CHICAGO AND SOUTHERN AIR LINES,, INC. 
 as reflected in statistical comparison with 1951 
Per Cent 
1952 
Net income and special items 
1951 Change 
($267,983 in 1951) ---------------------------- $ 1,338,510 $ 1,130,959 +18.4% 
Per share _____________ ---- ___ 
__ 
------------- $2.63 $2.22 +18.4 
Dividends paid per share ________________________ $ .75 $ .65 +15.4 
Earned surplus at end of year__ __________________ $ 2,920,862 $ 1,964,347 +48.7 
Book value per share at end of year ________ $15.34 $13.46 +14.0 
Total non-mail revenues-Domestic $ 13,271,753 $ 10,623,815 +24.9 
-International 3,178,622 2,556,872 +24.3 
Mail pay -Domestic $ 972,813 $ 1,202,976 -19.1 
-International 1,435,882 1,853,267 -22.5 
Mail ton miles -Domestic 817,796 669,611 +22.1 
-International 60,270 41,610 +44.8 
Operating profit -Domestic $ 1,439,091 $ 916,878 +57.0 
-International 1,106,798 948,194 +16.7 
Revenue plane miles -Domestic 9,623,860 8,507,601 +13.1 
- International 1,655,686 1,682,490 - 1.6 
Available seat miles -Domestic 325,087,934 269,001,576 +20.8 
-International 76,897,010 77,414,401 - 0.7 
Revenue passenger miles-Domestic 201,084,672 168,150,135 +19.6 
-International 38,239,237 31,805,784 +20.2 
Passenger load factor -Domestic 61.9% 62.5% - 1.0 
-International 49.7% 41.1% +20.9 
Available ton miles -Domestic 39,736,664 33,007,687 +20.4 
-International 10,655,954 10,788,016 - 1.2 
Revenue ton miles -Domestic 22,352,955 18,416,312 +21.4 
-International 5,170,798 4,034,192 +28.2 
Average daily hours of revenue flight 
per airplane -Constellations 9: 12 8: 16 +11.3 
-DC-3's 9:07 8:48 + 3.6 
 CHICAGO AND SOUTHERN AIR LINES,, INC. 
REPORT TO THE SHAREHOLDERS 
Your Company's net profit for the year 
1952 was $1,338,510, equivalent to $2.63 a 
share on the capital stock, after provision for 
income taxes. This compares with a net profit 
and special items of $1,130,959, or $2.22 a 
share for 1951, which included $267,983 rep- 
resenting a net capital gain on DC-4 aircraft 
and equipment sold, less a foreign reserve 
provision. There were no similar special items 
in 1952. Profits have been earned on both 
domestic and international operations in 
every year since 1948. 
Four dividends totaling 75 cents a share 
were paid in 1952 compared with 65 cents 
paid in 1951, 50 cents in 1950, and 35 cents 
Ill 1949. 
Revenues and Earnings 
Reach New High 
Operating revenues for the year 1952 to- 
taled $18,859,070, a gain of 16% over 1951. 
Passenger revenues increased 24%, express 
revenues increased 33%, and freight revenues 
increased 50%, Although a larger volume of 
mail was carried, mail pay declined 21 % and 
represented only 13% of total operating reve- 
nues in 1952 against 19% in 1951. Our operat- 
ing profit for 1952 was $2,545,889 compared 
with $1,865,072 for 1951. While actual oper- 
ating figures for other air lines are not yet 
available, our 36% gain in operating profit 
For the year ended December 31, 1952 
contrasts sharply with the preliminary esti- 
mate for the industry as released by the Air 
Transport Association. This estimate indi- 
cates that the operating profit of the 14 do- 
mestic trunk lines was 9.9% lower in 1952 
than in 1951, the operating profit of the 11 
international carriers was 67.1 % lower, and 
the operating loss of the 18 local service air- 
lines was 25 times greater. 
The favorable showing of C&S in this com- 
parison was achieved by careful control over 
costs and by expansion of service closely 
keyed to demand, permitting high utilization 
of equipment and personnel. For example, 
during the first nine months of 1952 (the 
latest period for which industry figures are 
available) our overall fleet utilization was the 
highest of any of the domestic trunk lines, 
averaging 9:05 hours of revenue flying a day 
for each airplane. This utilization was raised 
to 9:08 hours a day for the entire year. The 
increased productivity of our personnel is in- 
dicated by the fact that in 1952 we operated 
15% more available ton miles of service than 
in 1951 and carried 23% more ton miles of 
revenue traffic with an increase of only 5% 
in the average number of employees. Thus, 
in spite of inflationary increases in prices and 
wages, our ton mile and passenger mile costs 
were reduced in 1952 from 1951, again re- 
versing the industry trend, which has been 
toward higher costs in these categories. 
 OPERATING 
REVENUES 
In millions of dollars 
- 
197 
18 
17 * INTER 
l6J NATIONAL 
15 
14 
13 
12 
II 
10 
9 
8 
7 DOMESTIC 
6 
5 
4 
3 
2 
1936 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50 '51 1952 
*International service inaugurated November 1, 1946 
financial Position 
Current assets at December 31, 1952, stood 
at $5,905,171 of which $3,605,238 represented 
cash and Government securities. Current li- 
abilities were $3,845,828, leaving working cap- 
ital of $2,059,343. Our bank loan, which had 
a balance of $1,500,000 outstanding at De- 
cember 31, 1951, was paid in full in 1952. 
