BOSTON PIZZA ROYALTIES INCOME FUND ANNOUNCES 2024 FOURTH QUARTER AND ANNUAL RESULTS AND FRANCHISE SALES OF $931.7 MILLION FOR THE YEAR

CNW Group

Fri, Feb 14, 2025, 5:30 AM 28 min read

Highest ever fourth quarter and annual Franchise Sales¹ of $234.2 million for the Period and $931.7 million for the Year, representing increases of 2.9% and 0.6%, respectively, versus the same periods one year ago.
Same Restaurant Sales² of 3.4% for the Period and 0.9% for the Year.
Cash flows generated from operating activities of $9.4 for the Period and $38.1 million for the Year, representing increases of 1.4% and 0.5%, respectively, versus the same periods one year ago.
Distributable Cash³ increased 1.5% for the Period and decreased 0.9% for the Year, and Distributable Cash per Unit⁴ increased 1.4% for the Period and decreased 0.2% for the Year.
Payout Ratio⁵ of 118.4% for the Period and 99.9% for the Year. Cash balance at the end of the Period was $4.6 million.
On February 13, 2024, the Fund increased its monthly distribution rate to $0.113 per unit of the Fund ("Unit") for the January 2024 distribution from the previous monthly rate of $0.107 per Unit, being an increase of $0.006 per Unit or 5.6%. On December 9, 2024, the Fund increased its monthly distribution rate for the second time in 2024 to $0.115 per Unit for the November 2024 distribution, being an increase of $0.002 per Unit or 1.8%.
On December 9, 2024, the Fund also announced a special cash distribution to unitholders of $0.075 per Unit.
On February 11, 2025, the trustees of the Fund declared a distribution for the period of January 1, 2025 to January 31, 2025 of $0.115 per Unit, which will be payable on February 28, 2025 to unitholders of the Fund ("Unitholders") of record on February 21, 2025.

VANCOUVER, BC, Feb. 14, 2025 /CNW/ - Boston Pizza Royalties Income Fund (the "Fund") and Boston Pizza International Inc. ("BPI") reported financial results today for the fourth quarter period from October 1, 2024 to December 31, 2024 (the "Period") and January 1, 2024 to December 31, 2024 (the "Year"). A copy of this press release, the audited annual consolidated financial statements and related management's discussion and analysis ("MD&A") of the Fund and BPI are available at www.sedarplus.ca and www.bpincomefund.com. The Fund will host a conference call to discuss the results on February 14, 2025 at 8:30 am Pacific Time (11:30 am Eastern Time). The call can be accessed by dialling 1-844-763-8274 or +1-647-484-8814. A replay will be available until March 14, 2025 by dialling 1-855-669-9658 or +1-412-317-0088 and entering the access code: 2489857 followed by the # sign. The replay will also be available at www.bpincomefund.com. Capitalized terms used in this press release that are not otherwise defined have the meanings ascribed to them in the Fund's MD&A for the Period and the Year.

"In the fourth quarter, Boston Pizza delivered its strongest performance of the year in terms of year-over-year growth, capping off the highest year for total franchise sales," said Jordan Holm, President of BPI. "Effective promotions were instrumental in Boston Pizza overcoming macroeconomic challenges faced in the earlier quarters of the Year. As we enter 2025, we remain vigilant in monitoring the evolving trade landscape, its potential impact on Boston Pizza restaurants in Canada and adapting the business accordingly. We are encouraged by the momentum in our business and remain focused on enhancing guest experiences, supporting our franchisees, and driving sustainable long-term growth through innovation and operational excellence."

PERIOD AND YEAR RESULTS

SRS, a key driver of distribution growth for Unitholders, was 3.4% for the Period compared to 0.6% reported in the fourth quarter of 2023. SRS for the Period was principally due to menu price increases. SRS was 0.9% for the Year compared to 8.7% reported in 2023. For the Year, SRS was principally due to menu prices increases, partially offset by macroeconomic challenges faced by the full-service restaurant industry.

