Western Air Express Annual Report 1932

Western Air Express Corporation
and Subsidiary Companies
ANNUAL REPORT
1932
WESTERN AIR EXPRESS CORPORATION
OFFICERS
President .. .. .. .. .. HARRIS M. HANSHUE
Vice--President ........ W. M. GARLAND
Vice--President .............. C. E. WILSON
Treasurer ............ ,., .... JOHN C. FELLI
Secretary and Assistant
Treasurer .................. J. W. MILLER
Assistant Secretary .... ,., .. L. R. BEARDSLEE
ALVIN P. ADAMS
HARRY CHANDLER
M. C. COOPER
W. R. FAWCETT
FRED J. FISHER
JACK FRYE
DIRECTORS
w. M. GARLAND
HARRIS M. HANSHUE
E. 0. McDONNELL
ROLAND PALMEDO
J. M. SCHOONMAKER, JR,
C. E. WILSON
REGISTRARS
Citizens National Trust & Savings Bank, Los Angeles, California
STOCK TRANSFER AGENTS
Security~First National Bank of Los Angeles, California
AUDITORS
Peat, Marwick, Mitchell & Co.
GENERAL OFFICES
United Airport, Burbank, California
April 28, 1933
To the Stockholders:
Herewith is submitted the Annual Report upon the affairs of your Company for the year
ended December 31, 1932.
The Net Earnings available for dividends from operations of your Company for the year
1932 amounted to $43,271.44, which is equivalent to 19c per share for 222,811 shares outstand-
ing as of December 31, 1932. This compares with Net Earnings for 1931 of $193,382.11."
equivalent to 91c per share for 210,792 shares outstanding as of December 31, 1931.
Total real estate, plant, and equipment accounts as of December 31, 1932, after deducting
Reserve for Depreciation, amounted to $435,328.45, a reduction of $19,476.81 from the total
of these accounts, as of December 31, 1931, of $454,805.26. This decrease is, in the greater
part, accounted for by deductions for depreciation.
For the year 1932 charges against income on account of depreciation amounted to
$180,173.90, compared with $173,131.49 for the year 1931.
The Net Working Capital, as of December 31, 1932, amounted to $696,336.53 including
Cash on Hand and in Banks of $677,290.93, as compared to $749,258.45 Net Working Capital
December 31, 1931, including Cash on Hand and in Banks of $649,121.08.
For the first seven and one-half months of the past year, the night run between Salt Lake
City, Utah, and Los Angeles, California, was discontinued by the Post Office Department,
which curtailment of operations was reflected in the revenues and earnings of your Company
for that period. On August 15, 1932, the night flight, with mail, was reinstated by the Post
Office Department and is in operation at present.
In 1932 the Post Office Department, in line with the general economies put into practice
by the Government, made various downward adjustments on the mail rates paid air mail oper-
ators. The lowered rates, together with a considerable decline in mail poundage, reduced
revenues from mail operations, for your Company by approximately 40% under 1931. Our
mail poundage decreased from 773,000 pounds in 1931 to 200,500 pounds in 1932. Much of
this decrease resulted from the fact that our operations, were curtailed for the first seven and
one-half months of the year. During this period and the remaining four and one-half months
of the year, the mail poundage of Transcontinental & Western Air, Incorporated, increased, so
that the loss to your Company was somewhat offset by the gain to this affiliated corporation.
As a partial offset to the reduced mail revenue, there was an increase of approximately
$71,000 in Passenger and Express Revenue in 1932 over 1931.
A preliminary Operating Statement of Transcontinental & Western Air, Incorporated, for
the year ended December 31, 1932, shows a Net Income applicable to the stock owned by
Western Air Express Corporation of $159,809.35, which has not been reflected in the Profit and
Loss account of your Company.
As a result of general business conditions and contemplated readjustments in all lines of
business, it is not possible to forecast with any degree of certainty what the conditions of the
aviation industry as a whole, and your Company in particular, will be during the year 1933; but
the marked increase in passenger and express business during the year just passed gives promise
of additional increases in these two branches of your Company's operations.
Respectfully yours,
HARRIS M. HANSHUE
President
WESTERN AIR EXPRESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
As at December 31, 1932
ASSETS
Current Assets:
Cash in Banks and on Hand ................................................. .
Accounts Receivable, less Reserve $27,423.44 ....................... .
Inventories of Parts and Supplies .......................................... .
Total Current Assets ............................................... .
Prepaid Expenses and Def erred Charges ..................................... .
United States Government Bonds-Par Value
$24,000.00-Deposited with United States
Post Office Department ......................................................... .
Sundry Investments-at Market ................................................... .
* Investment in Common Stock of Transconti--
nental & Western Air, lnc.,-296,825 Shares, at Cost ....... .
Properties and Equipment:
Airports and Leases
Hangars, Buildings, Airplanes, Engines
and Other Equipment ........................... .
Less Reserve for Depreciation ................... .