Flight equipment, including six Constella- 
tions and twelve DC-3's, together with all 
spare engines, propellers, and parts for main- 
tenance, was carried at a net depreciated value 
of $4,615,888. Our DC-3's have been fully 
depreciated to a residual value of $3,000 each 
and our Constellations are being depreciated 
to a residual value of $50,000 each by De- 
cember 31, 1955. 
In addition to our conservative deprecia- 
tion policy, we have continued to charge off 
all training and development costs as in- 
curred, and no expenses of this kind have 
been deferred to burden future operations. 
Out of the net profit of $1,338,510 for the 
year, $381,995 was distributed to our share- 
holders in dividends and the remaining 
2 
$956,515 was added to earned surplus, increas- 
ing this to $2,920,862 at December 31, 1952. 
The shareholders' equity thus increased dur- 
ing 1952 from $6,857,992 to $7,814,507, rais- 
ing the book value of the common stock from 
$13.46 to $15.34 a share. 
Mail Rates 
Under our final domestic mail rate, which 
was unchanged throughout the year, we re- 
ceived mail pay of $972,813 in 1952, a reduc- 
tion of 19% from the $1,202,976 received in 
1951. At the same time mail loads increased 
22%, reducing our mail compensation on a 
ton mile basis by 33%. 
On August 1, 1952, our final international 
mail rate was opened for review and a lower 
final rate was made effective from that date 
forward. Under these final rates we received 
$1,435,882 of international mail pay in 1952, 
a reduction from 1951 of 23% in dollar 
amount and 47% in ton mile yield. 
The Post Office Department has petitioned 
the United States Court of Appeals for the 
District of Columbia Circuit to review the 
 CAB decision not to offset domestic profits 
against international mail pay need in estab- 
lishing our final international mail rate which 
was set in October 1951. We are supporting 
the CAB decision in this appeal. 
Taxes 
Our Company's federal income taxes for 
1952 amounted to $1,194,000 while federal 
taxes paid on gasoline and oil totaled 
$205,000. In addition, we collected federal 
transportation taxes of $1,740,000 from our 
passengers and shippers and paid this over 
to the Government. The Government derived 
in taxes from our operation more than I 
times the amount paid to us in subsidy. 
Merger Agreement 
On April 24, 1952, one of the most impor- 
tant and constructive steps in our Company's 
history was taken when C&S and Delta Air 
Lines, Inc., executed an agreement calling 
for the consolidation of the two companies. 
This initial agreement, reached after several 
months of extensive negotiations, was fol- 
lowed by the execution of a final definitive 
agreement by all members of the Boards of 
Directors of both companies on July 8, 1952. 
As you have been advised since the merger 
was first announced, the major provisions of 
the underlying agreements are: 
(1) In exchange for their common stock, C&S 
stockholders will receive $10,695,846 (equiva- 
lent to $21.00 a share) of the surviving corpo- 
ration's 5% convertible subordinated deben- 
tures, maturing 20 years from date of issue. 
(2) The debentures are to be convertible at any 
time before maturity into common stock of the 
surviving corporation at the rate of one share 
of stock for each $35 face value of debentures, 
with provisions protecting the C&S stockhold- 
ers against dilution of the conversion privilege. 
(3) The debentures are callable at premiums of 
3% during the first two years after issuance, 
at 2% during the third year, and at I% during 
the fourth year. Not more than 30% of the 
aggregate amount can be called during the 
first two years. 
( 4) The merger agreement provides that three of 
the C&S directors (Carleton Putnam, Sidney 
A. Stewart, and John R. Longmire) will serve 
on the Board of Directors of the surviving cor- 
poration. In addition, Carleton Putnam, Chair- 
man of the Board of C&S, will occupy a similar 
position in the merged company; C. E. Wool- 
man, President and General Manager of Delta, 
350 
325 
_ AVAILABLE 
SEAT MILES 
300 
275 
250 
225 
REVENUE 
__.... 200 PASSENGER 
MILES 
175 
150 
125 
100 
75 
50 
25 
0 
1936 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50 '51 1952 
38.2 38.4 48.0 58.0 49.7 50.0 62.2 83.9 82.6 79.3 70.2 58.6 56.4 53.3 56.3 62.5 61.9 
3 
% LOAD FACTOR 
Percentage of seats 
occupied 
 .'T(' 
" 
"> 
"b' 
~-:::::- 
~-:::::-~,.. 
~=--- "'s-~ 
~'' c-- 
-:::::-~ 
-- 
~ 
s-~~ ;,.-' PITTSBU 
--- 
INDIANAPOLIS 
EMPHIS 
== C & S-Trans World Air- 
lines through plane service 
Houston-New York via St. 
Louis and Pittsburgh. 
  C & S-Trans World Air- 
lines through plane service 
Houston-New Yo-rk via 
Memphis, Indianapolis, and 
Pittsburgh. 
will retain that position in the merged com- 
pany; and Sidney A. Stewart, President of 
C&S, will become Executive Vice President of 
the surviving corporation. 
At hearings before the Civil Aeronautics 
Board it was also announced that other officers 
of the merged company would include Junius 
H. Cooper as Vice President-Finance, R. S. 
Maurer as Vice President-Legal, and Todd 
G. Cole as Vice President-Comptroller. Mr. 
Cooper is Vice President-Finance of C&S; Mr. 
