Northeast Airlines, Inc.
Annual Report 1971
Northeast Airlines, Inc.
Annual Report 1971
Contents
Report to Stockholders
Financial Statements
Balance Sheet
Statement of Operations ................... .
Statement of Accumulated Deficit ..................... .
Statement of Changes in Financial Position
Notes to Financial Statements ..................... .
Auditors' Opinion
Route Map
Officers and Directors
2
4
6
6
7
8
19
20
22
1
To Northeast Stockholders:
At the time the last Annual Report was written and
distributed, the merger which had been pending
between Northeast and Northwest had just been
terminated by Northwest. We reported that nego-
tiations would begin immediately with other air-
lines to replace Northwest as a merger partner, as
it seemed the only prudent course for Northeast
to take.
At this writing, on March 16 of 1972, we are await-
ing an imminent decision from the Civil Aeronau-
tics Board on an application for merger with Delta
Air Lines, formal contract on which was filed with
the CAB last May 12. Since that time all factors in
the case seem to have progressed favorably, with
recommendations having been received from the
Hearing E'<aminer, the Department of Transporta-
tion, the Bureau of Operating Rights and numerous
civic entities.
Operationally, the year 1971 proceeded about as
anticipated, and continued to bear out the represen-
tations previously made to both stockholders and
the CAB - that merger with a financially strong
carrier is the only solution for both stockholders
2
and employees. The loss of nearly $14,000,000
bears silent but strong witness to that fact, despite
aggressive and highly competitive marketing effort,
particularly in the last half of the year when sig-
nificant improvement over revenue figures for 1970
was accomplished.
Should the merger with Delta continue to a success-
ful conclusion, this will be the final "report to
stockholders" via your annual report. While we
know we must continue the all-out effort to con-
summate the merger, it is not without a considerable
personal sadness. Northeast has been a real pioneer
in the airline business, its people have contributed
much, and the task of writing "finis" is not a pleas-
ant one. Despite the problems, our personal asso-
ciations have been most gratifying, and we extend
our most sincere thanks to one and all.
Sincerely,
Bill Michaels
President
3
Northeast Airlines, Inc.
Balance Sheet
Assets
Current assets:
Cash
Accounts receivable less allowance
for doubtful accounts of $731 in
1971 and $1,084 in 1970
Aircraft parts and supplies at
average cost (less reserve for
obsolescence of $1,103 in 1971
and $652 in 1970) (note D)
Prepaid expenses
Total current assets
Restricted deposit with mortgage
trustee (note C)
Property and equipment at cost
(notes B, C and D):
Flight equipment and related
spare parts
Ground property and equipment
Less allowance for depreciation
and amortization (note D)
Non-operating property and equipment:
Flight equipment and related spare
parts held for sale or lease at
estimated realizable value (note B)
Leased flight equipment (note B)
Deferred charges and other assets (note D) :
4
Jet aircraft integration
Route development
Debt expenses
Other
December 31
1971 1970
(In Thousands)
$ 4,411
12,956
6,150
2,565
26,082
$ 3,798
10,871
5,643
2,361
22,673
1,638
30,593 28,053
9,406 9,409
39,999 37,462
12,604 10,008
27,395 27,454
2,300
4,020
871
665
780
6,336
$62,113
4,300
4,986
900
723
576
7,185
$63,250
Liabilities December 31
1971 1970
(In Thousands)
Current liabilities:
Current maturities of long-term
debt (note C) $ 2,861 $ 2,854
Accounts payable 8,951 8,928
Accrued salaries and wages 1,187 834
Accrued vacation 2,543 2,239
Contributions to employee pension
plans (note E) 2,163 138
Unearned transportation revenue 4,469 4,025
Collections as agent 5,417 4,479
Total current liabilities (note C) 27,591 23,497
Estimated future liability for employee
sick leave less discount of $1,887 in
1971 and $1,718 in 1970 2,175 2,012
Convertible subordinated debentures
and long-term debt, net of current
maturities (note C) 36,578 40,450
Subordinated notes payable to Storer
Broadcasting Company (note H) 28,000 26,000
Subordinated noninterest bearing
notes payable to Delta and Storer
(notes A, H and I) 10,400
Liability to Storer Broadcasting
Company on reassignment of
certain flight equipment contracts
(note H) 3,969 3,969
Commitments and contingencies
(notes B, C, E, G and H)
Stockholders' Equity
Common stock, par value $1.00 per share:
Authorized 10,000,000 shares (notes
C and F) issued 6,685,155 shares 6,685 6,685
Additional paid-in capital 9,136 9,136
Accumulated deficit since January 1,
1966 (note C) (62,421) (48,499)
Total stockholders' deficit (46,600) (32,678)
$62,113 $63,250
The accompanying notes are an integral part of the
financial statements.
