Northeast Airlines Annual Report 1942 [Calendar Year]

Annual~
YEAR ENDED DEC. 31, 1942
NORTHEAST AIRLINES
HARRY A. CARSON, St. Albans, Vt.
PAUL F. COLLINS, Winchester, Mass.
GEORGE F. GLACY, Boston, Mass.
DAVID H. HOWIE, Boston, Mass.
s. J. SOLOMON, Silver Spring) Md.
ROBERT s. SWAIN, Boston, Mass.
EUGENE L. VIDAL, Washington, D. C.
LAURENCE F. WHITTEMORE, Pembroke, N. H.
President, s. J. SOLOMON
Vice President, LAURENCE F. WHITTEMORE
Vice President, DAVID H. HOWIE
Vice President and Treasurer, ROBERT s. SWAIN
Vice President, MILTON H. ANDERSON
Clerk of Corporation, ROBERT F. BRADFORD
General O /fices
Transfer Agent
*
COMMONWEALTH AIRPORT, BOSTON, MASS.
OLD COLONY TRUST COMPANY, BOSTON, MASS.
To the Stockholders BOSTON, MASS., JULY 1, 1943
of Northea~t Airlines, Inc.:
By action of the Directors, the fiscal year of our Company has been changed
to close on December 31 .and there is submitted herewith the balance sheet of
our company as at December 31, 1942 together with a statement of profit and
loss for the twelve months ended December 31, 1942. These are as audited by
Messrs. Lybrand, Ross Bros. & Montgomery and their certificate also is
included.
Operations for the year ended December 31, 1942 resulted in a net profit
of $77,097.30 after provision for Federal Income Taxes. In addition, there
was a non-recurring profit of $105,899.02 arising from the sale of certain
aircraft, engines, equipment, and parts. All extension and development costs
were written off during the year. In addition, there was written off the un-
amortized balance at December 31, 1941 in the Property and Equipment
Acquisition Adjustment Account and a Contingency Reserve of $20,000 was .
established. At December 31, 1942 Surplus totalled $43,393.12 as compared
with $18,646.66 on June 30, 1942.
In January 1943 the Company filed a petition with the Civil Aeronautics
Board requesting a prompt hearing on all New York-Boston applications. As
a result of that petition the Civil Aeronautics Board has set such a headng for
September 7, 1943.
Our company has taken recognition of the tremendous post war future of
the air transport industry and has made its plans to participate by applying
to the Civil Aeronautics Board on_ March 16, 1943 for authorization to operate
over various routings between Boston, Mass.; London, England; Glasgow,
Scotland; Paris, France; Reykjavik, Iceland; Oslo, Norway; Stockholm,
Sweden; Copenhagen, Denmark; Prague, Czechoslovakia; Leningrad, Russia;
and terminating at Moscow, Russia.
On April 8, 1943 it made further application to the Civil Aeronautics
Board for a Certificate of Convenience and Necessity to provide express and
mail service by helicopter to more than 400 cities and towns in New England
and southern New York and indicated that the application would be amended
to include passenger service when development of the helicopter makes such
service practical.
The largest part of your company's activities is devoted to the war effort
artd will, of course, continue to be for the duration of the war. The Company
is operating both in foreign and domestic service for the Air Transport
Command.
s. J. SOLOMON
NORTHEAST AIRLINES, INC.
Current assets:
Cash in banks (note A) .
Receivables, billed or accrued:
Airlines and agents .
United States Post Office Department (note A)
United States Army Air Force- under operational
contracts (notes A and B), less $15,000.00 re-
serve for adjustments .
Pilots' training school tuition under government
contracts (note A)
Other receivables, less reserves
Total receivables
Inventories ( at average cost or less) :
Aviation fuels and oil and returnable containers .
Replacement parts and supplies .
Training school flight kits
Total inventories
Total current assets
Property and equipment:
Improvements to real estate not owned
Flight equipment- passenger, mail and express
service
Ground and shop equipment
Training school flight and ground equipment .
Less reserves for depreciation and amortization .
Property and equipment less reserves
Deposit in escrow under lease agreements
Prepaid expenses and deferred charges:
Prepaid insurance .
Prepaid rentals
Shop orders in process .
Other deferred charges and prepayments.
Total prepaid expenses and deferred charges .
$ 37,290.78
78,550.32
759,052.08
290,498.92
63,268.81
4,278.04
69,358.18
6,646.51
33,287.76
243,855.60
78,110.14
130,121.06
485,374.56
91,193.66
19,584.16
13,031.34
3,249.86
3,396.90
NORTHEAST AIRLINU, INC.
