Avenir Diversified Income Trust
TSX : AVF.UN

Avenir Diversified Income Trust

December 20, 2006 11:57 ET

Avenir Diversified Income Trust 2007 Budget Update

CALGARY, ALBERTA--(CCNMatthews - Dec. 20, 2006) -

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

Avenir Diversified Income Trust (the "Trust") (TSX:AVF.UN) is pleased to give an update with respect to its 2007 Budget and a new real estate development.

On December 11, 2006 the Trust's Board of Directors approved the 2007 budget for the Trust which projects maintaining its target payout ratio of 75% to 80% which takes into account a status quo scenario at current distribution rates with no new external growth required. Currently, each of Avenir's business segments is at or ahead of budget with the fourth and first quarters traditionally Avenir's strongest. The 2007 base budget provides for a cash flow split of approximately 40% oil and gas production and 60% financial services and real estate based on our current projections for commodity prices and the US/CDN exchange rate. Additionally, taking into account the Trust's available tax pool shelters, the Trust does not expect to pay corporate income tax in 2007 nor in the following four years until the imposition of the proposed tax on trusts in 2011. The 2007 base budget did not include planning for 2007 acquisitions in view of the trust tax uncertainty; however with the recent release of the "undue expansion" guidelines, the Trust will now be in a better position to determine how the proposed legislation may affect its go-forward business model.

The Trust is also pleased to announce the start of construction on a new 43,000 square foot Landmark Theatre development project in Red Deer, Alberta. The $12.5 million project is expected to provide a levered annual return of approximately 11.3% to the Trust and be operational in September 2007. The Landmark Theatre lease will be for a 20 year term (cross-collateralized across all the Trust's Landmark locations). Prior to this development, the Trust has approximately 625,000 square feet of leasable properties with a 100% occupancy rate.

The Trust is a TSX listed diversified royalty and business trust which combines the cash flow streams from the three business segments of Energy, Financial Services and Real Estate with a target payout ratio of 75% to 80% in order to provide sustainable distributions.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Forward Looking Statements

Certain information regarding Avenir Diversified Income Trust set forth in this document, including management's assessment of the Trust's future plans and operations contains forward looking statements that involve substantial known and unknown risks and uncertainties. These forward looking statements are subject to numerous risks and uncertainties, some of which are beyond the Trust's and management's control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates, imperfection of reserve estimates, environmental risks, industry competition, availability of qualified personnel and management, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources. The Trust's actual results, performance or achievement could differ materially from those expressed in or implied by, these forward looking statements and accordingly, no assurance can be given that any of the events anticipated to occur or transpire from the forward looking statements will provide what, if any benefits to the Trust.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Avenir Diversified Income Trust
    William Gallacher
    President & CEO
    (403) 237-9949
    (403) 237-0903 (FAX)
    or
    Avenir Diversified Income Trust
    Gary Dundas
    Vice President & CFO
    (403) 237-9949
    (403) 237-0903 (FAX)
    or
    Avenir Diversified Income Trust
    Suite 300, 808 - Street S.W.
    Calgary, Alberta T2P 1M9