Maurer is Vice President-Secretary and Gen- 
eral Counsel of C&S; and Mr. Cole is Comp- 
troller and Assistant Secretary of Delta. It is 
anticipated that other personnel of the two 
companies will be similarly integrated. 
4 
Studies made by the managements of the 
two companies in preparation for hearings 
before the Civil Aeronautics Board support 
the conclusion that the Delta-C&S combina- 
tion is one of the most logical and desirable 
in the entire aviation industry, both from the 
standpoint of assets, routes, equipment and 
personnel, and from the standpoint of econ- 
omies and increased revenues which should 
assure continued and increasingly profitable 
operations. The combination should benefit 
not only the stockholders and employees of 
both companies, but should also benefit the 
public through improved and additional serv- 
ices. The CAB has stated that the merger will 
eliminate any need for subsidy for domestic 
operations. Accordingly, the Government will 
also benefit from the proposed consolidation. 
The proposed merger was given expeditious 
treatment by the governmental authorities 
concerned. Following hearings in August, the 
Board, on December 31, 1952, issued its 
opinion and order approving the merger, with 
the approval of the President of the United 
States to the extent required by law. These 
approvals imposed no conditions or restric- 
tions which would prohibit through flights 
between points on the separate routes of the 
two companies, leaving the surviving corpora- 
tion free to develop fully the traffic potential 
of the consolidated route system. The CAB's 
order also adopted the employee protective 
conditions suggested by C&S and Delta, with 
certain modifications. 
Under no circumstances should the ref- 
erences herein contained be considered as a 
proxy solicitation. The full text of the merger 
agreement and necessary explanatory mate- 
rials will be supplied to each stockholder 
when the agreement is submitted for approval 
at a special stockholders' meeting to be called 
in April. If approved by the stockholders, it 
is believed that the merger can be concluded 
promptly thereafter. 
Annual Shareholders' Meeting 
In the past, the annual meeting of the 
Company's shareholders has been held on the 
 first Tuesday in May of each year. At their 
regular meeting of January 22, 1953, the Di- 
rectors of the Company amended the Com- 
pany's by-laws so as to change the annual 
meeting date to the first Tuesday in October. 
The purpose of this change was to avoid any 
possible conflict between the annual meeting 
and the special shareholders' meeting to be 
called m connection with the C&S-Delta 
merger. 
Service to San Juan 
On January 10, 1953, we inaugurated week- 
ly Constellation service from New Orleans to 
San Juan, Puerto Rico, with intermediate 
stops at Port-au-Prince, Haiti, and Ciudad 
TO: 
MINNEAPOLIS 
ST. PAUL 
Trujillo, Dominican Republic. This com- 
pletes activation of the Company's interna- 
tional routes, with the exception of those few 
intermediate cities and certain point-to-point 
traffic for which operating clearance has not 
yet been obtained from the foreign govern- 
ments involved. The initial weekly service to 
Puerto Rico will be increased in frequency 
as traffic demand warrants and new aircraft 
now on order become available. 
Interchange with TWA 
The CAB has approved an interchange 
agreement between C&S and TWA under 
which through flights without change of plane 
will be operated between Houston and New 
TO: 
TO - 
~~;;~~D -----CH I CAGO 
MONTREAL 
BUFFALO 
BOSTON 
SEATTLE 
TO: 
DENVER 
OMAHA ------- 
SA/,~~E CITY 
CITY - 
10S ANGELES ------- 
SAN FRANCISCO 
TO: 
Ti.JCSON 
PHOENIX 
LOS ANGELES 
TO: ~ 
OKLAHOMA CITY 
TULSA 
F'T. WAYNE TO: 
TERRE HAUTE :~::..~GGT~N 
1 
C. - - - - - - - - PHIL.ADELPHIA 
- - - - - - - - ------ NEW YOIK 
INDIANAPOLIS BOSTON 
----- 
MPHIS 
EENWOOO 
NASHVILLE 
WASHINGTON 
NEW YORK 
~ 
TO: 
PORT AU PRINCE 
HAITI 
CIUDAD TRUJILLO 
DOMINICAN REPUBLIC 
 York via St. Louis and Pittsburgh, with an 
alternate routing via Memphis, Indianapolis, 
and Pittsburgh. The interchange flights will 
be operated by our crews over the C&S seg- 
ments of the route and by TWA crews over 
the TWA segments. Service will be inaugu- 
rated on April 1st using TWA equipment 
initially. 
This interchange will provide the first one- 
plane service between the fast growing indus- 
trial cities of Houston and Pittsburgh, as well 
as the first competitive one-plane service be- 
tween Houston and New York. A substantial 
volume of new long-haul traffic should be car- 
ried on these through flights over our routes 
between Houston and St. Louis and between 
Houston and Indianapolis. 
New Convairs on Order 
The ten new 44-passenger Convair 340's 
which we ordered in 1951 are now scheduled 
for delivery beginning in September 1953. 
Delta also has ordered ten Convairs, three of 
which have already been received, so our 
merged Company will have a fleet of twenty 
of these fast, modern, twin-engine airplanes. 
Our Convair program, including spare en- 
gines, propellers, and parts and equipment 
for maintenance, together with training ex- 
penses, was initially estimated to cost about 
$8,000,000. By combining the C&S and Delta 
requirements for spares, it is estimated that 
the total outlay of our merged Company will 
be reduced by more than $1,000,000. An ad- 
vance payment of $300,000 has been made by 
C&S to the Consolidated Vultee Aircraft Cor- 
poration and a further advance of $500,000 
will be payable in March. 