BALANCE SHEET DECEMBER 31, 1942
$ 272,473.80
1,228,660.91
80,282.73
1,581,417.44
1
394,180.90
1
j
50,000.00
39,262.26
$2,064,860.60
Current liabilities:
Notes payable 'to bank under loan agreement (note A)
Accounts payable:
Vendors
Airlines
Total accounts payable .
Accrued taxes:
Federal normal tax and surtax
Other federal and state taxes
Other current liabilities .
Total current liabilities
Deferred income and liability , .
Reserve for contingencies .
CAPITAL
Common stock, par value $1.00 per share, authorized
$324,148.29
29,446.88
31,250.00
15,834.47
500,000 shares, issued and outstanding 300,000 shares 300,000.00
Premium on common stock ( excess over par value of
proceeds of stock issued in 1941, less expenses of issue) 447,357.76
Surplus earned since July 1, 1940 43,393.12
NOTES:
$850,000.00
353,595.17
47,084.47
1,311.69
1,251,991.33
2,118.39
20,000.00
790,750.88
$2,064,860.60
A - Receivables under all government contracts at December 31, 1942 (except that with the United States Post Office
Department) have been assigned as security for notes payable to bank under loan agreement. Cash in the amount of
$2,078.95, and $61,189.29 of the total receivable from Post Office Department were pledged at December 31, 1942 as security
for the loan. The loan agreement provides, among other things, that the company shall not declare or pay dividends on its
capital stock without consent of the bank and shall not permit its net working capital to be at any time less than
$100,000.
B - The amount receivable and operating revenue under operational contract with the United States Army Air Force are
subject to possible adjustments which may result from governmental audit of costs chargeable under the contract or
from renegotiation of the contract price under the War Profits Control Act approved April 28, 1942, as amended by the
Revenue Act of 1942.
C - At July l, 1941 the company began to amortize the then $66,293.73 balance in property and equipment acquisition
adjustment account by ratable charges to income over a period of ten years. As indicated in the accompanying statement
of profit and loss and earned surplus, the unamortized balance of this account at December 31, 1941 has been charged
to surplus and no deduction for amortization thereof has been made in determining net income for the year ended
December 31, 1942.
NORTHEAST AIRLINES, INC.
!Ttalenuil o/ ~wfit and~ and &altned !Tu11filu4
FOR YEAR ENDED DECEMBER 31, 1942
Operating revenue:
Passengers . . . . . . . . .
Air mail . . . . . . . . .
Training school tuition .
Operations under Army Air Force contracts (balance
sheet note B) . . . .
Other . . . . . . . . .
Total operating revenue .
Operating expenses:
Conducting transportation and flying operations . .
Maintenance and repairs . . . . . . . .
Provisions for depreciation and amortization
Traffic and advertising
General and administrative . .
Taxes other than income taxes .
Total operating expenses .
Net operating income
Deductions from income:
Extension and development costs charged off .
Interest expense . . .
Other deductions . . . . . . .
Profit before federal income taxes
Provision for federal income taxes .
Net profit for year . . . .
Add net gains from sales of flight and other equipment .
Deduct:
Provision for contingencies . . . . . . . . .
Unamortized balance at December 31, 1941 in prop-
erty and equipment acquisition adjustment account
charged to surplus (balance sheet note C)
Deficit in earned surplus at beginning of year . . .
$309,875.46
356,589.89
477,257.48
931,112.74
47,430.28
1,297,256.87
322,618.16
88,312.93
60,810.78
177,210.65
40,632.75
17,568.95
7,636.19
1,871.27
20,000.00
62,979.03
56,624.17
$2,122,265.85
1,986,842.14
135,423.71
27,076.41
108,347.30
31,250.00
77,097.30
105,899.02
182,996.32
139,603.20
Earned surplus at end of year ( refer to balance sheet notes) . $ 43,393.12
Since the days of the China Trade
Yankees deliver the goods!
The picturesque schooner has been replaced by
the sleek, speedy transport plane, but otherwise
the story is the same: through storms and fogs,
along charted or uncharted routes, Yankees
deliver the goods!
If anything, . today's tale is more stirring.
Northeast Airlines, in the service of the Air
Transport Command, was one of the first to
fly any ocean in cargo service. Its men com-
pressed months of adventure into hours and
NORTHEAST
minutes. They flew over lonely stretches of
ocean, they braved sleet and fog, they pio
neered invisible roadways of the air to deliver
the goods for Uncle Sam.
While one branch of Northeast Airlines
operations serves Uncle Sam, our regular
commercial service carries civilians and milit-
ary men along established routes from Boston
to the North. Yes, today as always the Yankees
are delivering the goods!
AIRLINES