Western Air Express Annual Report 1935

Western Air Express Corporation
and Subsidiary
ANNUAL REPORT
1 935
WESTERN AIR EXPRESS CORPORATION
OFFICERS
President ,., ,., ,., ,., ,., ALVIN P. ADAMS
Vice--President ,., ,., ,., ,., ,., ,., C. N. JAMES
Secretary and
Treasurer,.,,.,,., L. H. DwERLKOTTE
Ass't. Secretary ,., ,., ,., ,., E. H. BROWN
ALVIN p. ADAMS
w. G. BURHENN
DIRECTORS
L. H. DWERLKOTTE
HAROLD P. FABIAN
C. N. JAMES
REGISTRAR
Citizens National Trust & Savings Bank, Los Angeles, California
STOCK TRANSFER AGENT
Security--First National Bank of Los Angeles, California
AUDITORS
Peat, Marwick, Mitchell & Co.
GENERAL OFFICES
Union Air Terminal, Burbank, California
March 10, 1936
To the Stockholders:
There is submitted herewith consolidated profit and loss statement of your company for
the calendar year 1935, together with a consolidated balance sheet of the company and its
subsidiary as of December 31, 1935, to which is appended the report of Messrs. Peat, Marwick,
Mitchell & Company, the accountants for your company.
Operations for the year resulted in a net loss of $8,188.41 after depreciation charges of
$71,108.82 and taxes. This compares with a net loss in 1934 of $153,509.70 after depreciation
charges of $62,348.54 and taxes. The 1935 profit and loss statement reflects the absorption of
substantial charges of a non~recurring nature.
The improved operating statement is principally accounted for by three factors: First, air
mail revenues showed a substantial gain, increasing from $172,007.21 in 1934 to $289,763.45 in
1935. This resulted from the authorization by the Post Office Department of a second schedule
between Los Angeles and Salt Lake City on February 15, 1935; and from an increase on
March 1, 1935 in air mail rates by the Interstate Commerce Commission, from 24c per mile
under the contract rate to approximately 33~ 1/3c per mile.
Second; passenger revenues over the San Diego~Los Angeles~Salt Lake City route broke
all previous records, totaling $269,367.51 for 1935, as compared with $182,777.23 in 1934, and
with $226,912.16 in 1933, the previous high record. This improvement for the past year resulted
from (a) an increase in air travel generally; (b) the standardization of our service with that of
United Air Lines both as regards flying equipment and passenger service, in order to offer a
through standard service CoasMo~Coast; (c) an intensive traffic solicitation and advertising
program; (d) the scheduling of daylight flights over Boulder Dam; (e) considerably faster
services inaugurated during the year by your company and United Air Lines; (f) the addition of
a third round trip passenger and express schedule during the summer months; and ( g) institution
of schedules better adapted to meet the needs of the traveling public.
Third; in spite of an increase of 24.5% in revenue miles flown from 974,432 in 1934 to
1,213,724 in 1935, operating expenses increased only $35,611.11, or 6.7%. As a result, operating
costs per mile were reduced to 46.6c from 54.5c. It is interesting to note that although passenger
and express revenue increased $90,445.95, or 45.1%, traffic and advertising costs increased only
$2,034.95, or 6.4%. A saving in General and Administrative expenses in 1935 was effected of
$41,832.56 from 1934, a total of 42%.
Since the first of the year notes payable in the amount of $48,568.46, representing the
unpaid balance on equipment purchases, have been paid.
The following operating statistics reflecting the improvement in business over the previous
year are of interest:
Revenue Miles Flown ___
_
_________ _
% of Scheduled Miles Flown
Revenue Passengers Carried _
__ _
Revenue Seat Miles _____
_________
_
_
Mail Pounds Carried ______________
_
Express Pounds Carried _______
_
_
_
1935
1,213.274
99.09%
13,736
4,915,129
298,287
198,389
1934
974,432
94.65%
7,401
3,336,738
208,197
73,158
% Increase
24.51
4.69
85.60
47.30
43.27
171.18
Your management is looking forward to further improvements in 1936. An additional gain
in air passenger travel in general is anticipated. By improvement in service and additional
selling features, it is hoped your company will be able to participate materially in this
development.