Personnel 
One of the most gratifying features of 1952 
was the high level of morale among all of the 
personnel of our Company. The pleasant and 
cooperative spirit was reflected in increased 
productivity and, equally important, drew 
many complimentary expressions from pas- 
sengers. 
The voluntary contributory retirement in- 
come plan for our personnel was put into 
effect on July 1, 1952, and 660 employees out 
of 892 eligible have elected to participate. 
Our Company's share of the cost in 1952 was 
$91,441, while emplo,yees contributed $64,338 
through pay roll deductions. This retirement 
income plan proved highly popular with our 
personnel and rounded out our Company's 
employee benefits program which includes 
group insurance, liberal vacations, sick leave 
with pay, a suggestion system, free and re- 
duced rate transportation and paid holidays. 
Shareholders 
C&S is owned by 2,309 shareholders who 
live in 41 states, the District of Columbia, the 
Virgin Islands, and Brazil. At December I, 
1952, the average holding was 221 shares and 
80% of the shareholders owned 100 shares 
or less each. 
Safety Record 
During 1952 we entered our seventeenth 
year of perfect safety and at the end of the 
year we had flown more than 1.3 billion reve- 
nue passenger miles without fatality to any 
passenger or flight crew member. 
By authority of the Board of Directors, 
Chairman of the Board 
February 16, 1953 
6 
 CHICAGO AND SOUTHERN AIR LINES,, INC. 
FOR THE YEARS ENDED DECEMBER 31 
OPERA TING REVENUES: 
Passenger aryd excess baggage 
United States mail (Note 6) 
Express and freight . . . . 
Miscellaneous (net) . . . . 
Total operating revenues 
OPERATING EXPENSES: 
Flying and ground operations 
Maintenance . . . . . . 
Traffic, sales and advertising 
General and administrative . 
Depreciation (Note 2) . . 
Total operating expenses 
NET INCOME FROM OPERA TIO NS 
BEFORE INCOME TAXES . . . 
PROVISION FOR FEDERAL AND STATE 
INCOME TAXES (Notes 7 and 8) . 
OTHER INCOME OR DEDUCTIONS* (NET) 
NET INCOME FOR THE YEAR .. 
SPECIAL ITEMS: 
Profit on sale of DC-4 aircraft and related spares 
(less $114,000 applicable Federal income taxes) 
Reserve provision for foreign operations 
NET INCOME AND SPECIAL ITEMS . . . . . . . . . . 
(SINCE MAY 23, 1938) 
1952 
1952 
$15,305,552 
2,408,695 
989,003 
155,820 
$18,859,070 
$ 7,655,205 
2,478,736 
3,473,206 
1,135,406 
1,570,628 
$16,313,181 
$ 2,545,889 
1,210,000 
2,621 
$ 1,338,510 
$ 
$ 
$ 1,338,510 
$1,964,347 
1951 
$12,358,781 
3,056,243 
688,911 
132,995 
$16,236,930 
$ 6,857,481 
2,157,924 
3,076,097 
912,317 
1,368,039 
$14,371,858 
$ 1,865,072 
962,000 
40,096* 
$ 862,976 
$ 341,411 
73,428 
$ 267,983 
$ 1,130,959 
1951 
$1,164,450 
BALANCE AT BEGINNING OF YEAR 
Net income for the year . . . 1,338,510 $862,976 
Special items . . . . . . . 
Cash dividends of 75 a share in 
I 952 and 65 a share in 1951 . . . . . . . 
Reduction in international mail 
pay for prior years (less 
$331,153 applicable Federal 
income taxes) . . . . . . 
Less reserve for foreign opera- 
tions provided therefor (Note 8) 
BALANCE AT END OF YEAR . 
267,983 
$3,302,857 
381,995 
$373,428 
373,428 
$2,920,862 
The accompanying notes are an integral part of these statements. 
7 
1,130,959 
$2,295,409 
331,062 
$1,964,347 
 BALANCE SHEETS AT DECEMBER 31, 1952 AND 1951 
CHICAliD AND SOUTHERN AIR LINES, tNc. 
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 
Prepaid insurance, etc. 
Total current assets 
OTHER ASSETS: 
1952 
. $ 1,605,238 
2,000,000 
198,939 
1,726,481 
278,038 
96,475 
$ 5,905,171 
Advance payments on new aircraft (Note 3) $ 300,000 
207,046 
Miscellaneous . . . . . . . . . . 
$ 507,046 
OPERATING PROPERTY AND EQUIPMENT: 
Flight Other 
Equipment Property and 
(Note 2) Equipment 
Cost- 
1952 . $8,808,975 $1,637,071 $10,446,046 
1951 . 8,687,657 1,445,648 
Depreciation reserves- 
1952 . $4,193,087 $1,004,842 5,197,929 
19~ 
51 . 2,786,283 890,213 
$ 5,248,117 
FRANCHISES AND GOODWILL . . . $ 
$11,660,335 
1951 
$ 1,204,815 
1,000,000 
527,683 
1,353,116 
260,926 
99,963 
$ 4,446,503 
$ 
$ 
240,000 
272,264 
512,264 
$10,133,305 
3,676,496 
$ 6,456,809 
$ 
$1.1,415,577 
CH/CAii 
CURRENT LIABILITIES: 
Notes payable to banks 
Accounts payable and accrued liabilities 
Federal and state income taxes (Note 7) . 