Franchise Sales of Boston Pizza restaurants in the Royalty Pool were $234.2 million for the Period compared to $227.7 million for the fourth quarter of 2023. The $6.5 million increase in Franchise Sales for the Period was primarily due to positive SRS. Franchise Sales of Boston Pizza restaurants in the Royalty Pool were $931.7 million for the Year compared to $925.7 million in 2023. The $6.0 million increase in Franchise Sales for the Year was primarily due to positive SRS.

The Fund's net and comprehensive income was $6.6 million for the Period compared to $5.2 million for the fourth quarter of 2023. The $1.4 million increase in the Fund's net and comprehensive income for the Period compared to the fourth quarter of 2023 was primarily due to a $1.3 million decrease in fair value loss, a $0.3 million increase in Royalty⁶ and Distribution Income⁷ and a $0.2 million decrease in deferred income tax expense, partially offset by a $0.4 million increase in net interest expense and a $0.1 million increase in current income tax expense. The Fund's net and comprehensive income was $31.9 million for the Year compared to $29.6 million in 2023. The $2.3 million increase in the Fund's net and comprehensive income for the Year compared to 2023 was primarily due to a $4.6 million increase in fair value gain and a $0.3 million increase in Royalty and Distribution Income, partially offset by a $1.7 million increase in deferred income tax expense, a $0.6 million increase in net interest expense and a $0.2 million increase in administrative expenses.

Cash generated from operating activities for the Period was $9.4 million compared to $9.3 million in the fourth quarter of 2023. The increase of $0.1 million was primarily due to an increase in Royalty and Distribution Income of $0.3 million, partially offset by a decrease in changes in working capital of $0.1 million and an increase in income taxes paid of $0.1 million. Cash generated from operating activities for the Year was $38.1 million compared to $37.9 million in 2023. The increase of $0.2 million was primarily due to an increase in Royalty and Distribution Income of $0.3 million and an increase in changes in working capital of $0.2 million, partially offset by an increase in administrative expenses of $0.2 million and an increase in income taxes paid of $0.1 million.

The Fund generated Distributable Cash of $7.5 million for the Period compared to $7.4 million for the fourth quarter of 2023. The increase in Distributable Cash of $0.1 million or 1.5% was primarily due to an increase in cash flows generated from operating activities of $0.1 million. The Fund generated Distributable Cash of $30.4 million for the Year compared to $30.7 million for the same period in 2023. The decrease in Distributable Cash of $0.3 million or 0.9% was primarily due to higher Class B Unit entitlement⁸ of $0.6 million, partially offset by an increase in cash flows generated from operating activities of $0.2 million and lower interest paid on debt of $0.1 million.

The Fund generated Distributable Cash per Unit of $0.351 for the Period compared to $0.346 per Unit for the same period in 2023. The increase in Distributable Cash per Unit of $0.005 or 1.4% was primarily attributable to the increase in Distributable Cash outlined above. The Fund generated Distributable Cash per Unit of $1.429 for the Year compared to $1.432 per Unit in 2023. The decrease in Distributable Cash per Unit of $0.003 or 0.2% was primarily attributable to the decrease in Distributable Cash outlined above, partially offset by fewer Units outstanding compared to the same period in 2023 due to the Fund's normal course issuer bid that was in effect from June 20, 2023 to June 19, 2024 ("NCIB").

The Fund's Payout Ratio for the Period was 118.4% compared to 92.7% in the fourth quarter of 2023. The increase in the Fund's Payout Ratio for the Period was due to distributions paid increasing by $2.1 million or 29.6% as a result of the 2024 Distribution Increases (defined below) and the 2024 Special Distribution (defined below), partially offset by Distributable Cash increasing by $0.1 million or 1.5%. For the Year, the Fund's Payout Ratio was 99.9% compared to 88.6% in 2023. The increase in the Fund's Payout Ratio for the Year was due to distributions paid increasing by $3.2 million or 11.8% as a result of the 2024 Distribution Increases and the 2024 Special Distribution and Distributable Cash decreasing by $0.3 million or 0.9%. Payout Ratio is calculated by dividing the amount of distributions paid during the applicable period by the Distributable Cash for that period. The Fund's Payout Ratio fluctuates quarter-to-quarter depending upon the amount of distributions paid during a quarter and the amount of Distributable Cash generated during that quarter.

