HLR.DB.A - Holloway Lodging REIT reports strong third quarter results and 17% increase in distribution (CAD 0.03)

Company: Holloway Lodging Reit 6.5% Debs
Stock Name: HLR.DB.A
Amount: CAD 0.03
Announcement Date: 13/11/2012
Record Date: 28/11/2012

Dividend Detail:

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/NOT FOR DISTRIBUTION ON U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/

HALIFAX, Nov. 13, 2012 /CNW/ - Holloway Lodging Real Estate Investment
Trust (TSX: HLR.UN) ("Holloway") today announced financial results for
the three months ended September 30, 2012. All amounts are in Canadian
dollars unless otherwise indicated. Readers should refer to Holloway's
unaudited interim consolidated condensed financial statements as at
September 30, 2012 and its management discussion and analysis which are
available on Holloway's website at www.hlreit.com and on SEDAR at www.sedar.com.

Key Events - Q3, 2012

• 
  Holloway recorded increased same-store revenue, operating income per
  available room, operating income margin, funds from operations and
  distributable income for the three months ended September 30, 2012
  compared to the three months ended September 30, 2011:
  

��	��	��	��	��	��	��	��	��
(In millions where indicated except percentages and per room measures)	��	2012	��	2011	��	$ INCREASE	��	% CHANGE
��	��	��	��	��	��	��	��	��
Hotel revenues - same store	��	$15.6 M	��	$15.2 M	��	$0.4M	��	2.5%
Revenue per available room - same store	��	$93.57	��	$90.52	��	$3.05	��	3.4%
Hotel operating income per available room before depreciation	��	$38.73	��	$35.42	��	$3.31	��	9.3%
Hotel operating income margin	��	38.1%	��	34.4%	��	-	��	3.7 ppt
Funds from operations	��	$3.3 M	��	$2.4 M	��	$0.9 M	��	37.5%
Distributable income	��	$3.3 M	��	$2.1 M	��	$1.2 M	��	57.1%

• 
  The REIT repaid $3.9 million of debt in the third quarter, including:
  




• 
  Repayment at maturity of the $2.5 million mortgage secured by the Super
  8�� hotel in Windsor, NS. The REIT now has two hotels unencumbered by
  mortgages.
  


• 
  Penalty-free prepayment of $0.4 million of the mortgage secured by the
  Super 8�� hotel in Truro, NS.
  




• 
  The REIT sold its minority interest in the Super 8�� hotel in Amherst, NS
  for $0.2 million.
  


• 
  The REIT returned $0.9 million to unitholders in the third quarter,
  consisting of:
  




• 
  Repurchase of 89,300 units under its normal course issuer bid at an
  average cost of $3.56 per unit,
  


• 
  Declaration and payment of a distribution of $0.03 per unit
  

Distribution Increase

In August 2012, the Board of Trustees reinstated Holloway's distribution
at a quarterly rate of $0.03 per unit, representing an annual
distribution of $0.12 per unit, due to the material improvement in
Holloway's business and capital structure. On November 13, 2012, the
Board of Trustees decided to increase Holloway's quarterly distribution
by 17% to $0.035 per unit, representing an annual distribution of $0.14
per unit. The increased quarterly distribution will be payable on
December 17, 2012 to unitholders of record on November 30, 2012. The
Board of Trustees will consider the merits of further increasing the
distribution in coming quarters.

Michael Rapps, Chairman of Holloway, stated: "Holloway's results reflect
improved business conditions, positive operating performance at our
hotels and a material improvement in our capital structure. We believe
that our increased distribution remains conservative, sustainable and
leaves considerable cash flow for Holloway to invest in its hotels,
repay additional mortgage debt, repurchase units and selectively
acquire hotels that are accretive to us."

Outlook

Holloway continues to be cautiously optimistic about the performance of
its hotels in the coming quarters. While we do not expect material
improvement at our three Atlantic Canadian hotels, we are seeing
continued positive developments at our Western Canadian hotels as well
as our sole US hotel. A number of large-scale infrastructure projects
have been proposed and/or are underway in Northern Alberta and British
Columbia that are expected to benefit several of Holloway's hotels.

In recent quarters, significant progress has been achieved in reducing
Holloway's total debt, which now consists of mortgages on 15 of its 17
hotels. Holloway will look to further reduce its mortgage debt and its
annual interest expense as opportunities arise.

Holloway will continue to focus on operational efficiencies through
operating cost reductions and by completing capital upgrades at its
hotels. Holloway also expects to increase revenue through strategic
capital investments and potentially through development of owned excess
land. To this effect, Holloway has commenced the expansion of its Super
8�� hotel in Fort St. John, BC, which is expected to result in eight new
guest rooms. Holloway will also commence in the next several weeks the
upgrade of its Super 8�� hotel in Yellowknife, NWT which will result in
the renovation of all 66 guestrooms and enable us to increase occupancy
and rate. Holloway will also seek to selectively acquire additional
hotels to the extent such acquisitions are accretive to Holloway's cash
flow and net asset value.