Unearned revenue . . . 
Air travel plan deposits 
$ 
1952 
2,010,543 
1,354,388 
254,372 
226,525 
Total current liabilities . $ 3,845,828 
NOTES PAYABLE TO BANKS, due after 
one year . .. $ 
CAPITAL STOCK AND SURPLUS: 
Common stock-authorized 650,000 shares, 
without nominal or par value; issued and 
outstanding 509,326 shares (Note 4) $ 4,893,645 
Earned surplus since May 23, 1938 . . . 2,920,862 
$ 7,814,507 
COMMITMENTS (Note 3) 
$11,660,335 
' The accompanying notes are an integral part of these statements. 
8 9 
1951 
$ 1,000,000 
1,950,133 
716,885 
179,767 
210,800 
$ 4,057,585 
$ 500,000 
$ 4,893,645 
1,964,347 
$ 6,857,992 
$11,415,577 
 I. The Company has entered into a merger agreement 
with Delta Air Lines, Inc., which was approved by 
the Civil Aeronautics Board on December 31, 1952, 
and will be submitted to the stockholders of the 
two Companies for approval at special meetings to 
be called in April. The C&S stockholders will 
receive $10,695,846 of 5~12%, 20-year, convertible 
subordinated debentures to be issued by Delta, sub- 
ject to the provisions of the statutory Joint Agree- 
ment of Merger, each $35 of such debentures to 
be convertible at the holder's option into one 
share of Delta common stock. 
2. At December 31, 1952, the Company's fleet con- 
sisted of six Model 649 Constellations and twelve 
DC-3's. The DC-3's ($1,441,843 including spares) 
were fully depreciated to a residual value of $3,000 
each at December 31, 1948, and the Constellations 
($7,367,132 including spares) are being depreciated 
to a residual value of $50,000 each from the dates 
placed in service (3 in 1950 and 3 in I 951) to 
December 31, 1955. 
3. The Company has entered into a contract with 
Consolidated Vultee Aircraft Corporation for the 
purchase of ten new Convair 340 aircraft to be 
delivered beginning in September 1953. These air- 
craft, together with the necessary spare engines, 
propellers, parts and equipment for maintenance 
and operation, will cost approximately $7,000,000, 
against which advance payments of $300,000 have 
been made. 
4. Stock purchase warrants were outstanding to two 
officers at December 31, 1952, entitling one to 
;:icquire 8,000 shares of common stock and the 
other 3,750 shares at a price of $10 per share prior 
to 1956. The market quotations of the common 
stock at the date of fixing the price of the warrants 
were less than $10. 
5. In 1951 the Company adopted a contributory re- 
tirement income plan for its employees, which was 
put into effect on July 1, 1952. The Company's 
liability for past service benefits under the plan 
is estimated at $700,000 and it is anticipated that 
this will be paid over a period of 12 years. The 
Company's share of the cost of the plan for the 
last half of 1952, including past service benefits, 
was $91,441. 
6. Mail revenues from the United States Government 
are stated in accordance with final rates fixed by 
the Civil Aeronautics Board in rate orders issued 
as follows: 
Date of Effective Effective 
Order From To Routes 
July 28, 1948 Jan .. 1, 1946 Sept. 30, 1951 Domestic 
Oct. 18, 1951 Nov. 1, 1946 July 31, 1952 International 
Dec. 19, 1951 Oct. 1, 1951 Still in effect Domestic 
Oct. 22, 1952 Aug. 1, 1952 Still in effect International 
10 
On l\Iarch 18, 1952, the Post Office Department 
filed a petition requesting the United States Court 
of Appeals for the District of Columbia Circuit to 
review the Company's final international mail rate 
order issued by the CAB on October 18, 1951. The 
Post Office Department contends that the CAB 
erred in refusing to offset the profits above 7.4% 
earned under the Company's final domestic mail 
rates during the years 1948-1950 against the mail 
pay need of the Company's international opera- 
tions, and accordingly that the Company's mail 
pay for that period should be reduced by $654,000. 
The Company is participating in this appeal as a 
special intervenor. General Counsel for the Com- 
pany believes that the Court should uphold the 
CAB's decision, both as a matter of law and equity. 
7. The Company's federal income tax returns through 
1949 have been examined by the Bureau of In- 
ternal Revenue and settled. The tax returns for 
1950 and 1951 are now in process of examination 
and it appears that the depreciation rates used by 
the Company on DC-4 and Constellation aircraft 
may be questioned. 
It is believed that the Company has made reason- 
able provision in its accounts for any additional 
taxes related to DC-4 depreciation. With respect 
to Constellation aircraft and related spares, the 
Company has been depreciating this equipment to 
a common end date of December 31, 1955, giving 
an approximate a_ 
verage life of five years. The 
internal revenue agent examining the returns may 
recommend a six or seven-year life. The Company 
considers its depreciation policy proper and pro- 
poses to contest any change. Further, the Company 
has applied for a necessity certificate which, if 
granted, will authorize five-year amortization of 
approximately 80% of the cost of the Constellation 
fleet. Any depreciation on Constellation aircraft 
disallowed for prior years should be allowable in 
future years. 