DISTRIBUTIONS

During the Period, the Fund declared distributions on the Units in the aggregate amount of $11.3 million or $0.531 per Unit. During the fourth quarter of 2023, the Fund declared distributions on the Units in the aggregate amount of $9.1 million or $0.428 per Unit. During the Period, the Fund paid distributions on the Units in the aggregate amount of $8.9 million or $0.416 per Unit. During the fourth quarter of 2023, the Fund paid distributions on the Units in the aggregate amount of $6.8 million or $0.321 per Unit. The amount of distributions declared and paid during the Period increased by $2.2 million and $2.1 million, respectively, or $0.103 per Unit and $0.095 per Unit, respectively, due to the monthly distribution rate increasing from $0.107 per Unit to $0.113 per Unit commencing with the January 2024 distribution and increasing again from $0.113 per Unit to $0.115 per Unit commencing with the November 2024 distribution (together, the "2024 Distribution Increases"), and the special cash distribution to Unitholders of $0.075 per Unit, which was declared on December 9, 2024 and paid to Unitholders on December 31, 2024 (the "2024 Special Distribution"). During the Year, the Fund declared distributions on the Units in the aggregate amount of $30.5 million or $1.435 per Unit. In 2023, the Fund declared distributions on the Units in the aggregate amount of $27.3 million or $1.274 per Unit. During the Year, the Fund paid distributions on the Units in the aggregate amount of $30.4 million or $1.427 per Unit. In 2023, the Fund paid distributions on the Units in the aggregate amount of $27.2 million or $1.269 per Unit. The amount of distributions declared and paid during the Year increased by $3.2 million and $3.2 million, respectively, or $0.161 per Unit and $0.158 per Unit, respectively, due to the 2024 Distribution Increases and the 2024 Special Distribution, partially offset by fewer Units being outstanding during the Year compared to 2023 due to the Fund's NCIB.

The Fund pays distributions on the Units in respect of any calendar month not later than the last business day of the immediately subsequent month. Consequently, monthly distributions payable by the Fund on the Units in respect of the Period were the October 2024 distribution (which was paid on November 29, 2024), the November 2024 distribution (which was paid on December 31, 2024) and the December 2024 distribution (which was paid on January 31, 2025). Similarly, the distributions payable by the Fund on the Units in respect of any other period are paid in the immediately subsequent month of such period.

On February 11, 2025, the trustees of the Fund declared a distribution for the period of January 1, 2025 to January 31, 2025 of $0.115 per Unit, which will be payable on February 28, 2025 to Unitholders of record on February 21, 2025. Including the January 2025 distribution, which will be paid on February 28, 2025, the Fund will have paid out total distributions of $455.8 million or $27.57 per Unit, which includes 265 monthly distributions and three special distributions.

FINANCIAL SUMMARY

The tables below set out selected information from the Fund's audited annual consolidated financial statements together with other data and should be read in conjunction with the audited annual consolidated financial statements and MD&A of the Fund for the years ended December 31, 2024 and 2023.

For the years ended December 31		2024	2023	2022
(in thousands of dollars – except restaurants, SRS, Payout Ratio and per Unit items)
Number of restaurants in Royalty Pool		372	377	383
Franchise Sales reported by restaurants in the Royalty Pool		931,652	925,655	854,997

Royalty income		37,266	37,026	34,200
Distribution Income		12,242	12,167	11,273
Total revenue		49,508	49,193	45,473
Administrative expenses		(1,713)	(1,489)	(1,390)
Interest expense on debt and financing fees		(3,517)	(3,370)	(3,614)
Interest expense on Class B Unit liability		(4,506)	(3,990)	(3,690)
Interest income		274	276	107
Profit before fair value gain (loss) and income taxes		40,046	40,620	36,886
Fair value gain (loss) on investment in BP Canada LP		11,730	1,364	(2,019)
Fair value (loss) gain on Class B Unit liability		(5,226)	(608)	899
Fair value (loss) gain on Swaps		(2,607)	(1,436)	3,891
Current and deferred income tax expense		(12,071)	(10,374)	(9,074)
Net and comprehensive income		31,872	29,566	30,583

