. basis of consolidation—Included in the Consolidated Balance Sheet are the wholly-owned subsidiaries, State-Monroe Equipment
Corporation, a non-operating unit which holds title to the furnishings and equipment of the Palmer House, Chicago and Hilton
Hotels International, Inc. which holds amongst its assets 7,310 shares, representing approximately 7%, of the capital common stock
of Bermuda Development Company, Ltd., which is carried as an investment in the consolidation. The Corporation has adopted the
policy on non-consolidation of companies which are not wholly-owned subsidiaries. Holdings of Mayflower Hotel Corporation
representing 69.75% of the capital stock of that Corporation are carried in the accompanying Balance Sheet, as investments at cost,
such cost being SI ,005,621.04 greater than book value at dates of acquisition and 5393,542.45 greater than book value at December
2. fixed assets, depreciation and amortization—The properties included under Fixed Assets on the Balance Sheet at December 31,
1949 are the same as those included on the Balance Sheet at December 31, 1948 except for the Palm Beach Biltmore Hotel which
was sold on January 1, 1949. Operating equipment for 1949 includes that of Caribe-Hilton Hotel which was opened in December 1949.
This Hotel is under lease from Puerto Rico Industrial Development Company by Hilton Hotels International, Inc., a wholly-owned
subsidiary of Hilton Hotels Corporation.
Fixed Asset values and depreciation reserves ha>
represent cost to predecessor companies, plus additions at cos
Depreciation on buildings has been determined accordin
from date of original construction, ranging from 50 years in
House, the Stevens Hotel and the Palmer House, the latter's e.
to a 30-year life for the Lubbock Hilton Hotel.
been carried over from the predecessor companies. The Fixed Asset values
i the straight line method on the basis of an estimated overall life
case of the Plaza Hotel, to 40 to 45 years in the case of the Town
lated overall life having been changed from 40 to 45 years in 1949,
provements are being amortized over the remaining life of the existing leases.
straight line basis at varying rates by classifications in accordai
Furniture, furnishings and equipment are depreciated
with the estimated useful life of the respective assets.
Expenditures for rehabilitation, alterations and revisions are charged 1
periods from three to twenty years.
Current depreciation rates being applied to cost basis by individu
accordance with industry-wide practice.
Operating equipment represents reserve stock inventories of linens, china, glat
shown at net values after deduction of reserves covering estimated depreciation and deplcl
a special classification and amortized <
properties appear to be reasonable and adequate and i
and silverware at cost, and stocks in use
m of such stocks through loss and discard.
. due from employees and officers for stock purchases—In accordance with the Agreement of Consolidation, 50,000 shares of
common stock were reserved for offering to key employees at a price of 517.50 per share, payments therefor to be made in installments
over a period not exceeding four (4) years. (Since extended for a period of three (3) years by action of the Board of Directors.) As
of December 31, 1946 a total of 44,342 shares were subscribed for by various employees. Of this total, subscriptions to 10,922 shares
have been cancelled to date, leaving a total of 33,420 shares subscribed for as of December 31, 1949 at a total cost of 5584,850.00.
Of this amount, 5265,300.00 has been paid on account, leaving an unpaid balance of 8319,550.00 as of the Balance Sheet date. This
unpaid balance is secured by signed purchase agreements of the individual employees. The shares so subscribed have been issued
as partially paid shares entitled to dividends only to the extent to which the purchase price therefor has been paid.
. pre-openinc expenses—These expenses were incurred in connection with Caribe-Hilton Hotel which property is under lease from
Puerto Rico Industrial Development Company by Hilton Hotels International, Inc., a wholly-owned subsidiary of Hilton Hotels
. provision for federal and state taxes on income—As of December 31, 1949 this account consisted of an unpaid Federal Income
Tax liability of 528,014.45 of New Mexico Hilton Hotel Company, a predecessor company; Federal and State Income Tax liability
of Hilton Hotels Corporation for the year ended December 31, 1949 in the amount of 52,500,000.00 estimated on the basis of approximately 38% of the operating profit and 25% of capital gains for the period and the 1949 estimated Income Tax liability of 5265.82
of State-Monroe Equipment Corporation, a wholly-owned subsidiary.
s of Federal Income Tax Returns of pred.
Stevens Hotel Corporation—Year 1945 and to May 31, 1946 presently under examination by the Treasury Department.
The Plaza Hotel Corporation—Year 1945 and to May 31, 1946 subject to review by the Treasury Department.
Dayton Biltmore Hotel—(A Partnership)—Year 1945 and to May 31, 1946 subject to review by the Treasury Department.