS THOUSANIJS THOUSANDS THOUSANUS PERCENT l'EI\GENT 
OF DOLLARS OF UOLLARS OF DOLLARS OF DOLLARS OF DOLLAl\S OF DOLLARS UF DOLLARS UF DOLLARS OF DOLLARS OF MILES OF MILES OF MILES OF MILES .OF MILES UF MILES 
1949 12,369 11,204 1,165 1,093 463 630 $ 1.24 178 $0.35 563 1,345 5,082 7,497 1,817 201,599 83,559 107,440 27,327 53.3% 32.7% 
1948 10.453 9,564 889 849 210 639 1.26 None None 111 1,350 4,576 7,096 806 187,381 38,854 105,744 13,196 56.4 34.0 
1947 8,565 8,809 244* 276* None 276* 0.54* None None 1,s82t 1,394 4,433 7,118 473 192, 132 19,747 112,564 6,700 58.6 33.9 
1946 8,750 9.445 695* 713* 237 476* 0.93* None None 719t I, 771 4,753 8,108 74 196,290 2,306 137,844 895 70.2 38.8 
1945 4,849 4,556 293 298 125 173 0.56 77 0.25 288 1,375 2.481 5,279 (a) 109,596 (a) 86,877 (a) 79.3 (a} 
1944 2,947 2,775 172 223 94 129 0.44 73 0.25 193 761 2,337 2,882 (a) 59,654 (a) 49,242 (a) 82.6 (a) 
1945 2,268 2,243 25 168 68 100 0.34 143 0.625 . 100 932 2,730 2,179 (a) 42,057 (a) 35,293 (a) 83.9 (a) 
1942 2,100 1,652 448 380 162 218 . 0.95 84 0.50 133 890 1,251 2,210 (a) 45,720 (a) 28.438 (a) 62.2 (a) 
1941 1,732 1,735 3* 23 24 I* 0.01* None None 35 401 760 2,328 (a) 46,813 (a) 23.414 (a) 50.0 (a) 
1940 I ,191 1,235 44* 52 3 49 0.16 None None 8 272 568 1,983 ( a) 32,152 (a) 15,979 (a) 49.7 (a) 
1959 863 776 87 81 22 59 0.35 15 0.15 65 163 391 1,769 (a) 15,932 (a) 9,242 (a) 58.0 (a) 
1958 746 660 86 79 10 69 0.44 None None 48 147 315 1,442 (a} 14,357 (a) 6,895 (a) 48.0 (a) 
* Loss Note: ( a) International Service Was Inaugurated on November I, 1946 
 Credit 
t Deficit 
 DIRE TORS 
OFFI RS 
CHICAGO AND SOUTHERN AIR LINES, INC. 
GENERAL OFFICES, MEMPHIS MUNICIPAL AIRPORT, MEMPHIS 2, TENNESSEE 
CORPORATE OFFICE, 100 WEST TENTH STREET, WILMINGTON, DELAWARE 
SIDNEY A. STEWART 
JUNIUS H. COOPER 
CARLETON PUTNAM 
L. RAYMOND BILLETT 
JOHN R. LONGMIRE 
CARLETON PUTNAM ................................... Chairman of the Board 
SIDNEY A. STEWART ............................................. President 
JUNIUS H. COOPER .................................. Vice President-Finance 
WILLIAM T. ARTHUR ............................. Vice President-Operations 
R. S. MAURER ............. . ................. . Secretary and General Counsel 
T. F. HAMBLETON ............................................... Treasurer 
R. S. SCRIVENER ......................................... Assistant Treasurer 
E. MURRAY ............................................ . Assistant Secretary 
DIVI ON MANAGERS 
24 
OPERATIONS DIVISION 
WILLIAM T. ARTHUR 
Vice President-Operations 
TRAFFIC AND SALES DIVISION 
T. M. MILLER 
General Traffic and Sales lvl anager 
TREASURY DIVISION 
JUNIUS H. Coo PER 
Vice President-Finance 
LEGAL DIVISION 
R. s. MAURER 
Secretary and General Counsel 
PERSONNEL DIVISION 
w. T. BEEBE 
Director of Personnel 
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 
CO-TRANSFER AGENT 
NORTHERN TRUST COMPANY 
South LaSalle & West Monroe Streets 
Chicago, Illinois 
CO-REGISTRAR 
AMERICAN NATIONAL BANK AND 
TRUST COMPANY OF CHICAGO 
Chicago, Illinois 
LISTED 
Printed in U.S.A. 
NEW YORK CURB EXCHANGE AND 
MIDWEST STOCK EXCHANGE 
Designed and produced by PICK-S, N. Y. 
 MILLIONS OF 
AVAILABLE 
TOTAL 
'285 85 
250- SEAT MILES ___ _ INTER- 
NATIONAL 
1 5 0 - - - - - - - - - - 
1 0 0 - - - - - - - - 
125-- MILLIONS OF- - - - - 
REVENUE 
' mo-PASSENGER- - 
MILES 
7 5 - - - - - - - - - 
1958 '59 '40 '41 '4'2 '45 '44 '45 '46 '47 '48 '49 
202 
DOMESTIC 
'27 
INTER- 
NATIONAL 
108 
DOMESTIC 
 CHICAliO 
 ANO 
 SOIJTHERN 
AIR LINES, 
INC. 
* 
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~