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issuances of the deficiency notices, were confronted with a
compelling financial picture. For 1976 Hyatt’s domestic
(including HIC) operations reflected revenues somewhat over $1.5
million with expenses somewhat over $2.5 million, whereas the
amounts reflected for foreign operations income approached $4.5
million with expenses approaching $.5 million. Accordingly
domestic operations had almost a $1 million loss and foreign
operations had almost a $4 million gain. These differences
increased throughout the period, and in the 1982 year domestic
operations had about $2.5 million income and $8.5 million
expenses for about a $6 million loss. The foreign operations,
for 1982, had about $13.5 million income and $3.3 million
expenses for about a $10 million gain. Roughly, domestic
operation expenses averaged about double the amount of receipts
and foreign operation expenses were only about 50 percent of
their receipts.
During the period under consideration, the foreign operation
receipts and profit was, in general, steadily increasing. During
that same period, the domestic operation expenses were steadily
increasing in tandem with foreign receipts and profit, but
domestic receipts tended to be more static. These circumstances
resulted in generally increasing losses for domestic operations
and generally increasing gains for foreign operations.
Throughout the period, HIC was involved in the management of its
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