5
Northeast Airlines, Inc.
Statement of Operations
December 31
Years Ended 1971 1970
(In Thousands)
Operating revenues:
Passenger $116,046 $113,027
Express, freight and baggage 4,373 4,191
Mail 1,379 1,579
Charter and other, net 4,199 4,039
Total operating revenues 125,997 122,836
Operating expenses:
Flight operations, including direct
maintenance 60,123 55,444
Other maintenance and repairs 8,849 8,275
Aircraft and traffic servicing 23,873 22,181
Promotion and sales 18,888 18,601
Depreciation and amortization
(note D) 4,076 3,996
Passenger service 12,864 12,816
General and administrative 6,162 6,225
Total operating expenses 134,835 127,538
Operating loss 8,838 4,702
Other expenses :
Interest expense (note H) 4,935 4,876
Other-net 149 443
Total other expenses 5,084 5,319
Loss before extraordinary item 13,922 10,021
Extraordinary item :
Write-down of FH-227 aircraft to
estimated net realizable value
(note B) 700
Net loss $ 13,922 $ 10,721
Loss per share of common stock:
Loss before extraordinary item $2.08 $1.5~
Extraordinary item .10
Net loss $2.08 $1.60
Statement of Accumulated Deficit
Balance at beginning of year
Net loss per statement of operations
Balance at end of year (since
January 1, 1966)
6
$ 48,499 $ 37,778
13,922 10,721
$ 62,421 $ 48,499
Northeast Airlines, Inc. Statement
of Changes in Financial Position
Years Ended
Source of funds:
Issuance of:
Notes payable to Delta and Storer
Notes payable to Storer
Withdrawal of restricted deposit
with mortgage trustee
Disposal of property and equipment
Use of funds:
Operations:
Net loss
Charges not requiring funds
currently:
Extraordinary item
Depreciation and amortization
(note D)
Other
Reduction of long-term debt:
Current maturities
Application of Mortgage Deposit
Property and equipment:
Aircraft and parts
including deposits
Ground property and equipment
Other, net
Increase (decrease) in
working capital
Analysis of changes in working
capital:
Increases (decreases) in current
assets:
Cash
Accounts receivable, net
Aircraft parts and supplies, net
Prepaid expenses
Decreases (increases) in current
liabilities:
Current maturities of
long-term debt
Accounts payable
Accrued salaries and wages
Accrued vacation
Contributions to employee
pension plans
Unearned transportation revenue
Collections as agent
Increase (decrease) in
working capital
December 31
1971 1970
(In Thousands)
$10,400
2,000 $11,000
1,665
24 625
14,089 11,625
13,922 10,721
(700)
(4,076) (3,996)
(92) (282)
- - -
9,754 5,743
2,861 2,854
1,010
285 348
361 330
503 495
14,774 9,770
($ 685) $ 1,855
$ 613 ($ 638)
2,085 (1,658)
507 686
204 (421)
3,409 (2,031)
(7) (7)
(24) 2,033
(353) 145
(304) 244
(2,025) 1,311
(443) 320
(938) (160)
(4,094) 3,886
($ 685) $ 1,855
The accompanying notes are an integral part of the
financial statements. 7
Northeast Airlines, Inc.
