The sharp decline in oil prices that occurred late in 2014 had an adverse impact on operating results throughout 2015. The important metrics of Funds from Operations, Adjusted Funds from Operations, and Distributable Income all turned negative in 2015. The duration of the downturn is still not clearly known. Although improvements may occur earlier, Management of Lakeview Hotel Investment Corp. is assuming that operating results will not show meaningful improvement until at least 2017 and is taking the measures it deems necessary to function through this downturn, without sacrificing the standard of operations at its hotels and restaurants.
Prior to the slowdown, Lakeview Hotel Investment Corp. had been focused on reducing its overall leverage in order to improve balance sheet ratios and to position the Corporation for future growth. These efforts will continue. Total liabilities have been reduced by $32 million since the end of 2012, largely through the sale of assets and the refinancing of debt. The Corporation has also been focused on cost saving measures to improve bottom line performance. The Corporation benefits greatly from the support of related parties that own over 59% of the outstanding shares of Lakeview Hotel Investment Corp., and from the agreement of related parties to defer fees. This has allowed the Corporation to remain current on all payments to all unrelated parties. The Corporation is current on all debt service payments to mortgage holders, other long-term debt holders, on all payments to debenture holders, and on all property tax and tax payments to all government agencies. The related parties remain committed to the welfare of the Corporation and will continue to provide the support necessary to benefit the Corporation and its Shareholders.
Lakeview Hotel Investment Corp is listed on the TSX Venture Exchange under the symbol “LHR”. Lakeview Hotel Investment Corp receives income from ownership, management and licensing of hotel properties.