Western Air Express Annual Report 1933

Western Air Express Corporation
and Subsidiary Companies
ANNUAL REPORT
1933
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
E. R. BREECH
HARRY CHANDLER
w. M. GARLAND
DIRECTORS
REGISTRARS
HARRIS M. HANSHUE
JOHN THOMAS SMITH
E. R. STETTINIUS
C. E. WILSON
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
To the Stockholders:
Herewith, is submitted the Annual Report upon the affairs of your Company for the year
ended December 31, 1933.
The Net Earnings from all operations of your Company for the year 1933 amounted to
$186,250.48, after providing for Federal Income Tax. This is. equivalent to approximately Mc
per share for 222,811 shares outstanding as of December 31, 1933. This compares with Net Earn.-
ings for 1932 of $43,271.H, equivalent to 19c per share for the same amount of outstanding
capital stock. Although the records show that 234,102 shares of common capital stock have been
issued, there is held in the Treasury of the Company 11,291 shares.
The marked increase in earnings for 1933 over 1932' is principally accounted for by two
factors. First; pending the development and production of satisfactory flying equipment, your
Company has not replaced any of its airplanes or engines, which were fully depreciated and the
resultant decrease in depreciation charges to expense was unduly large. The charges against
income on account of depreciation for 1933 ,
amounted to $129,522.60, compared with $180,173.90
for the year 1932. Second: during the first seven and one--half months of 1932 the night
schedule between Salt Lake City and Los Angeles was discontinued by the Post Office Depart-
ment, which curtailment of operations seriously affected the 1932 earnings. During 1933 both
day and night schedule~ were operated between these terminals throughout the year.
On September t, 1933 the Post Office Department made further downward adjustments of the
rates paid your Company for the transportation of mail. As a result of these adjustments, on the
same date, the mail, passenger and express operations between El Paso, Texas, and Albuquerque,
N. M., and between Pueblo, Colorado, and Amarillo, Texas, were temporarily discontinued.
The net working capital, as of December 31, 1933, amounted to $935,493.97, including
$8H,606.61 cash in banks and on hand, as comp,ared to $696,336.53 net working capital
at December 31, 1932, including cash on hand and in banks of $677,290.93. There is therefore
available an adequate cash reserve for the purchase of new flying equipment.
Revenue from passenger and express transportation showed a healthy increase in 1933
over 1932. The passenger revenue for 1933 was $226,912.16 as compared to $150,241.42 for
1932. The increase in express and baggage revenue for 1933 was $5,601.36 over the
preceding year.
A preliminary Operating Statement of Transcontinental & Western Air, Inc., for the year
ending December 31. 1933, shows a net income applicable to the stock owned by Western Air
Express Corporation of $59,636.17, which has not been reflected in the Pro.fit and Loss Account
of your Company.
Respectfully yours,
HARRIS M. HANSHUE
President
WESTERN AIR EXPRESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
As at December 31, 1933
ASSETS
Current Assets:
Cash in Banks and on Hand ............................................... .
Marketable Securities ............................................................. .
Accounts Receivable, less Reserve $32,500.00 ................... .
Inventories of Parts and Supplies, at Cost.. ......................... .
Total Current Assets ............................................. .
Prepaid Expenses ........................................................................... .
United States Government Bonds-Par Value
$24,000.00-Deposited with United States
$ 844,606.61
25,239.75
118,867.36
38,714.18
1,027,427.90
14,672.98
Post Office Department .......................................................... 24,371.19
*Investment in Common Stock of Transconti--
nental & Western Air, lnc.-296,825 Shares, at Cost........ 2,720,898.98
Properties and Equipment:
LIABILITIES
Current Liabilities:
1 5% Promissory Notes Payable-Due July 1, 1934 ........... .
Accounts Payable-Trade ................................................... .
Accrued Expenses ................................................................. .
Reserve for Federal Income Taxes ....................................... .
Total Current Liabilities ....................................... .
Operating Reserves
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--In and Capital Surplus .............................. 1,010,385.73
$ 48,300.00
36,931.78
16,073.34
15,000.00
116,305.12
24,691 .65
Airports and Leases ...................................... $ 55,831 .95
Earned Surplus ................................................... . 770,626.37 4,009,122.10
Hangars, Buildings, Airplanes, Engines
and Other Equipment ............................. .
Less Reserve for Depreciation ................... .
Unimproved Real Estate ............................. .
Other Property not used in Operations ....... .
Total
594,811.87
650,643.82
448,244.55
202,399.27
147,876.85
12,471.70 362,747.82
$4,150,118.87
A preliminary Balance Sheet as at December 31, 1933 received from Transcontinental & Western
Air, Inc., shows a net book value/ of $2,322,291.94 applicable to the stock owned by
Wes~ern Air Express Corporation (approximately 47% of total outstanding).
Contingent Liabilities-None Reported.
Total $4,150,118.87
WESTERN AIR EXPRESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For' the Year ended December 31, 1933
Gross Revenue:
Mail ......................................................................................... .
Passenger ................................................................................ .
Other Airplane Earnings ....................................................... .
Sale of Parts, Supplies, Labor, etc ...................................... .
Gross Revenue ....................................................... .
Operating and General Expenses........................ $ 719,505.78
Depreciation 129,522.60
Net Operating Profit ............................................. .
Interest Earned, less Interest Charges ........... .
Sundry Income-Net ......................................... .
Net Income, before Federal
14,065.55
18,878.75
Income Taxes ..................................................... .
Provision for Federal Income Taxes-----
$ 775,898.21
226,912.16
12,121.74
2,402.45
1,017,334.56
849,028.38
168,306.18
32,944.30
201,250.48
15,000.00
Net Income .............................................................. $ 186,250.48
EARNED SURPLUS
Balance as at December 31, l 932 ........................................................ $ 536,813.37
Add:
Net Income for the Year ended December
31, 1933 .................................................... $ 186,250.48
Adjustment for Excessive Depreciation and
Maintenance Reserves provided in Prior
Years ......................................................... . 47,562.52 233,813.00
Balance as at December 31, 1933.................................................. $ 770,626.37
A preliminary Income Account for the year ended December: 31, 1933, received from Transcon-
tinental & Western Air, Inc., shows a net income applicable to the stock owned by Western
Air Express Corporation of $59,636.17, which has not been reflected in the above Profit
and Loss and Earned Surplus Accounts.
To the Board of Directors of
WESTERN AIR EXPRESS CORPORATION:
We have made an examination of the Consolidated Balance
Sheet of the Western Air Express Corporation and Subsidiary
Companies, Western Air Express, Inc., and Aero Corporation of
California, Inc., as at December 31. 1933. and of the Consolidated
Income and Surplus Accounts: for the year' 1933. In connection
therewith. we examined or tested accounting records of the Com,..
panies and other supporting evidence and obtained information
and explanations from officers and employees of the Companies;
we also made a general review of the accounting methods and of
the operating and income accounts for the year. but we did not
make a detailed audit of the transactions.
In our opinion. based upon such examination, the accompanying
Consolidated Balance Sheet and related Consolidated Income and
Surplus Accounts fairly present. in accordance with accepted
principles of accounting consistently maintained by the Companies
during the year under review. their consolidated position at Decem,..
her 31. 1933. and the consolidated results of their operations for
the year.
Los Angeles. California,
March 5. 1934.
PEAT, MARWICK. MITCHELL & Co.