Notes to Financial Statements
A. Basis of presentation
The 1970 and 1971 financial statements have been
prepared on a going concern basis which contem-
plates the realization of assets and the liquidation
of liabilities in the ordinary course of business, the
continuation of which was (as to the 1970 financial
statements) and is (as to the 1971 financial state-
ments) dependent on the Company's ability either
to obtain continued financing and financial support
(see note C relative to defaults of long-term debt
agreements) or to consummate a merger (note H).
The Company's majority stockholder, Storer Broad-
casting Company (Storer), has entered into an
agreement with Delta Air Lines, Inc. (Delta), dated
May 12, 1971, whereby the parties have agreed to
provide for interim financing of the Company
(note I). Since the Company has continued to suffer
operating losses, its liabilities exceed assets by
$46,600,000, and the interim financing provisions
of the Storer-Delta Agreement are contingent upon
consummation of the merger (see note G for infor-
mation on litigation in connection with the proposed
merger), there is uncertainty as to the validity of
the going concern basis if the merger is not
consummated.
B. Equipment program and lease commitments
On December 31, 1971 the Company's operating
fleet consisted of the following:
Model of Aircraft Owned
Boeing 727-100 2
Boeing 727-200
Douglas DC-9-30 4
Fairchild Hiller FH-227 2
8
Leased
6
13
10
29
Total
8
13
14
2
37
Of the leased aircraft, all except seven Boeing
727-200's are being leased from Storer Leasing
Corporation (a wholly owned subsidiary of Storer),
from which the Company is also leasing certain
related spare parts.
8
Lease expense on all of the foregoing flight equip-
ment approximates $14,800,000 annually until the
leases expire at various dates from 1978 to 1982.
In 1969 the Civil Aeronautics Board (hereafter
termed CAB) approved a temporary realignment of
the Company's certificated air service in New
England whereby certain other carriers were given
conditional authority to serve certain routes which
had previously been served by the Company. This
approval provided that if the replacement carriers
ceased to provide adequate service, the Company
would be required to reinstate operations. At the
time of such realignment the Company's fleet of six
FH-227 aircraft became surplus and was made avail-
able for sale or lease. Since 1969 such aircraft,
related support equipment and inventory, have been
classified as non-operating flight equipment held
for sale or lease and written down an aggregate of
approximately $3,800,000 to their estimated realiz-
able value.
In November 1971 the Company received notice
from a replacement carrier that it would cease to
serve certain New England points, whereupon the
Company resumed service requiring the use of two
FH-227 aircraft. Such aircraft (together with one
currently operated by another carrier under a five-
year operating lease) have been reclassified from
non-operating to operating flight equipment and
are being depreciated over their estimated useful
0
life. The remaining three FH-227 aircraft are classi-
fied as and continue to be non-operating equipment
available for sale or lease.
Rentals under long-term leases in effect at December
31, 1971 for hangar, terminal and reservations
facilities approximate $3,000,000 annually until
1977 when the first major lease expires.
9
Notes to Financial Statements
(continued}
C. Convertible subordinated debentures and
long-term debt
Long-term debt at December 31, 1971 consisted of
the following:
Series A secured notes, 6 %
due quarterly through 1973
Series B secured notes, 7%
due semi-annually from 1974
through 1979
Subordinated notes to aircraft
manufacturers, 6 % and 6 %
due quarterly through 1979
Convertible subordinated
debentures, 6 % due 1986
Fuel Farm Construction
Contract, 7% due monthly
through 19 77
Other
Total debt
Less installments due in 1972
Long-term portion
(In Thousands)
$ 4,620
9,029
2,998
22,000
650
142
39,439
2,861
$36,578
Aggregate maturities, excluding sinking fund pay-
ments required on the 6 % convertible subor-
dinated debentures, due from December 31, 1971
over the years 1972 through 1976 are $2,861,435,
$2,829,918, $2,045,215, $2,015,449, and $2,015,760,
respectively.
