AMERICA AND SUBSIDJtRIES^
Notes to Financial Statements
For the Year ended April 30, 1953
Note 1—These statements do not reflect $900,747 of
net unrealized gain on investments and mortgages
Note 2—The book values of investment securities have
been stated on the basis of Court values if such determination was made, market values at April 30,
1946 for securities then owned by subsidiaries, market
values at May 16, 1946 for securities then owned by
Sheraton Corporation or United States Realty and
Improvement Company, and cost for securities purchased since May 16,1946.
Securities with a book value of $5,870,782, which
are eliminated in consolidation, are pledged to secure
Note 3—Substantially all of the real estate and furniture and equipment are pledged to secure mortgages
or other long-term debt.
The fixed assets have not been stated at the net
values as shown by the books of the respective companies but at net values after depreciation, computed
on the following bases:
(1) values determined by the District Court of the
United States for the Southern District of New
York in connection with the reorganization of
United States Realty and Improvement Company if such determination was made,
(2) values determined by officers of Sheraton Corporation for properties owned at April 30, 1946 for
which the Court did not make a determination,
(3) cost for all assets acquired since that date, with
the inclusion therein of the excess of the cost of
investments made in subsidiaries' securities over
the equity acquired by such investments as shown
by the books of the subsidiaries at the dates of
Note 4—The company is obligated to make available
funds, not exceeding $90,000, to defray expenses of
litigation in connection with certain claims which
may be asserted by the Trustee of United States
Realty and Improvement Company in addition to
$10,000 heretofore paid.
Note 5—All of the preferred stock outstanding in the
hands of the public was called for redemption April
30, 1952. The shares in the Treasury were cancelled
and retired during the year ended April 30, 1953.
At the next annual meeting, the stockholders will
vote on the elimination of the authorized preferred
stock, 110,000 shares, from the capital structure of
Note 6—Of the total common shares shown as issued
and issuable, 5,381 shares are issuable upon surrender
of old shares of United States Realty and Improvement Company, and shares of Sheraton Corporation
and its predecessor corporations.
Note 7—The securities of 26 of the consolidated subsidiaries of Sheraton Corporation of America were
acquired at costs which were in total $4,889,102 less
than the book values of the equities thus acquired.
That difference is shown in the balance sheet as Surplus from Consolidation. The securities of 8 of the
consolidated subsidiaries were acquired at $4,048,563
more than the book values of the equities thus acquired. That difference has been treated in these
statements as additional cost of fixed assets and
allocated on a prorata basis, $1,305,478 to land and
leaseholds and $2,743,085 to buildings. Depreciation
of buildings and amortization of leaseholds is accordingly stated herein at $110,675 more than is shown
by the subsidiaries.
Note 8—With the exception of 2 corporations excluded
in prior years, the consolidation includes all subsidiaries 50% or more owned, totalling 55.
Note 9—The portion of consolidated earned surplus
applicable to Canadian subsidiaries is $1,780,484,
which is subject to a 5% withholding tax on dividends.
Note 10—The properties of Canadian subsidiaries are
included at Canadian dollar cost after adjustment to
United States dollar equivalents reflecting exchange
rates in effect at dates of acquisitions- and after adjustment to increase first mortgage bonds to par.
The portion of the first mortgage bonds of the Canadian subsidiaries due after April 30,1954 are reflected
at their United States dollar equivalents using the
exchange rate in effect at the date the indebtedness
was incurred, but not less than par. The current
assets and liabilities are reflected at the April 30,1953
Note 11—In June 1950, the office building formerly
owned by Whitehall Improvement Corporation was
sold and leased back under a long-term lease agreement. A subsidiary operates the building under a
lease expiring June 11, 2010. The terms of the lease
require the payment, in addition to local taxes assessed against the property, of an annual rental of
$750,000 to December 11, 1961, and $130,000 thereafter. The rental to December 11,1961 is guaranteed
by Sheraton Corporation of America.
Note 12—A contract has been signed for the installation of television equipment, aggregating approximately $1,000,000.