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Sheraton Corporation of America, 1957 Annual Report
Image 25
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Starwood Hotels & Resorts. Sheraton Corporation of America, 1957 Annual Report - Image 25. 1957. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. November 20, 2019. https://digital.lib.uh.edu/collection/hiltonar/item/1659/show/1655.

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. (1957). Sheraton Corporation of America, 1957 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/1659/show/1655

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, 1957 Annual Report - Image 25, 1957, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed November 20, 2019, https://digital.lib.uh.edu/collection/hiltonar/item/1659/show/1655.

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, 1957 Annual Report
Creator (LCNAF)
  • Starwood Hotels & Resorts
Publisher Starwood Hotels & Resorts
Date 1957
Description Sheraton Corporation of America Annual Report for the year ending on April 30, 1957.
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_021_025.jpg
Transcript NOTES TO CONSOLIDATED HH For the Year Ended NOTE 1 — The consolidated financial statements include figures of the Corporation and its 50% or more owned domestic and Canadian subsidiaries, except two domestic subsidiaries also excluded in prior years. These subsidiaries act as transfer agent and purchasing agent of the Corporation and most of the subsidiaries. The equity of the subsidiaries excluded from the financial statements, based on audited financial statements, was $166,250 more than the cost of these investments. The equity in the net income of these companies for the year ended April 30, 1957 was $56,200. No dividends were received from these subsidiaries during the year, but $5,550 is included in Profit from Security Transactions for its own shares sold to one subsidiary. NOTE 2 —These statements do not reflect $1,505,068 of net unrealized gain on securities and mortgages owned. NOTE 3 — The book values of investment securities have been stated on the basis of Court values if such determination was made, market values at April 30, 1946 for securities then owned by subsidiaries, market values at May 16, 1946 for securities then owned by Sheraton Corporation or United States Realty and Improvement Company, and cost for securities purchased since May 16, 1946. Investments are pledged to secure notes, contracts and mortgages payable as follows: Securities of Subsidiaries — Eliminated in Consolidation — book value $10,532,117 Mortgages Receivable (Estimated Value $5,450,998) — book value 5,118,004 NOTE 4 — Substantially all of the real estate and furniture and equipment are pledged to secure mortgages or other long-term debt. The fixed assets have not been stated at the net values as shown by the books of the respective companies but at net values after depreciation, computed on the following bases: (1) values determined by the District Court of the United States for the Southern District of New York in connection with the reorganization of United States Realty and Improvement Company if such determination was made, (2) values determined by officers of Sheraton Corporation for properties owned at April 30, 1946 for which the Court did not make a determination, (3) cost for all assets acquired since that date, with the inclusion therein of the excess of the cost of investments made in subsidiaries' securities over the equity acquired by such investments, as shown by the books of the subsidiaries at the dates of such acquisitions. NOTE 5 —The securities of 12 of the consolidated subsidiaries of Sheraton Corporation of America were acquired at costs which were less than the book values of the equities thus- acquired. That difference is shown in the balance sheet as Surplus from Consolidation. The securities of 10 of the consolidated subsidiaries were acquired at more than the book values of the equities thus acquired. That difference has been treated in these statements as follows: As additional cost of fixed assets still owned, allocated on a pro rata basis, $905,138 to land and leaseholds and $2,010,005 to buildings. As goodwill from consolidation, the unamortized portion of which, $111,406, is included in Other Assets. NOTE 6 — A deposit was made in connection with an option to buy an office building adjacent to an hotel. Total purchase price is $387,500 and the balance of $300,000 may be paid by a 4Vk% mortgage, principal payable in monthly installments of $2,500 for 10 years. NOTE 7 — The Contract Receivable — Officer represents the unpaid balance of a contract to purchase 10,000 shares of the Corporation's common stock. These shares are held by the Corporation as collateral. The portion of the required monthly payments applicable to principal, -due within one year, $5,622, is . included in Current Assets. NOTE 8 — Mortgages and Bonds Payable include Debentures of the Corporation as follows: 6% Debentures, due April 1, 1979 $2,676,800 454% Convertible Debentures, due March 1, 1967 1,946,000 5% Debentures, due March 1, 1967 6,868,500 &i/k% Income Subordinated Debentures, due January I, 1981 Issued 8,697,000 Subscribed 83,300 The latter issue listed above is being offered for sale and its total original authorization was $15,000,000. The Trust Indentures and supplements thereto require annual sinking fund payments as follows: 6% Debentures, due April 1, 1979 $130,952 on April 1 of each year in cash or in Debentures at their face value. The redemption price for sinking fund reduces from 101V$ through September 30, 1959 to par at September 30, 1969. The payment required on April 1, 1957 was paid in full. Debentures in the Treasury at April 30, 1957 aggregated $39,000. 434% and 5% Debentures, due March 1, 1967 The requirements for these two issues of Debentures is the same in total as originally in effect for the 434% Debentures. The amount to be redeemed annually is allocated to the two issues on the basis of the respective principal amounts outstanding at the close of business on January 15 of each year. $150,000 principal amount of Debentures on March 1 for each of the years 1958 through 1960. For each subsequent year, not more than $658,000 and not less than $250,000 principal amount of Debentures. The redemption price for sinking fund reduces from 101 through March 1, 1960 to par at March 1, 1963. At the election of the Company, the sinking fund call on March 1, 1957 was increased from $150,000 to $300,000. Debentures in the Treasury at April 30, 1957 aggregated $582,000. 