Keyword
in
Collection
Date
to
Sheraton Corporation of America, 1961 Annual Report
Image 9
Citation
MLA
APA
Chicago/Turabian
Starwood Hotels & Resorts. Sheraton Corporation of America, 1961 Annual Report - Image 9. 1961. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. September 17, 2019. https://digital.lib.uh.edu/collection/hiltonar/item/1325/show/1305.

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.

Starwood Hotels & Resorts. (1961). Sheraton Corporation of America, 1961 Annual Report - Image 9. 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/1325/show/1305

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.

Starwood Hotels & Resorts, Sheraton Corporation of America, 1961 Annual Report - Image 9, 1961, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed September 17, 2019, https://digital.lib.uh.edu/collection/hiltonar/item/1325/show/1305.

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.

URL
Embed Image
Compound Item Description
Title Sheraton Corporation of America, 1961 Annual Report
Creator (LCNAF)
  • Starwood Hotels & Resorts
Publisher Starwood Hotels & Resorts
Date 1961
Description Sheraton Corporation of America Annual Report for the year ending on April 30, 1961.
Subject.Topical (LCSH)
  • Hospitality industry
  • Hotel management
  • Corporation reports
Subject.Name (LCNAF)
  • Starwood Hotels & Resorts
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 9
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_023_009.jpg
Transcript • basic earnings during the current 1962 fiscal year approximately $ 1,500,000. The "Belt-Tightening" program referred to above should, we believe, more than compensate for any presently unforeseen contingencies. Recovery from the recent recession, and anticipated improved earnings from the Penn-Sheraton and Thompson Industries, Inc. should also contribute to a favorable trend in fiscal 1962. Ackn o wledgm ent We would like to take this opportunity, as we have done on many previous occasions, to thank the 22,000 employees of Sheraton for their material contribution to the Company's performance in this and past years. May we also acknowledge with appreciation the support being received in many ways from 18,000 Sheraton shareholders. To all we are glad to report our expectation that the present new fiscal year will be one of substantial further progress. Cnxc^S(^a>-« FURTHER COMMENT An Interesting Look at Depreciation A new ten million dollar building, normally assigned a 50-year life, would require — if straight line depreciation of 2% a year were used — $200,000 each year for depreciation. In fifty years the building, having then presumably reached the end of its economic life, could in theory be replaced by funded reserves which would amount to the ten million dollars originally invested in the building. However, the money set aside does not in practice he idle. If reinvested at 4% after income taxes compounded annually for fifty years, these cash reserves, instead of the original $10,000,000, could aggregate $30,533,000, a very generous sum even after taking into account increased reproduction costs expected in an inflationary economy. Assuming the depreciation reserves are earned, as they have been in Sheraton's past twenty-four years' experience, and that these reserves are not required for debt amortization (on the theory that when property values are maintained, debt amortization is customarily replaced with new debt), and assuming that the annual depreciation reserves can continue to be readily invested and reinvested profitably during the fifty-year life of a new property at a rate better than 10% annually, — then the cash ultimately realized from these reserves would amount to more than $232,781,000. At a 15% rate, which corresponds more closely to Sheraton's past twenty-four-year actual experience, the amount becomes much larger, taxing the capacity of Company calculating machines. Utilizing one of several available forms of accelerated depreciation calling for larger reserves in earlier years, makes the figures resulting from this compounding process even more impressive. As a further illustration, consider only the first year's depreciation reserves of approximately $800,000 actually taken on an accelerated basis on the new Philadelphia Sheraton (building only) in the year 1958. If this sum were invested in the business, at a rate of only 10% after taxes compounded annually for fifty years, without the benefit of setting aside any additional depreciation reserves during the remaining forty-nine year life of the building, then the principal and interest accumulated in fifty years would amount to $93,912,000. This alone would be six times the amount required. If providing funds for replacing the building fifty years later was the primary objective for setting up depreciation reserves, the amount of $133,000 set aside once for the first year only, would have been, if compounded annually, sufficient to attain this objective in fifty years. This amount of $133,000 would be less than a single year's depreciation allowance called for when using the straight line depreciation method. The effective reinvestment of depreciation reserves account in a large measure for the rise of Sheraton's total assets during the twenty-four years that the Company has operated hotels and other real estate. The reinvestment of these reserves and consequent increase in asset value has broadened the credit base of the Company permitting further growth through debt financing up to the Company's stated objective of approximately 50% of total assets at estimated values, less current liabilities. The Officers of the Company believe that this program has been primarily responsible for the increase in total assets during this period from less than $1,000,000 to more than $400,000,000 at estimated values. The picture, of course, is not always as rosy as suggested by these illustrations. They do not tell the complete story. In practice a portion of the depreciation reserves may be necessary for