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Sheraton Corporation of America, 1963 Annual Report
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Starwood Hotels & Resorts. Sheraton Corporation of America, 1963 Annual Report - Image 5. 1963. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. November 12, 2019. https://digital.lib.uh.edu/collection/hiltonar/item/390/show/374.

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. (1963). Sheraton Corporation of America, 1963 Annual Report - Image 5. 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/390/show/374

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, 1963 Annual Report - Image 5, 1963, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed November 12, 2019, https://digital.lib.uh.edu/collection/hiltonar/item/390/show/374.

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, 1963 Annual Report
Creator (LCNAF)
  • Starwood Hotels & Resorts
Publisher Starwood Hotels & Resorts
Date 1963
Description Sheraton Corporation of America Annual Report for the year ending on April 30, 1963.
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 5
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_024_005.jpg
Transcript • 3 the efforts and the ingenuity of the principal officers of the Company. Sheraton executives are all very eager to restore as soon as possible the upward trend to which for so many years we have been accustomed. The decline in basic earnings of a considerable number of Sheraton properties was fortunately offset to a small degree by a continuing uptrend of several Sheraton Hotels. The net decline, however, combined with other adverse factors, has brought about for the second successive year a reduction in the indicated net asset value per share. This is after two decades of consist- endy and at times impressively rising net asset values, which (after adjusting for stock splits and stock dividends) carried Sheraton shares from an indicated net asset value of $.33 a share in 1941 to a maximum of $31.43 a share, in terms of presendy outstanding shares, in fiscal 1961. The indicated net asset value has since dropped back to $21.15, following two rather difficult years. It should be emphasized that estimates of asset values by Company officers, although representing the best judgment of the officers, are nonetheless only theoretical and should not be given undue weight, since determination of such values cannot be an exact science, and estimates may be subject to wide fluctuations, due to various market conditions and other factors. Total "basic earnings" amounted to $30,753,110 this year compared with $32,447,275. Interest charges to which these earnings are applicable increased despite heavy amortization payments on mortgages and debentures. Furthermore the current yardsticks, or what we call the "multipliers" used when capitalizing the basic earnings, have been adjusted downward to reflect changes in the general level of real estate values. Our normal yardstick for capitalizing basic earnings this year was a multiplier of 854 compared with 8% a year ago. Adjustments are made for the age of the building, the trend of earnings, the existence of favorable financing, etc. The average multiplier, which includes such adjustments, was 8.5 this year compared with 9.1 a year ago. New hotels with less than two years of operation are carried at book value, since it generally requires that much time to build up normal earnings. The increase in interest requirements reflects the cost of new construction now being completed. Interest charges were $11,373,538 compared with $10,345,448 during the previous year. The change in the rate of capitalization of basic earnings for purposes of estimating indicated net asset values was gready influenced by some fairly drastic changes that occurred in the real estate market during the year. The financing of real estate by means of what has been known as syndications has largely come to an end. This is the type of financing under which income real estate was sold in large volume to individual investors who acquired a direct partnership participation in the ownership of real estate properties. Such syndicates often paid "dividends" between 10% and 14% per year on the investment in the properties, leaving little or nothing for the capital improvements so often essential to the competitive maintenance of real estate. The widespread demand for income real estate for purposes of "syndication" had raised the market value of hotels. Due largely to the virtual drying up of demand from this source, Sheraton is obliged to apply a more conservative capitalization of basic earnings, which accounts in part for the quite sharp decline this year in the indicated net asset value of Sheraton shares. The almost complete cessation of this type of financing, however, should substantially reduce future competition from hotels and motor inns built because of the salability (up to a year ago) of such syndication participations. This should benefit Sheraton by reduced future construction financed in this manner. Net Worth Profit The so-called "net worth profit" (outlined in detail in previous annual reports), which has averaged some $14,300,000 a year in the period 1951 to 1961, was again for the second consecutive year a minus figure (see chart page 4). This "net worth profit" represents the reported earnings adjusted for any estimated excess or insufficiency during the year of depreciation reserves needed to offset changes in market value of real estate properties held. The indicated market values are determined each year by the officers of the Company by