University of Houston, 4333 University Drive, Houston TX 77204-2000, (713) 743-1050.
© 2013 University of Houston. All rights reserved.
| Title | Sheraton Corporation of America, 1961 Annual Report |
| Creator (LCNAF) |
|
| Publisher | Starwood Hotels & Resorts |
| Date | 1961 |
| Description | Sheraton Corporation of America Annual Report for the year ending on April 30, 1961. |
| Subject.Topical (LCSH) |
|
| Subject.Name (LCNAF) |
|
| Genre (AAT) |
|
| Language | English |
| Type (DCMI) |
|
| 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 |
| Title | Image 10 |
| Format (IMT) |
|
| File Name | hiltonar_201609_023_010.jpg |
| Transcript | • • amortization of debt to the extent it may not be replaced by new financing. However, the value of depreciation reserves reinvested in the business does furnish a possible clue to the interesting past growth record of the Company. It does explain our emphasis on cash flow, as well as certain advantages of owning rather than leasing hotels. Cash Flow and Net Asset Values versus "Reported Earnings" Some shareholders may be unaware of the relative impact of cash flow and indicated net asset values on the one hand, and reported earnings, on the market performance of Sheraton shares. Sheraton shares seem to follow the former fairly closely, and appear to be influenced relatively little by the latter. Looking back over a ten-year period we find year-end quotations of Sheraton shares on the New York Stock Exchange were $3.04 a share in 1951 (corrected for stock splits, etc.) as against $17.75 in 1961. The rise was 5J/£-fold. During this same period estimated net asset value and cash flow increased approximately three-fold. However, this was in the face of a thirty per cent decline in reported earnings (with a similar drop in income taxes) during this same period. It would appear from this ten-year record that net asset values and cash flow rather than "reported earnings" are the principal influence affecting Sheraton market performance. Reported earnings are perhaps too closely related to such matters as maintenance expenditures, and to Company policy with respect to depreciation. Sheraton depreciation reserves in 1947 were 2.3 per cent of total assets at estimated value, and 5.2 per cent of total sales. By 1961, these percentages had risen to 4.5 and 8.8 respectively, advances of about 100 and 69 per cent in the rate at which depreciation reserves were being set up. Taking an average increase in depreciation in relation to the growth of the Company, means that currently, in relation to our practice fourteen years ago (representing period covered by table page 4), our depreciation reserves were relatively higher by over $7,000,000. This is equivalent to over $1.33 a share on Sheraton stock for the year just ended. Actually, on account of the improved physical condition of our hotels today, and due to the higher proportion of new buildings in the system, it would appear that perhaps a lower rather than a higher rate of depreciation might be more appropriate for 1961. Growth in hotel guest rooms 28 26 24 22 20 " 18 c m 3 » x: c 14 12 10 8 6 4 19 47 19 49 19 51 19 53 19 55 19 57 19 59 19( |