December 31, 1962. The Corporation issued 52,115
shares in connection with the merger of Statler
Hotels Delaware Corporation into Hilton Hotels.
Conversions of 731 shares of 5H% Preferred Stock
at the conversion ratio of 1.42 shares of preferred for
each share of common stock increased common
shares outstanding by 509. As aforementioned, the
remaining shares of both issues of preferred stock
have been retired.
Subsequent to the year end, Hilton Hotels reduced
the number of common shares outstanding by
acquiring 300,000 shares for the treasury. On
December 17, 1962, the Corporation offered to all
shareholders the right to tender a maximum of
300,000 shares at not to exceed $29.50 per share.
The offer expired on January 24, 1963.
Earned surplus at year end amounted to
$75,823,541, compared with $65,229,134 at December 31, 1961. The net book value per common share
was $30.28 at year end, compared with $27.66 at
December 31,1961. Book value reflects the historical
cost basis to the Corporation of its assets less accumulated depreciation. As evidenced by the capital
gains which have resulted from recent property sales,
real estate values have increased substantially since
the Corporation was formed in 1946. Thus the book
values are undoubtedly understated in relation to
present market values of the Corporation's assets.
Hilton common stock was well represented in the
portfolios of institutional investors at the year end.
Approximately 340,000 shares or nearly nine per
cent of the total shares outstanding were held by
investment trusts, banks, pension funds and other
institutions. Institutions also held over ten per cent
of Hilton 6% subordinated debentures due in 1984.
At December 31, 1962, the Corporation had
approximately 12,000 shareholders, compared with
9,500 shareholders one year earlier.
Working capital at December 31 last amounted to
$27,280,816, or $7.10 per share of common stock.
The ratio of current assets to current liabilities was
1.84 to 1. Working capital was $20,321,641 and the
current ratio was 1.68 to 1 at the close of 1961. Cash
and short-term commercial notes included in the
current assets at December 31, 1962 amounted to
$38,335,197 compared with $27,975,218 a
In June, 1962, working capital was increased by
the receipt of $24.4 million in cash from the sale of
The Savoy Hilton. The Corporation is continuing
management of the hotel under a five-year contract.
In 1962, the Beverly Hilton garage was sold and
leased back to the same group of private investors
who own The Beverly Hilton. The proceeds from
this sale amounted to approximately $900,000. The
Corporation has the option of repurchasing the
garage at the sale price in either 1966 or 1967, to
conform to like options on the hotel. In December,
$14,000,000 was received from the sale of the Palmer
House land. The land was leased back for 30 years
with rights to renew for 60 additional years.
Fixed assets at year end amounted to $197,208,358.
Of the 47 operating hotel and inn properties, the
Corporation owned both the land and buildings of
12 properties with a book value of $113,972,027;
owned the buildings but leased the land of 10 properties with a value of $45,037,443; had leasehold
interests in 17 properties with a value of $14,616,358;
and had fixed assets in five non-consolidated properties of $122,473. Three properties were operated
under management contracts. The Corporation also
has fixed assets in the amount of $16,063,621 representing Hilton Hotels under construction, and other
fixed assets, largely consisting of various parcels of
land, totaling $7,518,909.
As a result of the merger of Statler Hotels Delaware
Corporation into Hilton Hotels Corporation, the
Corporation acquired ownership of the fees and
leaseholds comprising the ten Statler Hilton Hotels.
Since 1954 these properties had been leased from
Statler Hotels Delaware Corporation. In December,
1961, an offer was made to all stockholders of Statler
Hotels Delaware Corporation to purchase their stock
at $6.00 per share. The Corporation acquired
1,504,472 shares or 83 per cent of the outstanding
Statler stock, at a cost of $9,055,236. Shareholders
of both corporations approved a merger agreement
at special meetings on July 13. The Statler stockholders, other than Hilton Hotels Corporation, were
offered one share of Hilton common stock in exchange for each five shares of Statler common.
In April, 1962, Hilton purchased the land and
buildings comprising the Atlanta Hilton Inn for
$3,100,000. Of the purchase price, $1,500,000 was
represented by a first mortgage. This property had
been previously operated under a lease.