The Company has no excess profits tax liability. 
8. The October 18, 1951 final rate order of the CAB 
fixed the Company's international mail pay for 
both past and future periods. The excess ($704,581) 
of international mail pay received under temporary 
rates from the beginning of foreign operations on 
November 1, 1946 to December 31, 1950 over the 
final mail pay for this four-year period as fixed in 
the October 18, 1951 order was refunded in 1951 
and charged to earned surplus. This refund was 
not deducted in determining the $962,000 provi- 
sion for income taxes in 1951. The income taxes 
payable for 1951 after deducting this refund were 
estimated at $630,847; the reduction of$331,153 in 
tr1xes occasioned by the refund was credited to 
earned surplus. The net surplus charge ($704,581 
less $331 .153) for the mail pay refund was offset 
by a credit from the foreign operating reserve pro- 
vided for that purpose. ' 
    
ARTHUR ANDERSEN & Co. 
ACCOUNTANTS AND AUDITORS 
To The Stockholders of 
Chicago and Southern Air Lines, Inc.: 
RAILWAY EXCHANGE BUH.DING 
ST. Lours 1 
We have examined the balance sheet of CHICAGO AND 
SOUTHERN AIR LINES, INC. (a Delaware corporation) as of 
December 31, 1952 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 auditing procedures 
as we considered necessary in the circumstances. We 
had previously made a similar examination for the year 
ended December 31, 1951. 
In our opinion, the accompanying balance sheets 
and statements of income and surplus present fairly the 
financial position of Chicago and Southern Air Lines, 
Inc. as of December 31, 1952 and 1951 and the results of 
its operations for the years ended those dates, and 
were prepared in conformity with generally accepted 
accounting principles applied on a basis consistent 
with that of the preceding year. 
St. Louis, Missouri 
January 30, 1953 
Introduction to the Statistic.al Summaries ... 
Audited financial statements presenting our operating results_ and year-end 
financial position for the last two years have been reproduced on the preced- 
ing pages. The data on the following pages have been prepared by the 
company for convenient reference in tracing our growth and progress. A 
ten-year summary, comparing significant financial items, is presented on the 
following two pages. A comprehensive seventeen-year summary of operating 
statistics on pages 14 and 15 covers the entire operating history of Chicago 
and Southern Air Lines, Inc. 
11 
 _____ __.L- 
fl,Lj:1 
CHICAGO AND SOUTHERN AIR LINES, tNc. 
FOR THE YEARS ENDED DECEMBER 31: 1952 1951 1950 1949 1948 1947 1946 1945 1944 1943 
OPERATING RESULTS (in thousands of dollars) 
Operating Revenues $18,859 $16,237 $12,885 $12,369 $10,453 $8,565 $8,750 $4,849 $2,947 $2,268 
Operating Expenses . 16,313 14,372 11,891 11,204 9,564 8,809 9,445 4,556 2,775 2,243 
Net Income from Operations before Income Taxes $ 2,546 $ 1,865 $ 994 $ 1,165 $ 889 $ 244* $ 695* $ 293 $ 172 $ 25 
Other Income-Net . 3 40* 6 72* 40* 32* 18* 5 51 143 
Provision for Income Taxes 1,210 962 465 463 210 237* 125 94 68 
Net Income for the Year $ 1,339 $ 863 $ 535 $ 630 $ 639 $ 276* $ 476* $ 173 $ 129 $ 100 
Special I terns 268 321 
Net Income and Special Items $ 1,339 $ l, 131 $ 856 $ 630 $ 639 $ 276* $ 476* $ 173 $ 129 $ 100 
Dividends Paid on Common Stock $ 382 $ 331 $ 255 $ " 178 None None None $ 77 $ 73 $ 143 
Net Income per Share of Common Stock $2.63 $2.22 $1.68 $1.24 $1.26 $0.54* $0.93* $0.56 $0.44 $0.34 
Dividends Paid per Share of Common Stock 0.75 0.65 0.50 0.35 None None None 0.25 0.25 0.625 
YEAR-END FINANCIAL POSITION (in thousands of dollars) 
ASSETS: 
Cash and Government Securities $ 3,605 $ 2,205 $ 1,998 $ 3,3_45 $ 2,320 $1,463 $1,880 $1,191 $ 899 $ 957 
Other Current Assets . - 2,300 2,242 1,685 1,190 1,770 1,013 2,053 475 707 1,331 
Flight Equipment and Other Operating Prop- 
erty-Net 5,248 6,457 4,162 1,184 1,884 2,642 3,163 1,450 527 394 
Other Assets 507 512 1,010 1,535 433 276 401 213 55 284 
Total Assets $11,660 $11,416 $ 8,855 $ 7,254 $ 6,407 $5,394 $7,497 $3,329 $2,188 $2,966 
LIABILITIES: 
Notes Payable . None $ 1,500 None None None $r,o6o $1,660 $ 400 None $ 225 
Other Liabilities . $ 3,845 3,058 $ 2,797 $ 1,797 $ 1,402 1,022 1,725 1,034 $ 593 1,190 
q 
Total Liabilities . $ 3,845 $ 4,558 $ 2,797 $ 1,797 $ 1,402 $2,082 $3,385 $1,434 $ 593 $1,415 
SHAREHOLDERS' EQUITY: 
1 
Common Stock $ 4,894 $ 4,894 $ 4,894 $ 4,894 $ 4,894 $4,894 $4,831 $1,599 $1,452 $1,450 
Surplus . 2,921 1,964 1,164 563 111 1,582* 719* 296 143 101 
Total Shareholders' Equity $ 7,815 $ 6,858 $ 6,058 $ 5,457 $ 5,005 $3,312 $4,ll2 $1,895 $1,595 $1,551 
Shares of Common Stock Outstanding 509,326 509,326 509,326 509,326 509,326 509,326 509,326 310,011 291,687 291,337 
Book Value per Share . . . . . . $15.34 $13.46 $11.89 $10.71 $9.83 $6.50 $8.07 $6.11 $5.47 $5.32 
* Denotes red figure 
12 13 
 ~r 
~7 Wewt fJJuninut1ty of &ftmalinfl fJJtalt~licd ____ -;---~;;;J/1/ CHICAGO AND SOUTHERN AIR LINES,,1Nc. 
