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Hilton Hotels, 1962 Annual Report
Image 35
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Hilton Hotels Corporation. Hilton Hotels, 1962 Annual Report - Image 35. 1962. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. June 4, 2020. https://digital.lib.uh.edu/collection/hiltonar/item/120/show/114.

Disclaimer: This is a general citation for reference purposes. Please consult the most recent edition of your style manual for the proper formatting of the type of source you are citing. If the date given in the citation does not match the date on the digital item, use the more accurate date below the digital item.

Hilton Hotels Corporation. (1962). Hilton Hotels, 1962 Annual Report - Image 35. Annual Reports from the Hospitality Industry Archives. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. Retrieved from https://digital.lib.uh.edu/collection/hiltonar/item/120/show/114

Disclaimer: This is a general citation for reference purposes. Please consult the most recent edition of your style manual for the proper formatting of the type of source you are citing. If the date given in the citation does not match the date on the digital item, use the more accurate date below the digital item.

Hilton Hotels Corporation, Hilton Hotels, 1962 Annual Report - Image 35, 1962, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed June 4, 2020, https://digital.lib.uh.edu/collection/hiltonar/item/120/show/114.

Disclaimer: This is a general citation for reference purposes. Please consult the most recent edition of your style manual for the proper formatting of the type of source you are citing. If the date given in the citation does not match the date on the digital item, use the more accurate date below the digital item.