In June of 1971 the Company made the election to
apply the insurance funds on deposit with the
Mortgage Trustee, net of related interest, to the
Series A and Series B secured notes, with proceeds
of $582,389 being applied against current install-
ments and $1,010,125 against the long-term
portion.
The 6 % convertible subordinated debentures
due August 1, 1986 are convertible into common
stock at $25 per share, subject to an adjustment in
certain events, and 880,000 shares of common
10
stock are reserved for such conversion. The Com-
pany is required to provide $1,100,000 annually
from 1976 to 1985 for sinking fund redemptions.
The debentures impose certain restrictions on cash
dividends and stock repurchases, but these are less
restrictive than those provided under other loan
agreements, which are noted below.
So long as certain indebtedness (with maturities
extending to 1979) is outstanding under loan agree-
ments between Storer and the Company, respec-
tively, and certain banks and institutional investors
in conjunction with financing and acquisitions of
jet flight equipment leased by Storer Leasing Cor-
poration (note B) to or purchased by the Company,
Storer and the Company have respectively war-
ranted that, without prior consent of the lenders,
the Company will not pay dividends in excess of
so% of net earnings subsequent to January 1, 1966
and will maintain a specified amount of net work-
ing capital, as defined in the loan agreements.
At December 31, 1971 the Company's net working
capital, as defined in the loan agreements, was
approximately $6,900,000 less than the stipulated
amount and the Company obtained waivers from
the lenders until March 31, 1972, or the consum-
mation or termination of the proposed merger,
whichever occurs earlier. In the event additional
waivers are not granted, the lenders have the
option to declare the total amount of the notes
due and payable.
Substantially all of the Company's owned flight
equipment and related spare parts are pledged as
collateral under the Series A and B notes and sub-
ordinated notes to aircraft manufacturers.
D. Depreciation, amortization and maintenance
The Company charges depreciation expense on a
straight-line basis in amounts sufficient to cover the
cost of property and equipment, less estimated
residual values, by the end of their estimated useful
11
Notes to Financial Statements
(continued)
lives. Costs of improvements to leased property
are amortized over the leased period or over the
useful life of the property, whichever is less. The
three reactivated Fairchild Hiller FH-227 turboprop
aircraft and certain parts are depreciated over five
years and owned Douglas DC-9 and Boeing 727
aircraft and spare parts are depreciated over fifteen
years. Ground properties and equipment are de-
preciated principally over five years. Depreciation
plus amortization of leasehold improvements
charged against income approximated $2,725,000
in 1971 and $2,740,000 in 1970.
Training and other aircraft integration costs in-
curred in conjunction with the Company's major
re-equipment program in 1966 and 1967 are being
amortized over ten years. Similar costs incurred in
1968 and 1969, for expansion of the aircraft fleet,
are being amortized over five years. Amortization
charged against income approximated $966,000 in
1971 and 1970.
Provision for obsolescence of aircraft parts and
supplies, which is made ratably over the lives of the
related aircraft, amounted to $348,000 in 1971 and
$290,000 in 1970. Such parts and supplies are re-
flected in current assets in accordance with the
Uniform System of Accounts prescribed by the
Civil Aeronautics Board, although some portion of
quantities on hand represent in excess of one year's
expected usage.
Costs incurred to acquire certification to fly new
routes are deferred in the accounts and capitalized
upon receipt of certification or expensed if the route
application is denied or abandoned. Commencing
October 1, 1971 the Company elected to amortize
such capitalized costs (approximately $800,000)
over a period of ten years.
Overhauls of owned and leased Boeing 727 and
Douglas DC-9 airframes and engines are charged
12
to expense when the overhauls are performed. Ex-
penditures extending materially the life of property
and those for additional equipment are capitalized.
E. Retirement plans
The Company has various contributory and non-
contributory trusteed retirement plans for substan-
tially all employees. The total pension expense was
approximately $3,399,000 in 1971 and $3,154,000
in 1970, which includes, as to the non-contributory
plans, normal cost and interest on past service cost
which the Company funds currently.
