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ARTHUR YOUNG AND COMPANY
ACCOUNTANTS AND AUDITORS
165 BROADWAY
NEW YORK 6

NEW YORK
CHICAGO
ATLANTA
BOSTON 
CLEVELAND
DALLAS
DETROIT
HOUSTON
KANSAS CITY
LOS ANGELES
MILWAUKEE
PHILADELPHIA
PITTSBURGH
SAN FRANCISCO
TOLEDO
TULSA
WICHITA
CANADA
ENGLAND
FRANCE
VENEZUELA

February 28, 1955

The Stockholders
Colonial Airlines, Inc.:

We have examined the balance sheet of Colonial Airlines, Inc. at December 31, 1954 and the related statement of income and earned surplus (deficit) for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, subject to retroactive adjustment of mail rates from June 1, 1954 (Note 2) and to the outcome of pending proceedings and actions resulting from the investigation by the Civil Aeronautics Board (Note 3), the accompanying balance sheet and statement of income and earned surplus (deficit) present fairly the financial position of Colonial Airlines, Inc. at December 31, 1954 and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.

Arthur Young & Company