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Compound Item Description
Title Hilton Hotels, 1962 Annual Report
Creator (LCNAF)
  • Hilton Hotels Corporation
Publisher Hilton Hotels Corporation
Date 1962
Description Hilton Hotels Annual Report for calendar year 1962.
Subject.Topical (LCSH)
  • Hospitality industry
  • Hotel management
  • Corporation reports
Subject.Name (LCNAF)
  • Hilton Hotels Corporation
Genre (AAT)
  • annual reports
  • business records
Language English
Type (DCMI)
  • Text
  • Image
Original Item Location Conrad N. Hilton Papers
Digital Collection Annual Reports from the Hospitality Industry Archives
Digital Collection URL http://digital.lib.uh.edu/collection/hiltonar
Repository Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston
Repository URL http://www.uh.edu/hilton-college/About/hospitality-industry-archives
Use and Reproduction No Copyright - United States
File Name index.cpd
Item Description
Title Image 35
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_015_035.jpg
Transcript The Company has obtained a first mortgage construction loan commitment on The Portland Hilton in the amount of $5,000,000. At December 31, 1962, $890,000. of the funds available under this loan had been drawn down. Guarantees of loans to subsidiaries or 50% owned companies were: First Mortgage loan of $1,960,650. on the Hilton Inn, New Orleans and the first maturing $7,500,000. of a $15,000,000. First Mortgage loan of Hilton-Burns Hotels Company, Inc., which had been paid down to $14,901,791. at December 31, 1962. The Company has agreed to guarantee $2,500,000. of a $10,000,000. loan commitment of the 25% owned Rock-Hil-Uris, Inc. Of the amount so guaranteed by the Company, $150,000. had been drawn down at December 31, 1962. The subsidiary, Hilton Hotels International, Inc. has subscribed and paid for a 50% interest ($375,000) in the share capital of Kahala Hilton Hotel Company, Inc. (Kahala), a hotel under construction. In addition, International has agreed to purchase $1,125,000. of 5% debenture notes of Kahala. In connection with the two hotels in The Netherlands, Hilton Hotels International, Inc. (lessee) subscribed to 1,000,000 guilders in the share capital of each company and made payments amounting in the aggregate to $414,595. The total balance payable under the subscriptions is $138,875. at the current exchange rate. In accordance with lease terms for the London Hilton, International is required to furnish the hotel at an estimated cost of $4,000,000. A loan in the amount of $900,000. maturing November 15, 1966 entered into by lessor companies of the Acapulco Hilton and the Continental Hilton has been guaranteed by International and another person. Securities of two Mexican companies have been pledged to secure the loan. International is also guarantor of a $100,000. obligation of Hilton of Panama, S. A., a wholly-owned subsidiary; $3,500,000. ($3,249,767. U.S.) First Mortgage Bonds of a 50% owned Canadian subsidiary; and $1,000,000. of a $4,000,000. mortgage bond issue of a 50% owned Hawaiian subsidiary. Hilton Hotels (UK), Ltd., a wholly owned subsidiary of Hilton Hotels International, Inc., has arranged to borrow a total of 1,250,000 pounds sterling ($3,500,000) from Lloyds Bank Ltd. in connection with furnishing the London Hilton Hotel. As at December 31, 1962, the sterling equivalent to $250,253.72 had been drawn against the loan agreement by an overdraft. It is indicated that the total borrowings will be evidenced by demand notes of Hilton Hotels (UK), Ltd., endorsed by Hilton Hotels International, Inc., but these documents had not been completed prior to the conclusion of our examination. The Company is contingently liable as guarantor respecting two second mortgage notes aggregating $8,064,929. which were sold as part of the transaction involving the sale and leaseback of the Beverly Hilton Hotel under which sale the Company has the option to repurchase the hotel in 1966 or 1967 at a price of $14,315,050., the original sale price attributable to the land and buildings comprising the hotel. The Company has purchased $700,000. of 6}^% notes, maturing January 1, 1971, of the 50% owned Hilton-Uris, Inc. (hotel under construction) and is committed to purchase an additional $2,300,000. of such notes. An agreement has been made with Rock-Hil-Uris, Inc. (hotel under construction) in which the Company has a $500,000. investment, representing 25% of the capital stock, whereby the Company will purchase up to $3,750,000. principal amount of Series "A" notes of the affiliate and $1,570,000. of such notes had been purchased to December 31, 1962. Both hotels when completed will be operated by Hilton Hotels Corporation under management agreements. Hilton Inns, Inc., a subsidiary, has entered into first mortgage loan contracts under which a group of institutional investors have agreed to lend up to $18,000,000. of which $8,460,000. was drawn down prior to December 31, 1962. The Company has received a $16,000,000. loan commitment in connection with the construction of a Hilton Hotel in San Francisco. No funds have been drawn down under this commitment. In connection with the Hilton Inns mortgage contracts, a plan of recapitalization was adopted by the Board of Directors of the wholly-owned subsidiary, Hilton Inns, Inc., wherein and whereby the subsidiary redeemed 700,000 shares of its common capital stock, $10. par value, from Hilton Hotels Corporation and issued in exchange therefor $7,000,000. principal amount of 5% subordinated notes, Series 1. The subsidiary issued an additional $1,000,000. of 5% subordinated notes, Series 1, together with a $8,580,000. issue of 5% subordinated notes, Series 2, in full satisfaction of its open account indebtedness to the parent. The latter Series 2 notes have been paid down to $1,720,000. at December 31, 1962. Both the Series 1 and Series 2 notes bear a maturity date of October 31, 1984. By mutual agreement between the Company and Hilton Inns, Inc., no interest on these notes was accrued for the year 1962. The Company is obligated to make an additional capital contribution of $225,000. to the partnership in which it now has a majority interest (Hawaiian Village Development Company), and is to further purchase $2,025,000. of subordinated notes of the partnership unless such additional capital contribution and purchase of subordinated notes are made by other persons. Subsequent to the year end, under an offer dated December 17, 1962 which expired January 24, 1963, the Company acquired an additional 300,000 shares of its $2.50 par value common stock for the treasury at a total cost of $8,572,021. The Company's investment in Hilton Credit Corporation at December 31, 1962 consisted of 33.46% of the common stock of that corporation carried at a cost of $1,035,005., and 5% subordinated notes in the face amount of $1,900,000. As of January 15, 1963 the Company offered to purchase up to 1,390,706 shares of Hilton Credit Corporation common stock at a price of $3.25 per share. As of March 1, 1963, 1,042,612 shares were so acquired at a total cost of $3,388,489. As a result, the Company's ownership of Hilton Credit Corporation increased to approximately 68% of that corporation's outstanding common stock. As of December 31, 1962, unaudited financial statements of Hilton Credit Corporation indicated a profit of $799,446. for the eight months then ended and a deficiency of $1,526,844. in total shareholders' equity, of which deficiency, $510,882. was applicable to the Company's 33.46% stock investment interest at that date. At March 1, 1963, such deficiency applicable to the Company's then 68% stock interest amounted to $922,653. (unaudited). The Company and its subsidiaries are engaged in various litigation, but the Company's legal counsel does not anticipate that any amounts that the Company or its subsidiaries may be required to pay by reason thereof will be of material importance. (8) LONG-TERM LEASES The Company and its subsidiaries operate or will operate certain properties under leases ranging from two years and ten months to fifty-two years and three months from December 31, 1962 with options to renew in some instances. The total minimum annual fixed or basic rentals payable (exclusive of real estate taxes, insurance and other occupancy charges) under such leases for each of the next five years ending December 31, follows: 1963, $6,443,361.; 1964, $6,447,111.; 1965, $6,438,778.; 1966, $5,934,611.; and, 1967, $5,934,611. Rental based on a percentage of gross operating profit and other lease obligations of a Canadian subsidiary of Hilton Hotels International, Inc., are guaranteed by both International and by the Company. Under the terms of the Caribe Hilton lease, International and the Company are liable for the tenant's obligations under the lease which, among other things, require payment of a small fixed rental and additional rental based on gross operating profit. International is contingently liable for performance under all other leases entered into by or assigned to its foreign subsidiaries. The Company has not been released from its obligations under a ground lease which was assigned to Hilton Inns, Inc. The subsidiary, International, has negotiated preliminary contracts or agreements for the operation of hotels (certain of which are now under construction), or under consideration, on sites outside the Continental United States, subject to fulfillment of certain conditions and execution of final leases. In general, International or its subsidiaries are required to furnish initial operating inventories and maintain sufficient working capital. Leases basically provide for a rental based on a percentage of gross operating profit. 33