Unimproved Real Estate ........................... .
Other Property not used in Operations ..... .
$ 59,131.95
611,752.08
670,884.03
394,790.25
276,093.78
147,876.85
11,357.82
$ 677,290.93
140,724.94
35,706.90
853,722.77
15,754.22
24,371.19
13,087.42
2,720,898.98
435,328.45
$4,063,163.03
* A preliminary Balance Sheet as at December 31, 1932, received from Transcontinental &
Western Air, Inc., shows a net book value of $2,262,962.42 applicable to the stock owned
by Western Air Express Corporation (approximately 47% of total outstanding). The
difference between this figure and the cost of the stock as shown above ($2,720,898.98)
represents, for the most part, the Company's proportion of operating losses from inception
to December 31, 1931. According to preliminary figures, the operations for the year ended
December 31, 1932 resulted in a net profit (see footnote to Profit and Loss Account.)
LIABILITIES
Current Liabilities:
5% Promissory Notes Payable-Due July 1, 1933 ........... .
Contracts Payable ................................................................. .
Accounts Payable-Trade ................................................... .
Accrued Expenses ........... ........................................................ .
Total Current Liabilities ....................................... .
5% Promissory Notes Payable-Due July 1, 1934 ................... .
Reserves for Maintenance of Airplanes and
Engines, and for Crash Insurance ....................................... .
Capital Stock:
Authorized, 500,000 Shares of $10.00 each
Issued, 234, 102 Shares .............................. $2,341,020.00
Less 11,291 Shares held in Treasury ....... . 112,910.00
2,228,110.00
Paid--ln and Capital Surplus ................................ 1,010,385.73
Earned Surplus ................................................... . 536,813.37
Contingent Liabilities-None Reported.
To the Board of Directors of
WESTERN AIR EXPRESS CORPORATION:
$ 42,100.00
83,638.15
54,005.27
15,101.43
194,844.85
60,700.00
32,309.08
3,775,309.10
$4,063,163.03
We have examined the accounts of Western Air Express Corporation and its Subsidiaries,
Wes tern Air Express, Inc., and Aero Corporation of California, Inc., for the year ended Decem~
ber 31, 1932. In our opinion, based on our examination and information furnished to us, the
accompanying Consolidated Balance Sheet and relative Profit and Loss and Surplus Accounts
set forth the financial condition of the Companies as at December 31, 1932, and the result of the
operations for the year.
Los Angeles, California,
March 7, 1933. PEAT, MARWICK, MITCHELL & CO.
WESTERN AIR EXPRESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the Year ended December 31, 1932
Gross Revenue:
Mail .......................................................................................... .
Passenger -
Other Airplane Earnings ....................................................... .
Sale of Parts, Supplies, Labor, Rentals, etc .......................... .
Gross Revenue ....................................................... .
Operating and General Expenses ...................... $ 721,785.33
Depreciation ................. ~............ 180,173.90
Net Operating Profit ........................................... .
Interest and Discount Earned, less interest
Charges ....................................................... .
Discount on Long Term Debt Retired ........... .
Sundry Income ................................................... .
Miscellaneous Charges ( excluding Losses
charged to Special Reserve in amount of
$120,011.25)
Net Income, before deducting Loss
10,696.97
11,345.21
25,039.67
47,081.85
9,583.08
of Aero Corporation of California,
Inc., ( a Subsidiary) ........................................... .
Loss of Aero Corporation of California, Inc.,
( a Subsidiary), excluding Liquidation Losses
Charged to Special Reserves in amount of
$147,817.92 ............................................................................. .
$ 774,618.24
150,241.42
6,520.38
3,782.75
935,162.79
901,959.23
33,203.56
37,498.77
70,702.33
27,430.89
Net Income .............................................................. $ 43,271.44
A preliminary Income Account for the year ended December 31, 1932, received from Transcon~
tinental & Western Air, Inc., shows a net income applicable to the stock owned by Western
Air Express Corporation of $159,809.35, which has not been reflected in the above Profit
and Loss Account.
WESTERN AIR EXPRESS CORPORATION AND SUBSIDIARIES
EARNED SURPLUS
Balance as at December 31, 1931................................................ $ 495,494.29
Add:
Net Income for the Year ended December
31, 1932 :........................ $ 43,271.44
Adjustment for Excessive Depreciation
taken in Prior Years ............................. . 61,063.67
Unused Portion of Reserve for Contingen--
cies ........................................................... . 36,983.97
Deduct Loss on Settlement of Airplane Pur--
141,319.08
636,813.37
chase Contract .................................................................... 100,000.00
Balance as at December 31, 1932 ............................................ $ 536,813.37
CAPITAL SURPLUS
Balance as at December 31, 1931.. .............................
................... $1,010,285.73
Add Discount on Preferred Stock of Aero Cor--
poration of California, Inc . ( a Subsidiary)
Purchased ................................................................................ 100.00
Balance as at December 31, 1932.................................................. $1,010,385.73