Hotel operations only for the three years 1948,
1947 and 1946 are shown on the chart following:
MAYFLOWER HOTEL CORPORATION
Your corporation purchased 3,052 additional
shares of common capital stock of Mayflower
Hotel Corporation, Washington, D. C, during
the past year, and on December 31,1948, owned
270,992 shares, or 69.53% of the total stock outstanding. A dividend of $81,297.60 was received
from the Mayflower Hotel Corporation amounting to 5 cents per share on the common stock
of your corporation.
A suit was filed in the Federal District Court
of Washington, D. C, against your corporation,
certain of its officers, directors and others, by
minority stockholders of the Mayflower seeking
to set the stock purchase and the management
contract aside. This court has ruled twice that
the complaint as filed and as amended did not
state a cause of action and dismissed it. On
appeal, the Circuit Court of Appeals ruled on
January 10, 1949 that the dismissal should be
reversed and the case tried on its merits by the
District court. A petition for rehearing has been
filed but had not yet been acted upon when this
report went to press.
HILTON HOTELS INTERNATIONAL, INC.
Hilton Hotels International, Inc., wholly-
owned subsidiary, has had no income since its
organization in April 1948. Its operating expenses were $26,563.16, most of which was expended in the exploration of the many projects
which have been offered the company, in the
management of the Bermuda properties, and in
the further development of plans for the operation of the Caribe-Hilton in San Juan, Puerto
Rico. The personnel of the company have investigated many projects, none of which have yet
The Caribe-Hilton, now being built by the
Puerto Rico Industrial Development Company
in San Juan, Puerto Rico, to be operated under
lease, is progressing satisfactorily and should
be ready for occupancy in the latter part of 1949.
The corporation's contract to supervise management of the Mayflower Hotel, Washington,
D. C, is still in effect. The corporation also
has contracts to supervise management of the
Roosevelt Hotel, New York, New York, and the
Palacio Hilton, Chihuahua, Mexico. Contract
to supervise the management of the Bermuda
properties was transferred to Hilton Hotels
International in July, as noted elsewhere.
Regular quarterly dividends of 50 cents a
share were paid on the convertible preference
stock in 1948. These payments were made on
March 1st, June 1st, September 1st and December 1st. Common dividend payments of 25
cents per share were also made at quarterly
intervals on the same dates. The total dividend
distribution of $1,888,153 represented 48% of
the net profit during the year. This compared
with a distribution in 1947 of $2,039,198, representing 37% of the net profit for that year. During 1948 $2,029,652, or 52% of the net profit, was
reinvested in the business, the equivalent of
$1.28 per share.
Our total secured debt is now represented by
the following mortgages:
Palmer House $15,680,000.00
Total 1948 interest charges were $810,703.
Total principal payments were $514,362.61.
During the past year your corporation received a total of $1,135,601 from store and lobby
rentals, of which amount the Palmer House produced $979,431. Significantly, this amount is
sufficient to service the interest and principal
requirements of the Palmer House mortgage.
°The complete ownership of the Palm Beach Biltmore Hotel was
acquired subject to mortgage indebtedness of $975,000. Since
this property was sold early in 1949 (see Acquisitions and Sales),
the total secured debt excludes the mortgage indebtedness of
the Palm Beach Biltmore Hotel.