The pre-tax provision for loss, which will be reflected in the Company's year-end 2001 earnings statement, will total approximately $285 million. It will be applied to various non-core assets, most of which are being held for disposition.
Of the $285 million, approximately $217 million relates to the recently-opened Hollywood & Highland retail and entertainment complex, and another $68 million relates to other assets and investments -- consisting primarily of Desert Passage ($18 million), European assets in Germany,Poland and the Czech Republic (total of $10 million), Canadian assets ($20 million) and the Company's investment in Captivate Network ($11 million).
The company is continuing to review its investment in Global Switch and expects to report on the results of that review when year-end earnings are released on Feb. 12. The determinations of value for both Hollywood & Highland and Desert Passage have been significantly impacted by cost over-runs at Hollywood & Highland and by the decline in international and domestic tourism since the events of Sept. 11. In addition, Desert Passage has been affected by the Chapter 11 filing of the adjacent Aladdin Hotel and Casino.
TrizecHahn President and CEO Christopher Mackenzie commented, "We engaged the services of expert appraisers to ensure that our properties being held for disposition are properly valued. We are satisfied that we have achieved that objective."
As tourism recovers and the overall economy improves, the company will continue to focus on maximizing the operational performance and future value of its retail and entertainment assets.
TrizecHahn, a public real estate companies in North America, has ownership interests in and manages a high-quality portfolio of 76 US office properties totaling 49 million sf concentrated in the central business districts of seven major cities. It also has interests in retail/entertainment properties in the US and Europe, a global technology center business, and properties inCanada. The company trades on the New York and Toronto stock exchanges under the symbol TZH.
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