H Group Holding, Inc. and Subsidiaries - Page 28




                                        - 14 -                                         

          provided, Hyatt Domestic would charge the Hyatt International                
          group a prorated chain allocation10 on a per room basis as                   
          follows:  Non-North American hotels to pay 50 percent of the                 
          usual chain allocation; Canadian hotels to pay 75 percent; United            
          States hotels to pay 100 percent.  These percentages were based              
          on the perceived relative benefit received by each group of                  
          hotels.  Effective February 1, 1980, HIC and Hyatt Domestic                  
          agreed to represent each other in their respective geographical              
          markets and to separately control and account for their                      
          respective expenses.  As of 1980, Hyatt Domestic concluded that              
          the exchanged benefits had equalized, so that no further charges             
          were allocated for chain expenses to Hyatt International hotels.             
               Pursuant to the 1974 agreement, HIC charged Hyatt Domestic              
          the following amounts:                                                       
                    Taxable year                                                       
              ending            Amount                                                 
                    Dec. 31, 1975       $296,250                                       
                    Dec. 31, 1976       368,746                                        
                    Dec. 31, 1977       489,591                                        
                    Dec. 31, 1978       568,750                                        
                    Dec. 31, 1979       666,080                                        
                    Dec. 31, 1980       56,250                                         
          HIC’s charges for chain-type services were included in Hyatt                 
          Domestic’s total chain expenses.  The total of chain services                
          expense was billed by Hyatt Domestic directly to Hyatt                       


               10  “Chain allocation” refers to the amount determined by               
          the cost-sharing formula applied to chain services.                          




Page:  Previous  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Last modified: May 25, 2011