F. Employee stock option plan
At December 31, 1971, 256,250 shares of authorized
and unissued common stock were reserved under
the Company's 1964 Qualified Stock Option Plan.
Options were outstanding and exercisable to pur-
chase, at prices not less than fair market value on
dates granted, 38,750 shares at prices ranging from
$11.625 to $26.125 per share (total price of
$730,656).
During 1971 no options to purchase shares were
granted; options for 11,250 shares were terminated;
and no options were exercised.
G. Contingencies
All unused tax loss carryforwards expired in 1971.
In January, 1972, an action against the Company
was commenced in the United States District Court
for the District of Massachusetts by unions repre-
senting certain of the Company's employees,
alleging that the Company has, in violation of a
collective bargaining agreement, failed to meet and
negotiate with respect to provisions for the pro-
tection of employees' seniority and other rights in
connection with the merger of the Company with
Delta. The plaintiffs seek, among other things, to
enjoin the consummation of such merger until the
Company has negotiated such rights. The court
13
Notes to Financial Statements
(continued)
denied the plaintiffs' request for a preliminary in-
junction. The plaintiffs have filed a notice of appeal.
In October, 1971 an action was commenced in the
United States District Court for the Southern Dis-
trict of New York by certain stockholders of Delta
against Delta, Storer, the Company and certain
individuals. According to the complaint, the plain-
tiffs bring the action as a class action, the class
consisting of all shareholders of Delta, and chal-
lenged the fairness of the proposed Northeast-Delta
merger to shareholders of Delta as well as the
adequacy of the proxy statement distributed by
Delta to its shareholders in connection with the 1
proposed merger. The plaintiffs seek, among other
things, an injunction against the proposed merger
of Delta and the Company. The court has denied
the plaintiffs' motion for summary judgment. The
plaintiffs have filed a notice of appeal.
There are pending against the Company various
claims by certain defendants who were enjoined in
December 1964, in proceedings instituted by the
Company against alleged illegal charter flights. Al-
though the injunctions were upon review later sub-
stantially affirmed, the defendants allege wrongful
injunctions, abuse of process, antitrust violations
and interference with contractual and advantageous
relations and seek substantial damages. The District
Court has ruled that damages for interference with
enjoined flights can be recovered, if at all, only to
the amount of $200,000 previously on deposit with
the Court as security, and that, in any event, there
can be no recovery for interference with illegal
flights. In view of the decisions in favor of the
Company in the case to date, that defendants'
charter programs were illegal, counsel has advised
that, in its opinion, the claims are without merit,
but that the outcome of the litigation cannot be
predicted.
Certain stockholders have commenced actions
against the Company, Northwest, Storer and certain
directors and officers of the Company and of Storer,
14
challenging the then-proposed merger of the Com-
pany with Northwest. In such actions, the plaintiffs
have alleged that they are acting for themselves
and minority stockholders of Northeast as a class,
that the terms of the then-proposed merger were
unfair to the minority stockholders-of the Company,
and that Storer and certain of its officers and direc-
tors had violated fiduciary and statutory duties to
Northeast stockholders. The actions were con-
solidated in the United States District Court for
the Southern District of New York, and the plain-
tiffs' application for a preliminary injunction was
denied. Thereafter, the proposed merger was aban-
doned. In October 1971, the plaintiffs filed a motion
asking the court to dismiss the claims against
Northwest and to determine that the actions may
be maintained as class actions against the remaining
defendants. The court has dismissed the claims
against Northwest and denied the plaintiffs' other
requests. The plaintiffs have been granted further
time to file an amended complaint.
There are pending claims charging airlines, includ-
ing the Company, with violations of air pollution
and noise laws or regulations. Proceedings in New
Jersey, Massachusetts and New York have been
settled by agreements under which the air carriers
have agreed to modify the engines on certain of
their aircraft by the end of 1972 in order to reduce
smoke emission.
There are other claims and proceedings pending
against the Company, developed during the ordi-
nary course of business, which in the opinion of
counsel are without merit or will not result in any
material liability.
