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Hilton Hotels, 1960 Annual Report
Image 31
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Hilton Hotels Corporation. Hilton Hotels, 1960 Annual Report - Image 31. 1960. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. June 5, 2020. https://digital.lib.uh.edu/collection/hiltonar/item/476/show/470.

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.

Hilton Hotels Corporation. (1960). Hilton Hotels, 1960 Annual Report - Image 31. 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/476/show/470

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.

Hilton Hotels Corporation, Hilton Hotels, 1960 Annual Report - Image 31, 1960, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed June 5, 2020, https://digital.lib.uh.edu/collection/hiltonar/item/476/show/470.

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 Hilton Hotels, 1960 Annual Report
Creator (LCNAF)
  • Hilton Hotels Corporation
Publisher Hilton Hotels Corporation
Date 1960
Description Hilton Hotels Annual Report for calendar year 1960.
Subject.Topical (LCSH)
  • Hospitality industry
  • Hotel management
  • Corporation reports
Subject.Name (LCNAF)
  • Hilton Hotels Corporation
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 31
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_013_031.jpg
Transcript redeem 2 % of the maximum number of shares theretofore issued and outstanding. The Company has complied with this sinking fund provision. The 5l/i% Series "A" preferred shares are convertible at the option of the holders into common stock of the Company at a conversion ratio of 1.42 shares of preferred for each share of common (170,852 common shares of the Company have been reserved for this purpose), and at the option of the Company, such Series "A" shares will be redeemable at $26.25 plus accured dividends on and after January 1, 1961 to the date fixed for redemption. 450,000 shares of common stock of the Company have been reserved for the exercise of warrants which were originally attached to the $30,000,000 issue in 1959 of 6% subordinated sinking fund debentures of the Company. Each $1,000 debenture unit carried a warrant to purchase 15 shares of common stock. The warrants provide that this stock may be purchased at $42 per share until October 15, 1963; $46 per share thereafter to October 15, 1967; and, $50 per share thereafter to October 15, 1971, the expiration date of the warrants. 7-COMMITMENTS AND CONTINGENT LIABILITIES The Company and its Subsidiaries were committed to approximately $15,000,000 at December 31, 1960 in connection with construction of hotels and inns and alterations and revisions in existing properties. A subsidiary entered into an agreement providing for a first mortgage construction loan in the amount of $5,000,000 of which $1,666,667 is to be guaranteed by the Company. At December 31, 1960 the subsidiary had not drawn any of the funds available under this agreement. Under the terms of an agreement with this subsidiary, the Company has agreed to purchase from time to time, as the subsidiary shall request, but not later than December 31, 1961, 99,000 additional shares of $1.00 par value common stock at an aggregate price of $499,000 and a 4% twenty-five year subordinated note of the subsidiary, in the principal amount of $1,500,000 at a price equal to the principal amount. The Company is guarantor to the extent of $1,000,000 under a $3,000,000 long-term obligation of this subsidiary. The Company has agreed to purchase all of the authorized $10.00 par capital stock of Hilton Inns, Inc., totaling $10,000,000. At December 31, 1960 the Company had purchased 610,000 shares of such stock at a cost of $6,100,000. The Company was contingently liable to the extent of approximately $4,350,000 as it did not receive releases from mortgagees under certain mortgages assumed by buyers of properties, who, however, agreed to hold the Company harmless against any liability thereon. The Company entered into an agreement dated September 12, 1958 with respect to a Hilton Inn, guaranteeing payment to the lessor, by Hilton Inns, Inc., of sufficient annual rental (not to exceed $192,000 per annum) to discharge debt service on the lessor's first mortgage, and guaranteeing payment by Hilton Inns, Inc. of real estate taxes and insurance premiums on the Inn. On January 19, 1961, the Company entered into an agreement to purchase the Hawaiian Village Hotel in Honolulu, Hawaii for cash of $19,341,951 and 62,500 shares of common stock of the Company. In connection with this transaction certain land was leased for a term of 7Vi years with rental at $180,000 per annum for the first two years; $240,000 per annum for the next two years; $300,000 per annum for the next year and one-half; and, $360,000 per annum for the last two years, with an option to purchase such land on or before the termination of the lease term for $6,000,000. In addition, another tract consisting of two parcels of land was leased with rental based upon a percentage of gross business conducted in facilities existing thereon, with an option to purchase at a price of $22.50 per square foot if both parcels are purchased, and $25.00 per square foot if either parcel is purchased. In connection with two hotels under construction in The Netherlands, Hilton Hotels International, Inc. subscribed to 1,000,000 guilders ($265,275 at current exchange) in the share capital of each landlord company. "International" subscribed to purchase stock, at a cost approximating $250,000, in the Italian corporation constructing a hotel in Rome. In accordance with the lease being negotiated for a hotel in London, England, "International" is required to furnish the hotel at a $2,500,000 estimated cost. The transfer of profits from foreign divisions and subsidiaries of "International" to the United States would be subject to dividend and/or distribution taxes imposed by the country of origin. 8-LONG TERM LEASES The Company and its Subsidiaries operate or will operate certain properties under leases ranging from one year and one month to thirty-eight years five and one-half months from December 31, 1960, with options to renew in some instances. The total minimum annual fixed or basic rentals payable (exclusive of real estate taxes, insurance and other occupancy charges) under such leases for each of the next five years ending December 31, follows: 1961, $10,334,492; 1962, $9,822,956; 1963, $9,480,733; 1964, $9,484,483; and, 1965, $9,484,483. Rentals and other obligations of a Canadian Subsidiary of Hilton Hotels International, Inc., are guaranteed by both "International" and by the Company. Under the terms of the assignment of the Caribe Hilton lease to the Caribe Hilton Hotel Corporation of Delaware, "International" and the Company continued liable for the tenant's obligations under the lease. Under an agreement to lease a hotel in construction at Rome, Italy, "International" and the Company jointly guaranteed the tenant's obligations. "International" remained contingently liable for performance under all other leases entered into by or assigned to its foreign subsidiaries. The wholly-owned subsidiary, Hilton Hotels International, Inc., has negotiated preliminary contracts or agreements for the operation of hotels under construction, or under consideration, on sites outside the continental United States, subject to fulfillment of conditions precedent and execution of final leases. In general, "International" or its subsidiaries is required to furnish initial operating inventories and maintain sufficient working capital. The leases basically provide for a rental based on a percentage of gross operating profit with certain specific rental obligations. 9-LIMITATIONS AND RESTRICTIONS Under the most restrictive covenants of "International's" long- term financing, "International" must maintain its consolidated working capital at not less than $1,250,000 of which one-half is available in the United States or "hard currency" areas; and is restricted as to dividends, borrowings, investments, leasing and fixed asset purchases. Indentures and loan agreements of the Company and an affiliate, as amended, contain certain restrictive provisions providing for the Company and certain subsidiaries, on a consolidated basis, to maintain working capital of not less than $7,000,000; a ratio of current assets to current liabilities of not less than 125%, and include limitations upon the declaration and payment of cash dividends and the payment for purchase, redemption or retirement of shares of any class of capital stock. In accordance with the agreements, earned surplus in the amount of $56,771,231 was restricted at December 31, 1960. 10-RESERVE FOR CONTINGENCIES The Board of Directors of the Company increased this reserve from $500,000 to $2,500,000 to provide for possible adjustments for taxes, investments and other contingencies. 29