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.