Lakeview Hotel REIT Reports 3rd Quarter Financial Results
/NOT FOR DISSEMINATION IN THE
Lakeview REIT continues to operate in a very challenging environment of declining demand for hotel accommodations. During this period, Lakeview REIT has been carefully monitoring its capital resources to ensure it continues to be in a position to meet all of its ongoing obligations. The REIT continually reviews its capital assets in close consultation and cooperation with its lenders for opportunities to improve both its balance sheet and cash flows. While hotels located in gas markets have been challenged by the lack of drilling activity, Lakeview REIT continues to benefit from its assets located outside of its gas markets which have provided more stable cash flow to the REIT. These assets will provide Lakeview REIT with a strong base for future growth when the overall economy improves and as gas prices ultimately strengthen.
Following is a comparison of the operating results for the three and nine months ended
Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
Hospitality Revenue
Room 7,971,535 10,223,940 23,322,006 26,507,779
Food & Beverage 707,895 771,880 2,212,330 2,815,628
Other 353,354 491,404 1,364,955 1,313,396
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Total Revenue 9,032,784 11,487,224 26,899,291 30,636,803
Expenses 10,562,138 11,343,464 32,149,120 31,460,823
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Net Income (Loss)
before future income
tax expense (1,529,354) 143,760 (5,249,829) (824,020)
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Basic and diluted income
(loss) before income
tax per unit (0.078) 0.007 (0.270) (0.043)
Future Income Tax
(Expense) Recovery(1) - (86,000) - (82,000)
Net Income (Loss) (1,529,354) 57,760 (5,249,829) (906,020)
Basic and Diluted Income
(Loss) per Unit (0.078) 0.003 (0.270) (0.047)
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Reconciliation to funds
from Operations
Add (deduct)
Amortization of income
properties 1,670,341 1,603,196 5,013,603 4,543,158
Amortization of franchise
fees 8,733 12,161 48,407 36,099
Distributions from Lakeview
Flag Licensing General
Partnership 122,500 55,860 419,930 355,250
Income from Lakeview Flag
Licensing General
Partnership (147,640) (121,734) (478,938) (440,032)
Future income tax expense
(recovery) - 86,000 - 82,000
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Funds from Operations
(FFO) 124,580 1,693,243 (246,827) 3,670,455
Basic and diluted funds
from Operations per unit 0.006 0.088 (0.013) 0.190
Contributions to reserve
account (219,061) (353,969) (602,260) (924,741)
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Adjusted funds from
Operations (AFFO) (94,481) 1,339,274 (849,087) 2,745,714
Basic and diluted adjusted
funds from Operations
per unit (0.005) 0.069 (0.044) 0.142
Reconciliation to
distributable income
Accretion on debt component
of convertible debentures 266,540 246,741 771,275 601,548
Accretion of debentures 46,543 41,886 136,028 81,367
Accretion of mortgages
payable 55,330 51,385 159,992 152,428
Decretion of mortgages
receivable - 1,029 56,877 3,325
Compensation costs of
unit options - 55,845 - 55,845
Loss on settlement of
mortgage receivable - - 98,244 -
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Distributable income 273,932 1,736,160 373,329 3,640,227
Basic and diluted
distributable income
per units 0.014 0.090 0.019 0.189
Distributions 0 2,122,150 192,748 6,365,473
The management and Trustees of Lakeview REIT believe that natural gas prices will rise over time, although the timing is uncertain, and ultimately there will be resumed drilling activity in many of Lakeview REIT's markets. In the interim, Lakeview REIT continues to take all measures it believes necessary to be in a position to capitalize on improved market conditions when they occur. These measures include focused sales and marketing efforts to increase market share for Lakeview REIT hotels. While drilling activity is depressed, there is still activity related to the oil and gas industry in the form of refinery, pipeline and compressor station infrastructure development and servicing activity of existing wells. Lakeview REIT is focusing on capturing the business from these ancillary activities.
Lakeview REIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbol "LHR.UN". Lakeview REIT receives income from ownership, management and licensing of hotel properties.
The TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
%SEDAR: 00020441E
For further information: Keith Levit, President, or Avrum Senensky, Vice President Finance, Tel: (204) 947-1161, Fax: (204) 957-1697, Email [email protected]
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