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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 7. 1963. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. November 19, 2019. https://digital.lib.uh.edu/collection/hiltonar/item/390/show/376.

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 7. 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/376

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 7, 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 19, 2019, https://digital.lib.uh.edu/collection/hiltonar/item/390/show/376.

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 7
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_024_007.jpg
Transcript capitalizing the basic earnings of the respective hotels by the best yardsticks, or what we call multipliers, available to the officers. These yardsticks though obviously not infallible, have nonetheless in the case of actual sales been found to be conservative. Since "net worth profit" necessarily fluctuates in relatively large swings, both during good and poor years, it is suggested that this measure of performance should not carry excessive weight in the formulation of a dividend policy. It is likewise the management's view that the "reported earnings" when unduly influenced by what might be considered exaggerated depreciation reserves allowable to encourage new construction, should not rigidly be accepted as the basis of a long range dividend policy. Adjusted Earnings We suggest that for long range dividend appraisal purposes, taking into account both good and bad years, what we call "adjusted earnings" provides a more satisfactory yardstick. Such "adjusted earn,- ings" are determined by substituting for the depreciation reserves set up on the Company's books, for income tax purposes, an amount equal to 6% of gross hotel sales (Thompson Industries, Inc. excluded). This figure was chosen because it seems to coincide closely with the average rate of depreciation customary in the industry as reported in recent years by leading hotel accounting firms. Using this yardstick, Sheraton's so- called "adjusted earnings" amounted to $4,625,000 for the past year or $.86 per share compared with $7,911,000 or $1.45 per share for the preceding year. The "adjusted earnings" for the current year were also adversely affected by the inclusion of adjustments applicable to prior years. These are described in Notes to Consolidated Financial Statements — Note No. 10. The last dividend of $.10 which is at the annual rate of $.40 per share, is, we believe, currently adequately covered by "adjusted earnings" on the basis of long range estimated depreciation requirements. It allows for the retention of substantial funds for increased debt amortization needed to restore our long term debt to a level close to 50% of the estimated market value of our properties. The ratio of long term debt to total assets at market value (after deducting current liabilities) as estimated by Company officers is 60.3%. If the two issues of subordinated income debt securities are excluded, the ratio becomes 45.9%. Although there has been some criticism of the Company's recent dividend reduction in the face of sufficient "adjusted earnings" to more than cover the former $.60 disbursement, the need for debt reduction to maintain a satisfactory balance between debt and market value of properties was considered of greater importance by the directors. Since the end of the fiscal year, the ratio of long term debt has been improved through the sale of two Sheraton properties for close to $15,000,000, payable in cash. This represents an increase of one million dollars over the figures used for computing estimated net asset values of these two properties a year ago, plus whatever will prove to be the value of that portion of one of the properties which was retained. Sheraton retains the operating rights to both properties. Nearly all of the 15 million dollar proceeds of these two sales are being used to eliminate the Company's principal current bank loans, to reduce outstanding mortgages, for the purchase of more than a million and a quarter of Company debentures in anticipation of this year's sinking fund requirements, and for the anticipation of subsidiary company term loans payable during the current fiscal year. Such loans were secured from local banks to finance improvements to existing Sheraton Hotels. The two property sales were the Princess Kaiulani Hotel in Honolulu to Japanese interests, and the more than two acres of land on which the Sheraton-Palace stands to one of the country's largest insurance companies. By retaining title to the Sheraton-Palace Hotel building, Sheraton retains a substantial asset. New Construction Sheraton's hundred million dollar construction program announced some six years ago has now, with the opening of the new Sheraton-Ritz in Minneapolis, been virtually completed. Favorable comments from the Twin Cities indicate that our con-