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EXHIBIT 99.5
Notes to Pro Forma Combined Financial Statements
Distribution of Imperial
In March 2000, the Registrant distributed all common stock of
Imperial to its shareholders. One share of Imperial common stock was
distributed for every 20 of the Registrant's common shares of beneficial
interest held on March 20, 2000. Approximately 2.1 million shares of Imperial
common stock were distributed. As part of the spin-off, the Registrant repaid
Imperial Parking Limited's bank credit facility of approximately $24.2
million, contributed approximately $7.5 million of cash, contributed its 14
Canadian parking properties and $6.7 million for a parking development located
in San Francisco, California.
Sale of Crossroads Shopping Center
In April 2000, the Registrant sold Crossroads Shopping Center for
$80.1 million, of which approximately $78.1 million was applied against a loan
payable to the purchaser, the assumption of the first mortgage debt on the
property and other liabilities. The Registrant recognized a gain on the sale
of approximately $58.7 million, less an extraordinary loss on extinguishment
of debt of approximately $2.4 million.
Sale of Temple Mall
In August 2000, the Registrant received approximately $2.4 million
representing its 50% non-controlling ownership interest in the net proceeds
from the sale of Temple Mall. The Registrant accounted for its interest in
Temple Mall as an investment in a joint venture using the equity method of
accounting. The Registrant recognized a gain from the investment in the joint
venture of approximately $1.2 million. Temple Mall was sold for approximately
$25.7 million, of which approximately $19.5 million was applied against the
first mortgage debt on the mall. In addition, the joint venture repaid its
$1.2 million note payable to the Registrant from cash reserves.
Sale of the Huntington Garage
In December 2000, the Registrant sold the Huntington Garage for $21.3 million,
of which approximately $7.6 million was applied against the first mortgage
debt on the garage. The Registrant recognized a gain on the sale of
approximately $16.1 million, less an extraordinary loss on early
extinguishment on debt of approximately $.6 million.
Sale of Properties
In March 2001, the Registrant sold a significant portion of its remaining real
estate assets (the "Purchased Assets") to the Purchaser for an aggregate sale
price, before costs and adjustments, of $205 million. At the closing of this
transaction, the sale price of $205 million was reduced by $20.6 million,
which was the net sales price realized by the Registrant from the sale of the
Huntington Garage which was sold in December 2000 to another party and which
was part of the aggregate sales price of $205 million. The Huntington Garage
property was among those that Purchaser agreed to acquire from the Registrant.
The Purchaser and the Registrant had agreed that the Registrant was permitted
to sell the Huntington Garage property to a third party and that Purchaser
would receive a credit towards the $205 million purchase price equal to the
net sales price realized by the Registrant from the sale of the Huntington
Garage.
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The assets purchased by Purchaser consisted of the following:
- 55 Public Square and CEI Office Buildings - Cleveland, Ohio
- 55 Public Square Garage - Cleveland, Ohio
- West Third Street Parking Lot - Cleveland, Ohio
- North Valley Tech Center - Thornton, Colorado
- Two Rivers Business Center - Clarksville, Tennessee
- Westgate Shopping Center - Abilene, Texas
- Pecanland Mall - Monroe, Louisiana
- Long Street Garage - Columbus, Ohio
- Madison and Wells Garage - Chicago, Illinois
- Printers Alley Garage - Nashville, Tennessee
- 5th and Marshall Garage - Richmond, Virginia
- Club Associates' note receivable, face amount of
approximately $1.5 million.
- Ancillary assets including furniture, fixtures and
equipment, and reserve and escrow accounts related to the
Purchased Assets
- Net operating income from all of the Purchased Assets from
June 1, 2000 less (a) debt service on the purchased assets,
(b) capital expenditures committed subsequent to May 9, 2000
and (c) 66.6% of asset management fees paid to Radiant
Partners, LLC from June 1, 2000 until the closing of the
transaction
The Registrant retained ownership of the following assets:
- Unrestricted cash and Treasury bills
- Convertible preferred investment in HQ Global Workplaces
- Severance and prior trustees escrow account
- Park Plaza Mall - Little Rock, Arkansas
- Circle Tower - Indianapolis, Indiana
- Peachtree Mall legal claim
In addition, the Registrant retained ownership of Ventek.
The Registrant remains liable for the following obligations:
- 8.4% convertible preferred shares; $24,620,000
approximate face amount
- 8.875% Publicly-traded senior notes; $12,500,000
approximate face amount
- Dallas management office lease (the Registrant has
sub-leased this space)
- Certain liabilities relating to the Purchased
Assets arising prior to June 1, 2000, except for
certain potential liabilities of the Westgate
Shopping Center
- Corporate expenses and liabilities not related to
the Purchased Assets (including the Ventek
guarantee)
- Property level mortgage debt on retained assets
- Other ordinary course liabilities
Radiant Partners, LLC will continue to manage the Registrant's
remaining assets for $250,000 per year for two years.
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In connection with the sale, the Registrant granted to the Purchaser
a four-month bridge loan, which may be extended for an additional two months.
The loan in the amount of $7.0 million bears interest at 11% per annum secured
by cross-collateralized first mortgages on two properties. Payments of
interest only are payable in monthly installments commencing April 1, 2001
through and including July 1, 2001. The loan may be extended by the purchaser
through September 1, 2001 at an interest rate of 15% per annum, at which time
all principal and accrued interest shall be payable. Prepayment of the loan is
permitted without penalty only by payment of the entire principal balance and
accrued interest at time of prepayment or based upon specified release terms,
as defined. The Pro Forma financial statements do not include an adjustment
related to the loan due to its short-term nature.