* DOMESTIC OPERATING RESULTS 
Total Amounts 1952 1951 1950 1949 1948 1947 
Operating Revenues 
Passenger and excess baggage $12,499,226 $10,068,280 $6,869,179 56,407,449 $6,148,222 $5,774,239 
United States mail 972,813 1,202,976 1,747,319 1,800,384 1,891,989 1,465, l 02 
Express and freight 681,454 487,533 468,337 319,722 321,940 340,486 
Miscellaneous 91,073 68,002 61,496' 56,175 70,090 71,664 
Total Operating Revenues $14,244,566 $11,826,791 $9, 146,33 I $8,583,730 $8,432,241 $7,651,491 
Total Operating Expenses 12,805,475 10,909,913 8,442,261 7,783,557 7,797,320 7,853,822 
Operating Profit before Income Taxes S 1.439,091 $ 916,878 $ 704,070 S 800,173 s 634,921 s 202,331 * 
Unit Operating Costs 
Cents per available ton mile 32.23 33.05 34.20 33.16 32.69 31.79 
Cents per revenue ton mile 57.29 59.24 62.25 64.89 66.15 63.04 
Cents per available seat mile 3.94 4.06 4.02 3.86 4.16 4.09 
Cents per revenue passenger mile 6.37 6.49 7.15 7.24 7.37 6.98 
* INTERNATIONAL OPERATING RESULTS 
Total Amounts 1952 1951 1950 1949 1948 1947 
Operating Revenues 
Passenger and excess baggage . $ 2,806,326 $ 2,290,501 $1,983,334 $2,153,413 $1,048,967 $ 455,236 
United States mail 1,435,882 1,853,267 1,514,928 1,504,706 909,610 443,812 
Express and freight 307,549 201 ,378 193,837 109,434 56,444 14,466 
Miscellaneous 64,747 64,993 46,614 17,241 5,590 161 
Total Operating Revenues $ 4,614,504 $ 4,410,139 $3,738,713 $3,784,794 $2,020,611 $ 913,675 
Total Operating Expenses 3,507,706 3,461 ,945 3,448,722 3,419,907 1,766,194 955,092 
Operating Profit before Income Taxes$ 1,106,798 $ 948,194 $ 289,991 $ 364,887 $ 254,417 $ 41,417* 
Unit Operating Costs 
Cents per available ton mile 32.92 32.09 37.95 33.26 47.67 41.35 
Cents per revenue ton mile 67.84 85.82 98.28 107.58 116.33 126.33 
Cents per available seat m1le 4.56 4.47 4.58 4.09 4.55 4.84 
Cents per revenue passenger mile 9.17 10.88 12.73 12.51 13.38 14.26 
* Denotes red figure 
14 
1946 
$6,699,813 
1,672,872 
218,038 
24,138 
$8,614,861 
9,221,022 
$ 606,161* 
37.69 
62.07 
4.70 
6.69 
1946 
$ 61,234 
69,580 
4,629 
8 
$ 135,451 '1 
224,624 
$ 89,173* 
119.48 
229.21 
9.74 
25.10 
1945 
.$4,376,776 
277,238 
169,396 
25,413 
$4,848,823 
$ 
4,555,646 
293, I 77 
35.97 
49.57 
4.15 
5.24 
YEAR 
19S2 
19S1 
19S0 
1949 
1948 
1947 
1946 
1945 
1944 
1943 
1942 
1941 
1940 
1939 
1938 
1937 
1936 
1944 
$2,545,016 
281,808 
107,245 
12,644 
$2,946,713 
2,774,292 
s 172,421 
40.10 
50.74 
4.65 
5.63 
REVENUE 
PLANE 
MILES 
(Thousands) 
DOM. 
9,624 
8,508 
7,436 
7,497 
7,096 
7,ll8 
8,108 
5,279 
2,882 
2,179 
2,210 
2,328 
1,983 
1,769 
1,442 
1,344 
I, 135 
INT. 
1,656 
1,682 
1,884 
1,817 
806 
473 
74 
1943 1942 1941 1940 1939 
$1,864,998 $1,421 ,835 $1,080,173 $ 733,025 $427,670 
301,823 606,004 611,670 429,445 410,619 
96,666 62,309 34,318  24,905 19,557 
4,842 9,688 5,440 3,192 5,311 
$2,268,329 $2,099,836 $1,731,601 $1,190,567 $863,157 
2,243,673 1,651,408 1,734,217 1,234,221 776,346 
$ 24,656 S 448,428 s 2,616 * $ 43,654* $ 86,811 
42.89 31.14 31.05 30.73 39.89 
55.10 53.27 70.73 72.73 76.87 
5.33 3.61 3.70 3.84 4.87 
6.36 5.81 7.41 7.72 8.40 
* OPERATING STATISTICS 
AVAILABLE 
TON 
MILES 
(Thousands) 
DOM. 