Operating Results

The following table provides a summary of the operating results for the
three and nine months ended September 30, 2012 and 2011.

��
��	Three months ended			��	Nine months ended
(in $000's except number of units and per unit results)	Sept. 30, 2012	��	Sept. 30, 2011	��	Sept. 30, 2012	��	Sept. 30, 2011
Hotel revenues	15,563	��	21,162	��	45,819	��	59,650
Hotel expenses	9,631	��	13,887	��	30,168	��	42,229
Hotel operating income before depreciation	5,932	��	7,275	��	15,651	��	17,421
Other expenses	4,704	��	8,642	��	9,032	��	24,972
Provision for income taxes	-	��	-	��	-	��	-
Income (loss) for the periods	1,228	��	(1,367)	��	6,619	��	(7,551)
Weighted average basic units outstanding	18,812,681	��	983,350	��	17,397,509	��	983,350
Weighted average diluted units outstanding	18,812,681	��	983,350	��	17,397,509	��	983,350
Basic income (loss) per unit*	0.06	��	(1.39)	��	0.38	��	(7.68)
Diluted income (loss) per unit*	0.06	��	(1.39)	��	0.38	��	(7.68)
Reconciliation to funds from operations (FFO)	��	��	��	��	��	��	��
Add / (deduct):	��	��	��	��	��	��	��
Depreciation and amortization on real property	1,908	��	2,310	��	5,783	��	7,349
Provision for (recovery of) deferred income taxes	-	��	-	��	-	��	-
(Gain) loss on disposal of hotel properties	64	��	1,452	��	(5,593)	��	1,950
Loss on disposal of minority interest investment in hotel properties	101	��	-	��	101	��	-
Funds from operations - basic and diluted	3,301	��	2,395	��	6,910	��	1,748
Basic FFO per unit*	0.18	��	2.44	��	0.40	��	1.78
Diluted FFO per unit*	0.18	��	2.44	��	0.40	��	1.78
Reconciliation to distributable income	��	��	��	��	��	��	��
Add/(deduct):	��	��	��	��	��	��	��
Depreciation and amortization - trust and other assets	18	��	45	��	105	��	138
Accretion of mortgages, loan due to a related party, convertible debentures and deferred financing fees	44	��	799	��	698	��	2,603
Fair value adjustment on Class B LP units and derivative liability	(8)	��	(73)	��	26	��	(104)
Gain on repurchase of convertible debentures	-	��	(507)	��	-	��	(507)
Unit-based compensation	385	��	62	��	400	��	62
FF&E reserve	(467)	��	(635)	��	(1,375)	��	(1,789)
Distributable income - basic and diluted	3,273	��	2,086	��	6,764	��	2,151
Basic distributable income per unit*	0.17	��	2.12	��	0.39	��	2.19
Diluted distributable income per unit*	0.17	��	2.12	��	0.39	��	2.19
Reconciliation of cash generated from operating activities to distributable income	��	��	��	��	��	��	��
Net cash generated from operating activities	3,811	��	254	��	4,219	��	2,767
Changes in items of working capital	(71)	��	2,467	��	3,920	��	1,173
FF&E reserve	(467)	��	(635)	��	(1,375)	��	(1,789)
Distributable income	3,273	��	2,086	��	6,764	��	2,151
*Periods prior to Q1 2012 are not directly comparable due to the conversion of 2012 convertible debentures.

Holloway Lodging Real Estate Investment Trust

Holloway is a real estate investment trust focused on owning and
operating select and limited service lodging properties and a small
complement of full service hotels primarily in secondary, tertiary and
suburban markets. Holloway currently owns 17 hotels with 1,665 rooms.
Holloway's trust units trade on the Toronto Stock Exchange under the
symbol HLR.UN.

This press release contains forward-looking information within the
meaning of applicable securities laws. Forward-looking information may
relate to Holloway's future outlook and anticipated events or results
and may include statements regarding the future financial position,
property acquisition or disposal strategies and opportunities, business
strategy, financial results and plans and objectives of Holloway.
Particularly, statements regarding Holloway's future distribution
policy, the potential acquisition of hotels and the expected results of
approved infrastructure projects are forward-looking statements. In
some cases, forward-looking information can be identified by terms such
as "may", "will", "should", "expect", "plan", "anticipate", "believe",
"intend", "estimate", "predict", "potential", "continue" or other
similar expressions concerning matters that are not historical facts.
Forward looking-information is subject to certain factors, including
risks and uncertainties, that could cause actual results to differ
materially from what Holloway currently expects and there can be no
assurance that such statements will prove to be accurate.�� Some of
these risks and uncertainties are described under "Risk Factors" in
Holloway's Annual Information Form ("AIF"), dated March 14, 2012 which
is available at www.sedar.com. Holloway does not intend to update or revise any such forward-looking
information should its assumptions and estimates change.

SOURCE: HOLLOWAY LODGING REAL ESTATE INVESTMENT TRUST

For further information:

Please contact Michael Rapps, Chairman, or Jane Rafuse, Chief Financial Officer, at (902) 404-3499