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As of the same date, current assets, including cash of $1,222,011, totalled $19,737,781, and current liabilities, including the $6,000,000 V-Loan, were $14,629,396.

In September 1957, the claim for relief against the United States Government for costs incurred (during the years ended October 31, 1954 and 1955) on a defense contract in excess of contract amount was denied by the Air Material Command of the United States Air Force. The Corporation further questioned the equity of this decision, but the claim was again denied; therefore, the claim of $2,210,483 less applicable Federal income tax adjustments of 1,138,431 (including $417,129 for the year ended October 31, 1957) has been written off against earnings retained for use in the business. 

While CONTINENTAL AVIATION still is in a rather restricted financial position, its present working capital, together with the current sizeable earnings, would appear entirely adequate for its present volume of business, and no new financing is contemplated at this time.

SELECTED INCOME ACCOUNT DATA
Years Ended October 31

(000 omitted)


                                1957             1956             1955           1954           1953
                              --------          -------          ------         -------        ------
Net Sales                      37,664           20,802           16,904         11,336         14,524

  Cost of Products Sold        33,819           19,169           15,725         10,269         13,346

  Administrative & General Expense  1,435         981              712            395           261

  Depreciation and Amortization   158             163              163            106           101**

  Interest Expense                463             395              186            95             60

                                -------        -------           ------         -------        -------
Net Earnings before Taxes     $  1788          $   92            $  116         $ 471          $ 755
  Federal Incomes Taxes***        891              85              60             235            430

                               -------          ------           -------       --------         -------
Net Earnings                  $  897            $  7             $   56        $   236          $  325

   Adjustment Regarding Claim Write-Off
---   ---   (1,327)  (162)  ---

Net Earnings after Adjustments
$897  $7  $(1,271)  $74  $325

Earned per Share
$1.69  $0.01  $(2.40)  $0.14  $0.61

* The years 1954 and 1955 reflect the adjustment resulting from the write-off of the claim against the United States Government.
** Including $44,673 of amortization of development of engines, and patents, which was not an allowable deduction for tax purposes.
*** Includes deferred income taxes, applicable to excess of depreciation permitted for tax purposes over normal depreciation. of $36,000 in 1957, $42,000 in 1956, $40,000 in 1955 and $27,000 in 1954.

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Additional copies available without charge on request to the following De Witt Conklin Organization offices:
120 Broadway New York 5, N. Y. WOrth 4-6056
Bank of America Bldg. Los Angeles 14, Calif. TRinity 1295
1622 Kirby Building Dallas 1, Texas RIverside 2-3523
Russ Building San Francisco 4, Calif. YUkon 6-2842