15
Notes to Financial Statements
(continued)
H. Merger plans
On May 12, 1971 the Boards of Directors of the
Company and Delta approved an Agreement
of Merger, providing for the merging of
the Company into Delta. The terms of the Agree-
ment provide that Delta will be the surviving cor-
poration with stockholders of the Company re-
ceiving one-tenth of a share of Delta Common Stock
for each share of Northeast Common Stock held.
Storer has offered minority stockholders the option,
within thirty days after the consummation of the
merger, of exchanging each share of the Company
for $6.00 cash.
Consummation of the merger is subject to certain
conditions, including approval by the CAB, and the
President of the United States. The Agreement may
be terminated at any time after March 31, 1972 and
prior to the effective date of the merger at the
election of the Board of Directors of either of the
companies in the event that (in addition to other
contingencies) the merger has not then been ap-
proved by the CAB without any material adverse
conditions. However, either party has the right to
extend the March 31, 1972 date by written notice
but not beyond June 30, 1972.
Storer and Delta have entered into an agreement
providing interim financing of the Company by
Storer and Delta (note I) and the issuance by Delta
to Storer of warrants to purchase 500,000 shares of
Delta stock at $48 per share in exchange for the
transfer to Delta of the debt which the Company
owes Storer at the time of the consummation of
the merger. The aforementioned debt amounted to
$38,776,157 at December 31, 1971, which consists
of $5,200,000 interim financing, $28,000,000 work-
ing capital advances, and $3,968,764 liability on
reassignment of certain flight equipment contracts
(the latter two bearing annual interest at 1 % above
the prime rate) plus unpaid interest of $1,607,393
classified as accounts payable {$2,131,559 in interest
was accrued in 1971). The warrants will expire
May 1, 1978.
16
After a public hearing, a CAB Hearing Examiner in
October, 1971 published his decision recommending
that the CAB approve the merger in all respects,
except that the surviving corporation's authority to
serve the Miami-Los Angeles route should be sus-
pended pending a reexamination of the previous
award of that route to the Company. The Examiner
also recommended some modifications in the form
of labor protective provisions imposed by the CAB
in connection with previous mergers. Delta argued
that the recommended labor protective provisions
would materially affect Delta as the surviving
corporation and would justify Delta's termination
of the merger if not modified. The merger is opposed
by certain competing airlines, some of which have
indicated that they would not oppose the merger
if the CAB would impose certain route restrictions
upon the operations of the surviving carrier. The
decision is being reviewed by the full CAB.
I. Storer-Delta interim financing agreement
Under the terms of the Storer-Delta Agreement,
each party has agreed to advance to the Company
funds in equal amounts up to a maximum of $6
million each. The funds so advanced will be used
only for normal operating requirements, exclusive
of debt payments to Storer. In consideration of
Delta's undertaking, Storer has agreed, if necessary,
to continue to support the Company's operations
above the $6 million until the effective date of the
merger.
The advances of both Storer and Delta for interim
financing have been and will be evidenced by sub-
ordinated noninterest bearing notes. On June 15,
1971, the CAB approved the interim financing
provisions of the Storer-Delta Agreement. As at
December 31, 1971, Storer and Delta had each
advanced $5,200,000 to the Company pursuant to
such agreement.
17
The Agreement also provides that if the merger is
not consummated due to "fault" (as defined in the
Storer-Delta Agreement) by the Company or Storer,
then Storer will become obligated to repay the
notes to Delta with 6% interest. On the other hand,
if the CAB fails to approve the merger or if the
merger is not consummated due to the "fault" of
Delta, then neither the Company nor Storer will
be obligated to repay the notes. If the merger is
not consummated for any other reason, then the
notes will continue as subordinated, noninterest
bearing obligations of the Company.
18
Auditors' Opinion
Lybrand, Ross Bros. & Montgomery
Certified Public Accountants
To the Stockholders and Directors of
Northeast Airlines, Inc.
