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Sheraton Corporation of America, 1961 Annual Report
Image 25
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Starwood Hotels & Resorts. Sheraton Corporation of America, 1961 Annual Report - Image 25. 1961. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. May 21, 2019. https://digital.lib.uh.edu/collection/hiltonar/item/1325/show/1321.

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 25. 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/1321

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 25, 1961, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed May 21, 2019, https://digital.lib.uh.edu/collection/hiltonar/item/1325/show/1321.

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 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 25
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_023_025.jpg
Transcript NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 23 37,800 for the conversion of the issued 4% Cumulative Convertible Preferred Stock. 200,548 shares for the exercise of warrants sold with the 6% sinking fund Debentures. Each warrant entitles the holder to buy, through October 1, 1964, 1.2 shares of the Corporation's Common Stock ($ .50 Par) for $10, payable in cash or an equivalent face amount of Debentures of the 6% series, without adjustment for dividends or accrued interest. 47,935 shares for the conversion of 4%% sinking fund Debentures, of which 47,595 shares are applicable to Debentures outstanding, and 340 shares are applicable to Debentures held in the Treasury. 357,109 shares for the exercise of the warrants issued with the 5% sinking fund Debentures. Each warrant entitles the holder to buy, through September 1, 1966, 1.2 shares of the Corporation's Common Stock ($ .50 Par) for $25, payable in cash or an equivalent face amount of 5% Debentures, without adjustment for dividends or accrued interest. No fractional shares will be issued as a result of the exercise of warrants or conversion provisions described above, but cash adjustments will be made in lieu thereof. 0 — Earned Surplus The portion of consolidated earned surplus applicable to Canadian subsidiaries is $7,026,496, which is subject to a 15% withholding tax on dividends. In connection with an issue of Debentures in October 1956, payment of dividends by a Canadian subsidiary is restricted to earnings accumulated subsequent to August 31, 1955. The foregoing amount includes approximately $2,495,000 of earnings accumulated to August 31, 1955, which are subject to this restriction. Dividends or other payments of any kind with respect to subordinated debt, capital stock or warrants, other than stock dividends, may be made only out of consolidated net income of Sheraton Corporation of America and Subsidiaries since April 30, 1953, and only if full sinking fund payments have been made to the date of such payments. Accumulated net income available for dividends or such other payments as at April 30, 1961 amounted to $18,740,518. 7— Long-Term Leases As at April 30,1961, Sheraton Corporation of America was obligated as guarantor of a subsidiary office building lease expiring in 2010. As a result of improvements paid for and to be paid for by the lessor, a new estimated rental up to a maximum annual rent of $900,000 will be effective for the period May 1, 1961 to November 30, 1961. Thereafter, when the improvements are completed and paid for, the annual rent will be approximately $420,000 until December 1981, at which date the rent will be $195,000. The revised rental will be guaranteed in full until a rate of tenant occupancy of 92% has been achieved, after which the guarantee is limited to payment of no more than $1,000,000, reducing $100,000 a year to a minimum of $100,000. Performance by subsidiaries of the terms of the leases of two hotels (including rent of approximately $1,210,000 per year) is guaranteed by the Corporation for the first ten years of the leases. One of the leases is guaranteed for an additional period of fifteen years (annual rent approximately $306,000). Agreements have been made for the lease of hotels by subsidiaries of the Corporation, effective when construction is completed. The performance by subsidiaries of the terms of the leases is guaranteed in part by the Corporation. 8 — Commitments and Contingent Liabilities The Corporation is liable as guarantor of certain notes and mortgages payable of subsidiaries. All of these obligations are included as liabilities in the consolidated balance sheet. The Corporation is contingently liable as guarantor of a First Mortgage payable by a non-affiliated company secured by real estate formerly owned by a subsidiary. The real estate was sold in December 1955 for $3,600,000. The terms of the mortgage require equal quarterly payments of $26,562, applicable first to interest at 5% per annum and the balance to principal. As at April 30, 1961, the unpaid principal balance was $960,623. The guarantee of the Corporation remains in effect until the principal balance is reduced to $750,000. On June 14, 1955, the Corporation executed an Agreement and Declaration of Trust, creating the Sheraton Employees Savings Plan. Upon voluntary or involuntary withdrawal, an employee is entitled to receive, as a minimum, his contribution plus interest at 3% per annum. The Corporation is obligated to pay any deficiency which may exist in the Trust in computing this amount. Contracts have been entered into with respect to major construction projects for construction in progress amounting to approximately $8,300,000, in addition to liabilities already recorded on such contracts. 9 — Pensions and Savings The parent company has established a voluntary non-contributory Pension Plan and Trust covering all parent company employees and employees of certain subsidiaries in the United States who have completed two years of continuous service, have attained age 30 and have not reached age 65. The required contributions to the Pension Trust applicable to the year ended April 30, 1961 were $202,199, representing the annual cost of the Pension Plan for that period (inclusive of cost to two subsidiaries) as estimated by the actuaries. The foregoing amount represents the annual level cost of the Plan, based upon the funding of past and future service together, exclusive of expenses of administering the Plan. Effective May 1, 1958, a subsidiary established a trusteed non- contributory Pension Plan covering all its eligible employees. The estimated annual cost of the Plan is approximately $246,037, of which $13,492 was applicable to past service benefits based on amortizing the cost over a thirty-year period. The unfunded cost of past service benefits was approximately $1,703,838 at April 30, 1961. The Corporation and substantially all of its United States subsidiaries inaugurated an Employees Savings Plan, the details of which are set forth in an Agreement and Declaration of Trust dated June 14, 1955. The Plan provides that the employing companies will match, to not more than 25%, contributions made by employees to not more than 6% of their pay. The total expense to the companies for the year was $63,129. IO— Amortization of Debt Discount and Expense The debt discount and expense, incurred in connection with the 6%, 434% and 5% Debentures, is being amortized over the lives of the respective issues, giving effect to reductions in outstanding Debentures. Similar expense, applicable to the 61/2% and 1Vi% Debentures and other debt, is being amortized uniformly on a straight line basis over the various periods of time from the respective inceptions of the debts to their respective maturities. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders, Sheraton Corporation of America, Boston, Massachusetts We have examined the accompanying consolidated balance sheet of Sheraton Corporation of America and its subsidiaries as at April 30,1961 and the related consolidated surplus and income statements for the year then ended. These consolidated statements have been prepared from financial statements of Sheraton Corporation of America and Subsidiaries which have been audited by us or by other independent accountants who have submitted to us their certificates concerning the underlying statements which were examined by them. The results of the operations of the companies purchased, sold or liquidated are included in the surplus and income statements for the periods during which they were majority owned. Our examinations of the statements, of Sheraton Corporation of America and of those subsidiaries which were examined by us were made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. We had made similar examinations for the year ended April 30, 1960. On the basis of the foregoing explanations, in our opinion, the accompanying consolidated balance sheet, the related consolidated statements of surplus and income, and the explanatory notations fairly present the financial condition of Sheraton Corporation of America and Subsidiaries as at April 30, 1961 and the results of their transactions for the years ended April 30, 1961 and 1960, in conformity with generally accepted principles of accounting applied on a basis consistent with that of the preceding year. HARRIS, KERR, FORSTER & COMPANY Boston, Massachusetts, July 28,1961