Respectfully yours,
AL VIN P. ADAMS
President
WESTERN AIR EXPRESS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
As at December 31, 1935
ASSETS
Current Assets:
Cash in Banks and on Hand_____
___
____________
______________
______
______
______ $ 82,400.07
Notes Receivable ____
______________________
______________
_________________
____
_
_
__________ _
Accounts Receivable, less Reserve of $5,098.17 _________
_____
_______
_
Accounts Receivable from United States Post
Office Department under old Air Mail Contract __________
_
_
1,854.70
48,219.60
50,711.43
Total Current Assets -------------------------------------------------- 183,185.80
Inventory of Parts and Supplies, less Reserve of $5,875.93 ________
___ _
Prepaid Expenses ------------------------------------------------------------------------------
United States Government Bonds and Notes ( Par Value
$35,000.00) deposited with United States Post Office
Department --------------------------------------------------------------------------------
Miscellaneous Stocks and Bonds ----------------------------------------------------
Properties and Equipment-at Cost:
Land -------------------------------------------------------------------- $ 13,256.95
Hangars, Buildings, Airplanes, Engines and
Other Equipment -------------------------------------- 353,878.36
367.135.31
Less Reserve for Depreciation_
_
_________
___
_
_
_
___
________ 131,688.29
235,447.02
Unimproved Real Estate ---------------------------------- 147,876.85
Airport Leases and Rights not used in
Operations ------------------------------------------------- 35,975.00
16,765.48
9,442.46
35,054.34
1,387.42
Other Property not used in Operations (Net) 8,702.65 428,001.52
Total ---------------------------------------------------------------------------- $673,837.02
LIABILITIES
Current Liabilities:
Notes Payable for Airplane Purchases__________
_____________
_
_
________
___ $ 48,568.46
Accounts Payable ---------------------------------------------------------------------- 20,536.09
Accrued Expenses ---------------------------------------------------------------------- 12,691.10
Total Current Liabilities ------------------------------- 81,795.65
Capital Stock:
Authorized, 500,000 Shares of $1.00 each
Issued, 222,645 Shares ------------------- $222,645.00
Capital Surplus ---------------------------------------------------- 413,887.12
Operating Deficit ------------------------------------------------------
Contingent Liabilities:
Proposed Additional Assessment
of Federal Income Tax in--
eluding Interest for the Tax.-
able Year 1933 _________
_
_
_______
__ $ 20.000_00
636,532.12
44 .490. 75 592,041.37
Total ---------------------------------------------------------------------------- $673,837.02
WESTERN AIR EXPRESS CORPORATION AND SUBSIDIARY
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the Year ended December 31, 1935
Gross Revenue:
Mail ........ .................................................................................... .
Passenger ................................................................................... .
Express and Freight ................................................................... .
Other Airplane Earnings ............................................................ .
Sale of Parts, Supplies, Labor, etc .............................................. .
Gross Revenue ............................................................. .
Operating and General Expenses.............................. $495,295.20
Depreciation ................................................................ 71,108.82
Net Operating Income ............................................. .
Miscellaneous Charges:
Legal Expenses re old Airmail Contract ....... .
Loss on Airplane Crash ..................................... .
Trustee's Expense re Dividend Distributions ... .
Amortization of Airport Leases and Rights ..... .
Investment in Santa Fe, New Mexico
Airport written off ..................................... .
Interest Charges ............................................... .
Sundry ................................................................ .
Less Miscellaneous Income:
Profit on Sale of Equipment.......... $4,644.23
Interest Earned .............................. 1,239.59
Sundry ............................................. 1,500.91
Miscellaneous Charges
13,068.16
7,650.51
4,245.66
3,300.00
1,296.88
1,885.55
4,710.99
36,157.75
7,384.73
(Net) ................................................................. .
Loss ............................................................................. .
OPERATING DEFICIT ACCOUNT
$289,763.45
269,367.51
18,934.64
2,791.95
6,131.08
586,988.63
566,404.02
20,584.61
28,773.02
$ 8,188.41
Balance, as at December 31, 1934.................................................... $ 41,302.34
Loss for the Year ended December 31, l 935.................................... 8,188.41
49,490.75
Less Unused Reserve for Loss on Disposition of
Wasp Engines provided in 1934.............................................. 5,000.00
Balance, as at December 31, 1935.................................................... $ 44,490.75
To the Board of Directors of
WESTERN AIR EXPRESS CORPORATION
We have made an examination of the Consolidated Balance
Sheet of Western Air Express Corporation and its wholly owned
subsidiary, Western Air Express, Inc., as at December 31, 1935
and of the Consolidated Profit and Loss and Operating Deficit
Accounts for the year 1935. In connection therewith, we examined
or tested accounting records of the Companies and other support--
ing 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 accompany--
ing Consolidated Balance Sheet and related Profit and Loss and
Operating Deficit Accounts fairly present, in accordance with ac--
cepted principles of accounting consistently maintained by the
Companies during the year under review, their consolidated posi--
tion at December 31. 1935, and the results of their operations for
the year.
Los Angeles, California,
February 20, 1936.
PEAT., MARWICK, MITCHELL & Co.