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Hilton Hotels, 1959 Annual Report
Image 30
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Hilton Hotels Corporation. Hilton Hotels, 1959 Annual Report - Image 30. 1959. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. July 3, 2020. https://digital.lib.uh.edu/collection/hiltonar/item/1208/show/1201.

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. (1959). Hilton Hotels, 1959 Annual Report - Image 30. 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/1208/show/1201

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, 1959 Annual Report - Image 30, 1959, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed July 3, 2020, https://digital.lib.uh.edu/collection/hiltonar/item/1208/show/1201.

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, 1959 Annual Report
Creator (LCNAF)
  • Hilton Hotels Corporation
Publisher Hilton Hotels Corporation
Date 1959
Description Hilton Hotels Annual Report for calendar year 1959.
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 30
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_012_030.jpg
Transcript Notes to Financial Statements 1—BASIS OF CONSOLIDATION The consolidated statements include all subsidiaries with the exception that the wholly-owned subsidiary, Hilton Hotels International, Inc., included in consolidation, adopted the policy, beginning January l, 1959, of excluding from its consolidation the operation of certain foreign subsidiaries and divisions (formerly included in consolidation), due either to unstable political situations or to currency restrictions or both. The operations now excluded are those in Berlin, Germany; Madrid, Spain; Havana, Cuba; Istanbul, Turkey and Cairo, Egypt. These operations are now carried as investments and income therefrom will be included in consolidation when received. Investments in and advances to non-consolidated foreign subsidiaries and divisions of $2,720,794 at December 31, 1959 exceeded the Company's equity in the net assets of such subsidiaries and divisions by approximately $1,340,000. In the opinion of management, there has been no permanent impairment in the value of the investments in foreign companies and divisions, and consequently, no provision has been made for possible losses. Consolidated earned surplus at December 31, 1959 included $8,488,129, representing the combined undistributed net earnings of consolidated subsidiaries. 2—INVESTMENTS Installment sales contract and other notes received in connection with sales of various properties since 1952 were, with the exception of a $128,943 promissory note at December 31, 1959, secured by either first, second, chattel or real estate leasehold mortgages. These notes require various periodic payments and their maturities range from March 1, 1960 to July 1, 1976. The required payments receivable for the next five years approximate $3,718,388, 1960; $2,464,449, 1961; $1,271,386, 1962; $1,730,615, 1963; and $1,088,146, 1964. It is the policy to defer the profit on those sales that qualify as installment sales under Treasury regulations, taking into income that portion of the profit as applies to payments on the installment sales contract in the year in which such payments are received. At December 31, 1959, $13,207,904 of such profit was deferred, and accordingly, during the next five years as the aforementioned payments are received, there will be included in income (taxable at the then effective long-term capital gains rate) the following: $2,322,486, 1960; $1,633,618, 1961; $1,023,722, 1962; $1,506,421, 1963; and $865,774, 1964. On March 1, 1958 the Company entered into a 5%, $13,000,000 bank loan agreement maturing April 2, 1963 with right to extend maturity to October 1, 1963. Payments against this loan (which was reduced to $3,490,239 at December 31, 1959) are to equal payments received from installment sales contracts and other notes which were deposited with the lender for purposes of collection and application of the proceeds from such notes under the terms of the loan agreement. 3—FIXED ASSETS A major portion of these assets are pledged to secure mortgages or other long-term debt of the consolidated companies. Furniture, furnishings and equipment owned by the Company in "Statler Hilton Hotels" under lease from an affiliate, Statler Hotels Delaware Corporation, are pledged as additional security under a mortgage of that company. Fixed assets were carried at cost, or were carried over from predecessor companies together with related depreciation reserves at predecessors' basis, plus additions at cost. With one minor exception, depreciation of fixed assets has been computed on the basis of the straight-line method. 4—FEDERAL TAXES ON INCOME Federal income tax returns of the Company have been examined and settled through the year 1953. Returns of the Company subsequent to 1953 and returns of subsidiaries and predecessor companies for 1954 and subsequent years are either under or subject to examination. 5—LONG-TERM DEBT The trust indenture securing the 4V2% fifteen-year convertible debentures of the Company (conversion privileges expired January 2, 1958) requires annual sinking fund payments on January 15 of each year in an amount sufficient to redeem at the principal amount without premium, 3% for each of the years through 1962 and 4% for each of the years thereafter. The Company has complied with this provision. The Company's 6% subordinated sinking fund debentures, with warrants attached, are entitled to the benefit of an annual sinking fund commencing October 15, 1965. The Company is obligated to pay into the sinking fund on or before October 15 in each year from 1965 to 1969, a sum equal to 2% of the largest principal amount of debentures outstanding on or prior to August 31, 1965, and thereafter annually, an amount equal to 1/15th of the principal amount of debentures outstanding on October 15, 1969 after giving effect to redemptions out of the sinking fund payment made for that date. The 4% twenty-five year sinking fund debentures of a subsidiary are entitled to the benefit of an annual sinking fund, beginning July 1, 1962, in an amount sufficient to redeem, at their principal amount without premium, in each year, 2% of the highest principal amount at any time outstanding. The aggregate annual sinking fund and maturity requirements on the total long-term debt at December 31,1959 for each of the next five years ending December 31, follows: 1960, $8,235,085; 1961, $3,912,128; 1962, $2,171,157; 1963, $2,779,644; and 1964, $2,900,479. 6—CAPITAL STOCK The 5% cumulative first preferred Series "A" shares are subject to redemption, without premium, out of sinking fund payments, made on or before January 1st in each year in an amount sufficient to redeem 2% of the maximum number of shares theretofore issued and outstanding. The Company has complied with this sinking fund provision. The 5J/2% Series "A" preferred shares were issued in connection with an exchange of shares with stockholders of Savoy-Plaza, Inc., which company was merged into Hilton Hotels Corporation on December 31, 1958. These shares will be convertible at the option of the holders, at any time after January 1, 1960, into common stock of the Company at a conversion price of $35.50 per share (170,865 common shares of the Company have been reserved for this purpose), and, at the option of the Company, such Series "A" shares will be redeemable at $26.25 plus accrued dividends on and after January 1, 1961 to the date fixed for redemption. 450,000 shares of common stock of the Company have been reserved for the exercise of warrants attached to the $30,000,000 issue in 1959 of 6% subordinated sinking fund debentures of the Company. Each $1,000 debenture unit carried a warrant to purchase 15 shares of common stock. The warrants provide that this stock may be purchased at $42 per share until October 15, 1963; $46 per share thereafter to October 15, 1967; and, $50 per share thereafter to October 15, 1971, the expiration date of the warrants. 28