39,737 
33,008 
24,685 
23,475 
23,853 
24,705 
24,465 
]2,666 
6,918 
5,231 
5,304 
5,586 
4,016 
1,946 
1,586 
1,479 
1,177 
INT. 
10,656 
10,788 
9,089 
10,280 
3,705 
2,310 
188 
REVENUE 
TON 
MILES 
(Thousands) 
DOM. 
22,353 
18,417 
13,562 
11 ,995 
11 ,788 
12,458 
]4,856 
9,191 
5,468 
4,072 
3,100 
2,452 
1,697 
1,010 
750 
569 
404 
INT. 
5,171 
4,034 
3,509 
3,179 
1,518 
756 
98 
AVAILABLE 
SEAT 
MILES 
(Thousands) 
DOM. INT. 
325,088 76,897 
269,002 77,414 
209,814 75,2]2 
201 ,599 83,559 
187,381 38,854 
]92,132 19,747 
196,290 2,306 
109,596 
59,654 
42,057 
45,720 
46,813 
32,152 
15,932 
14,357 
13,405 
9,742 
NoTE: International service was inaugurated on November 1, 1946 
15 
1938 1937 1936 
$317,481 $227,362 $162,912 
407,837 361,938 335,724 
13,813 13,904 7,421 
6,868 3,243 1,881 
$745,999 $606,447 $507,938 
660,070 620,287 513,695 
$ 85,929 $ 13,840* $ 5,757* 
41.62 
88.01 
4.60 
9.57 
REVENUE 
PASSENGER 
MILES 
(Thousands) 
DOM. 
201,085 
168,150 
118,131 
107,440 
105,744 
l 12,5G4 
137,844 
86,877 
49,242 
35,293 
28,438 
23,414 
15,979 
9,242 
6,895 
5,154 
3,720 
INT. 
38,239 
31,806 
27,090 
27,327 
13,196 
6,700 
895 
41.94 43.64 
109.01 127.15 
4.62 5.27 
12.04 13.81 
PASSENGER 
LOAD 
FACTOR 
(Percent) 
DOM. INT. 
61.9% 49.7% 
62.5 41.1 
56.3 36.0 
53.3 32.7 
56.4 34.0 
58.6 33.9 
70.2 38.8 
79.3 
82.6 
83.9 
62.2 
50.0 
49.7 
58.0 
48.0 
38.4 
38.2 
 ICAGD AND SOUTHERN AIR LINES,, 1Nc. 
GENERAL OFFICES Memphis Municipal Airport, Memphis 14, Tennessee 
ORPORATE OFFICE 100 West Tenth Street, Wilmington, Delaware 
CARLETON PUTNAM SIDNEY A. STEWART 
L. RAYMOND BILLETT JUNIUS H. Coo PER JOHN R. LONGMIRE 
CARLETON PUTNAM . 
SIDNEY A. STEWART . 
JUNIUS H. COOPER . 
WILLIAM T. ARTHUR 
. Chairman of the Board 
. President 
Vice President-Finance 
Vice President-Operations 
R. s. MAURER . 
T. M. MILLER . 
w. T. BEEBE. 
Vice President-Secretary and General Counsel 
Vice President-Traffic and Sales 
. Vice President-Personnel 
T. F. HAMBLETON . 
R. s. SCRIVENER . 
E. MURRAY. 
. . Treasurer 
. Assistant Treasurer 
. Assistant Secretary 
TRANSFER AGENT 
CHEMICAL BANK & TRUST COMPANY 
New York 15) New York 
REGISTRAR 
THE CHASE NATIONAL BANK 
OF THE CITY OF NEW y ORK 
New York 15) New York 
LISTED 
NEW y ORK STOCK EXCHANGE 
AND 
MIDWEST STOCK EXCHANGE 
 OF THE 
CARIBBEAN 
With the new weekly Constellation service, 
inaugurated on January 10, 1953, from New 
Orleans direct to Port au Prince, Haiti, Ciudad 
Trujillo, Dominican Republic, and San Juan, 
Puerto Rico, added to the existing daily Con- 
stellation service from New Orleans to Cuba, 
Jamaica and Venezuela, C&S now reaches all 
of the principal islands of the Greater Antilles, 
as well as the north coast of South America. 
The entire Caribbean area holds great promise 
for both business and pleasure travel from the 
United States. 
Pool and terrace of Jaragua Hotel, 
Ciudad Truiillo, Dominican Republic. 
Famed Nacional Hotel 
Havana, Cuba. 
Entrance, Varadero 
International Hotel, 
Varadero Beach, Cuba. 
View from terrace of Tower Isle 
Hotel on Jamaica's North Shore. 
Episcopal Cathedral at 
Port au Prince, Haiti. 
Caribe Hilton Hotel at 
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sot' CHICAliD AND SOUTHERN AIR LINES, INC. 
SYSTEM MAP 
Showing Proposed Consolidation With 
DELTA AIR LINES 
- C&SROUTES 
- - DELTA ROUTES 
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