Boston, Massachusetts
We have examined the accompanying balance sheet
of Northeast Airlines, Inc. as at December 31, 1971
and the related statements of operations, accumu-
lated deficit, and changes in financial position 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 cir-
cumstances. We previously examined and reported
upon the financial statements of the Company for
the year ended December 31, 1970.
In our opinion, subject to the ability of the Company
to continue as a going concern as discussed in
note A, the aforementioned financial statements
present fairly the financial position of Northeast
Airlines, Inc. at December 31, 1971 and 1970 and
the results of its operations and changes in its
financial position for the years then ended, in con-
formity with generally accepted accounting
principles applied on a consistent basis.
-;f'~-.,f ~zt,,-Y--71'?7
Boston, Massachusetts
February 22, 1972
19
Officers and Directors
OFFICERS
George B. Storer
Bill Michaels
Lewis E. Lyle
Dan D. Chandler
Garner W. Miller
Stuart W. Patton
N. Ralph Tipaldi
Edwin H. Bishop
Arno W. Mueller
John C. Nebbia, Jr.
Henry E. Foley
Clarence I. Peterson
22
Chairman of the Board
President and Chief Executive Officer
Executive Vice President and
General Manager
Vice President- Operations
Vice President -Technical Services
Vice President - Law
Vice President - Marketing
Vice President - Civic Affairs
Vice President - Finance and Treasurer
Assistant Treasurer and Corporate
Controller
Clerk
Assistant Clerk
DIRECTORS
James W. Austin
Jacqueline c;:ochran
Leonard Dalsemer
A. D. Davis
Robert C. Hill
Curtis M. Hutchins
Lewis E. Lyle
Bill Michaels
Arno W. Mueller
Stuart W. Patton
Harry M. Stevens, II
George B. Storer
George B. Storer, Jr.
Peter Storer
David A. Stretch
Francis W. Sullivan
Consultant
Rancher
Executive Vice President, International
Paper Co.
Vice Chairman, Winn-Dixie Stores, Inc.
Ambassador to Spain
Chairman, Dead River Company
Executive Vice President and
General Manager
President, Northeast Airlines, Inc. and
Storer Broadcasting Company
Vice President - Finance and Treasurer
Northeast Airlines, Inc. and
Storer Broadcasting Company
Vice President - Law
Vice President and Treasurer, H. M.
Stevens, Inc.
Chairman of the Board, Northeast
Airlines, Inc. and Storer Broadcasting
Company
Consultant
Executive Vice President, Storer
Broadcasting Company
Chairman, Executive Committee,
Texas Industries, Inc.
Attorney at Law
EXECUTIVE COMMITTEE
George B. Storer, Chairman Bill Michaels
Leonard Dalsemer
A. D. Davis
Lewis E. Lyle
Stuart W. Patton
Arno W. Mueller
REGISTRARS & TRANSFER AGENTS
The First National Bank of Boston, Boston, Massachusetts
The Chase Manhattan Bank, New York, New York
GENERAL COUNSEL
Foley, Hoag & Eliot, Boston, Massachusetts
AUDITORS
Lybrand, Ross Bros. & Montgomery
23
NOTICE to Stockholders
Part 245 of the Economic Regulations of the Civil Aero-
nautics Board requires that each Air Carrier notify its
shareholders by notice in the carrier's annual report to
shareholders, "that any person who owns as of December
31 of any year or acquires ownership, either beneficially or
as trustee, of more than 5 per centum, in the aggregate, of
any class of capital stock or capital of the air carrier shall
file with the Board a report containing the information
required (by Subsection 13 or Part 245) on or before April 1
as to capital stock or capital owned as of December 31 of
the preceding year and within 10 days of the acquisition,
unless such person has otherwise filed with the Board a
report covering such acq::isition or ownership". And "that
any shareholder who believes that he may be required to
file such a report may obtain further information by writing
to the Director, Bureau of Operating Rights, Civil Aero-
nautics Board, Washington, D.C. 20428".
24 Printed in U.S.A.