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ISLAND AIR FERRIES, INC.
MacARTHUR AIRPORT
BOHEMIA, N. Y.

REPORT OF THE PRESIDENT

To the Stockholders:

Submitted herewith are the Company's Profit and Loss Statement for the year 1950 and the Balance Sheet as of December 31, 1950 as prepared by Thomas F. Hanley & Co., Certified Public Accountants. Also included, is a resume of the company's 5 year Financial History.

In 1950, the 5th year of the Company's operation, the substantial effort of its management was directed toward insuring the survival of the Corporation, following the tremendous drain upon its funds which has resulted from protracted Civil Aeronautics Board proceedings. It will be evident from the figures shown under Flight Operations Expense and Flying Revenue, that flight activity during the calendar year 1950 was reduced to an absolute minimum, and that most of the Company's revenue was obtained from the operation of the petroleum sales and incidental income from ground operations at MacArthur Airport.

By referring to Note 2 on the Balance Sheet furnished with this Report, you will see just how much it has cost the Corporation to secure and protect the Franchise which was awarded us by the Civil Aeronautics Board in February of 1948. Vigorous and consistent efforts have been and are being made to convert this expenditure into a long term asset through the obtaining of a permanent Route Franchise from C.A.B., and a continuing effort to obtain mail carriage privileges over our Route System. Toward these fundamental objectives, the New York Legal Firm of Sullivan, Donovan, Heene-