61^% Debentures, due January 1, 1981 3% of the principal amount of the Debentures outstanding on the previous January 1. The redemption price for sinking fund reduces Vs of 1% annually from 101 through January 1, 1973 to par at January 1, 1981. Debentures in the Treasury at April 30, 1957 aggregated $77,200. The 454% Debentures are convertible until redemption or maturity date as follows: First Conversion Option —each $1,000 principal amount is convertible as to $500 into 32,4 shares of Common Stock and as to the other $500 into a Debenture for that amount. Second Conversion Option — each $500 principal amount of Debentures STATEMENTS FINANCI^ April 30r 1957 W received under the first conversion option is convertible into 16.2 shares of Common Stock. The number of shares into which the Debentures are convertible are to be adjusted in certain events, including split-ups, reclassifications and certain stock dividends. Pursuant to an Offer of Exchange dated September 1, 1956, 454% Debentures are exchangeable for like principal amounts of newly authorized 5% Debentures, due March 1, 1967, on the following basis: each $1,000 principal amount of 454% Debentures containing the first and second conversion options is exchangeable for a like principal amount of 5% Debentures bearing 40 warrants expiring September 1, 1966; each $500 principal amount of 454% Debentures containing the second conversion option only is exchangeable for a like principal amount of 5% Debentures bearing 13 warrants. After November 15, 1956, this Offer may be withdrawn by the Company at any time. The 454% Debentures received in exchange will be cancelled. No 5% Debentures may be issued except in exchange for 434% Debentures. NOTE 9 — This amount includes Federal and State Taxes applicable to gains on sales of real estate and securities. These gains will be reported for taxation as principal payments are received on notes and on second mortgages held on the properties sold. NOTE 10 — Of the total common shares shown as issued and issuable, 10,591 shares are issuable upon surrender of old shares of United States Realty and Improvement Company and shares of Sheraton Corporation and its predecessor corporations. Of the total common shares shown as authorized, shares are reserved as follows: 306,582 shares for the exercise of warrants sold with the 6% sinking fund Debentures. Each warrant entitles the holder to buy, through October 1, 1964, 1 2/10 shares of the Company's common stock ($ .50 par) for $10, payable in cash or an equivalent face amount of Debentures of the 6% series, without adjustments for dividends or accrued interest. 100,698 shares for the conversion of 454% sinking fund Debentures, of which 94,575 shares are applicable to Debentures outstanding, and 6,123 shares are applicable to Debentures held in the Treasury. 331,549 shares for the exercise of the warrants issued with the 5% sinking fund Debentures, of which 329,629 shares are applicable to Debentures outstanding, and 1,920 shares are applicable to Debentures held in the Treasury. Each warrant entitles the holder to buy, through September 1, 1966, 1 2/10 shares of the Company's common stock ($ .50 par) for $25, payable in cash or an equivalent face amount of 5% Debentures, without adjustment for dividends or accrued interest. If the 454% Debentures were to be exchanged in entirety for 5% Debentures, the shares described above as reserved for conversion of the 454% would be eliminated, and the shares described above as reserved for the exercise of warrants issued with the 5% Debentures would be increased by 99,456 shares, of which amount 93,408 shares are applicable to Debentures outstanding, and 6,048 shares are applicable to Debentures held in the Treasury. NOTE 11 — The portion of consolidated earned surplus applicable to Canadian Subsidiaries is $3,756,639, which is subject to a 5% withholding tax on dividends. In connection with an issue of Debentures in October 1956, payment of dividends by Sheraton Limited 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. NOTE 12 — 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, 1957 amounted to $16,596,915. NOTE 13 —In June 1950, the office building formerly owned by Whitehall Improvement Corporation was sold and leased back by a subsidiary under a long-term lease.agreement. This subsidiary operates the building under a lease expiring June 11, 2010. The terms of the lease require the payment, in addition to local taxes assessed against the property, of an annual rental of $750,000 to December 11, 1961, and $130,000 thereafter. The rental to December 11, 1961 is guaranteed by Sheraton Corporation of America, but such guarantee in total is limited to $400,000 at April 30, 1957. The guarantee reduces $100,000 annually. The Corporation is contingently liable as guarantor of the obligations of a former subsidiary (sold March 30, 1956) on non-interest bearing notes in the aggregate amount of $2,261,391, payable in four equal annual installments of $565,347 each on June 15, 1957 and annually thereafter. The payments due through June 15, 1957 were made by the purchaser. The obligations of the former subsidiary are secured by pledge of securities owned by that company acquired in 1955 at a total cost of $3,559,664. The Corporation is also liable as guarantor of certain notes and mortgages payable of subsidiaries. All of these obligations are included as liabilities in the consolidated balance sheet. 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. On June 14, 1955, the Corporation executed an Agreement and Declaration of Trust creating 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. NOTE 14 — The included subsidiaries audited by independent accountants other than Harris, Kerr, Forster & Company are all of the Canadian subsidiaries, Thompson Industries, Inc. and Subsidiary, Sheraton -French Lick Corporation and Sheraton Mayflower Corporation. NOTE 15 — The properties of Canadian subsidiaries are included at Canadian dollar cost after adjustment to United States dollar equivalents reflecting exchange rates in effect at dates of acquisitions and after adjustment to increase first mortgage bonds to par. The portion of the first mortgage bonds of the Canadian subsidiaries due after April 30, 1958 are reflected at their United States dollar equivalents, using the exchange rate in effect at the date the indebtedness was incurred, but not less than par. The current assets and liabilities are reflected at the April 30, 1957 exchange rate.