AMERICA AND SUBSIDIARIES
Notes to Financial Statements
For the Year ended April 30,1952
Note 1—These statements do not reflect $282,337 of
net unrealized gain on investments and mortgages
Note 2—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.
Securities with a book value of $7,996,509, which
are eliminated in consolidation, are pledged to
secure notes payable. 18,000 shares of preferred
stock in the treasury, purchased at a cost of $450,000,
are pledged to secure contracts payable.
Note 3—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 4—The company is obligated to make available
funds, not exceeding $90,000, to defray expenses of
litigation in connection with certain claims which
may be asserted by the Trustee of United States
Realty and Improvement Company in addition to
$10,000 heretofore paid.
Note 5—All of the preferred stock outstanding in the
hands of the public was called for redemption April
Note 6—Of the total common shares shown as issued
and issuable, 9,586 shares are issuable upon surrender
of old shares of United States Realty and Improvement Company and shares of Sheraton Corporation
and its predecessor corporations.
Note 7—The securities of 24 of the consolidated subsidiaries of Sheraton Corporation of America were acquired at costs which were in total $4,750,368 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 7 of the
consolidated subsidiaries were acquired at $3,473,202
more than the book values of the equities thus acquired. That difference has been treated in these
statements as additional cost of fixed assets and
allocated on a pro-rata basis, $1,254,523 to land and
leaseholds, and $2,218,679 to buildings. Depreciation
of buildings and amortization of leaseholds is accordingly stated herein at $73,545 more than is shown by
the subsidiaries. •
Note 8—With the exception of 2 corporations excluded
in prior years, the consolidation includes all subsidiaries 50% or more owned, totaling 50. Sheraton
Hotel of Philadelphia, Inc. is included in the accompanying consolidated statements for the first time.
Note 9—The portion of consolidated earned surplus
applicable to Canadian subsidiaries is $1,541,504,
which is subject to a 5% withholding tax on dividends.
Note 10—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. The first
mortgage bonds of the Canadian subsidiaries are reflected at their United States dollar equivalents using
the exchange rate in effect at the date the indebtedness was incurred. The current assets and liabilities
are reflected at the April 30, 1952 exchange rate of
Note 11—In June 1950, the office building formerly
owned by Whitehall Improvement Corporation was
sold and leased back under a long-term lease agreement. A 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.