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MEMORANDUM

[[image]] Telephone D i g b y 4-2000
FROM 
DENIS S. DANAHY

MR. E. BALLUDER, PERSONAL
% PAN AMER. WORLD AIRWAYS, INC.
135 EAST 42ND ST.
NEW YORK 17, N.Y.

FURTHER IMPROVEMENT INDICATED

This year should produce record revenues and earnings for PAN AMERICAN WORLD AIRWAYS with gross around $235 million, 8% above 1953, and net at about $12 million, or roughly $2 a share vs. $1.76 in 1953. Some further improvement is indicated for 1955. There is ample protection for the 80c dividend rate. Pan American's payout policy is relatively liberal, and 1954 is the 14th consecutive year in which dividends have been paid. But debt of $43 million at the end of 1953 was at an all-time high, and new planes costing close to $50 million are on order for delivery in 1955 and 1956. This may temper the dividend policy. Operations of Pan American are currently being reviewed by the Civil Aeronautics Board, following Supreme Court decisions that subsidy mail payments must be computed with reference to the entire operation of the system. The company's U.S. mail revenues of $39 million annually include a subsidy of about $25 million. 
(Recent Price-20; 1954 Range-20 3/8-9 3/8; Last 12 mos. divs. -$.80; Yield-4.0%)