Basic earnings per Unit		1.50	1.38	1.42
Diluted earnings per Unit		1.50	1.34	1.31

Distributable Cash / Distributions / Payout Ratio
Cash flows generated from operating activities		38,122	37,926	34,355
BPI Class B Unit entitlement		(4,459)	(3,865)	(3,679)
Interest paid on debt		(3,277)	(3,404)	(3,576)
Principal repayments on long-term debt		-	-	(1,500)
Current income tax expense		(9,993)	(9,949)	(8,914)
Current income tax paid		10,012	9,961	8,904
Distributable Cash		30,405	30,669	25,590
Distributions paid		30,365	27,172	25,438
Payout Ratio		99.9 %	88.6 %	99.4 %
Distributable Cash per Unit		1.429	1.432	1.189
Distributions paid per Unit		1.427	1.269	1.182

Other
Same Restaurant Sales		0.9 %	8.7 %	30.4 %
Number of restaurants opened		4	1	0
Number of restaurants closed		4	6	6

As at December 31	2024		2023	2022
Total assets		422,888	413,055	413,701
Total liabilities		142,665	134,169	133,123

SUMMARY OF QUARTERLY RESULTS

	Q4 2024	Q3 2024	Q2 2024	Q1 2024
(in thousands of dollars – except restaurants, SRS, Payout Ratio and per Unit items)
Number of restaurants in Royalty Pool	372	372	372	372
Franchise Sales reported by restaurants in the Royalty Pool	234,215	238,613	236,792	222,032

Royalty income	9,369	9,544	9,472	8,881
Distribution Income	3,077	3,135	3,111	2,919
Total revenue	12,446	12,679	12,583	11,800
Administrative expenses	(401)	(379)	(497)	(436)
Interest expense on debt and financing fees	(870)	(887)	(932)	(828)
Interest expense on Class B Unit liability	(1,681)	(1,033)	(1,063)	(729)
Interest income	68	71	69	66
Profit before fair value (loss) gain and income taxes	9,562	10,451	10,160	9,873
Fair value (loss) gain on investment in BP Canada LP	(382)	8,511	1,473	2,128
Fair value gain (loss) on Class B Unit liability	170	(3,792)	(656)	(948)
Fair value (loss) gain on Swaps	(200)	(1,923)	(672)	188
Current and deferred income tax expense	(2,593)	(3,863)	(2,841)	(2,774)
Net and comprehensive income	6,557	9,384	7,464	8,467

Basic earnings per Unit	0.31	0.44	0.35	0.40
Diluted earnings per Unit	0.28	0.44	0.33	0.37

Distributable Cash / Distributions / Payout Ratio
Cash flows generated from operating activities	9,419	9,990	9,613	9,100
BPI Class B Unit entitlement	(1,097)	(1,195)	(1,095)	(1,072)
Interest paid on debt	(840)	(758)	(871)	(808)
Current income tax expense	(2,523)	(2,584)	(2,521)	(2,365)
Current income tax paid	2,520	2,660	2,370	2,462
Distributable Cash	7,479	8,113	7,496	7,317
Distributions paid	8,852	7,214	7,213	7,086
Payout Ratio	118.4 %	88.9 %	96.2 %	96.8 %
Distributable Cash per Unit	0.351	0.381	0.352	0.344
Distributions paid per Unit	0.416	0.339	0.339	0.333

Other
Same Restaurant Sales	3.4 %	(0.6 %)	1.7 %	(1.0 %)
Number of restaurants opened	2	0	1	1
Number of restaurants closed	0	1	0	3

SUMMARY OF QUARTERLY RESULTS (continued)

	Q4 2023	Q3 2023	Q2 2023	Q1 2023
(in thousands of dollars – except restaurants, SRS, Payout Ratio and per Unit items)
Number of restaurants in Royalty Pool	377	377	377	377
Franchise Sales reported by restaurants in the Royalty Pool	227,665	240,139	233,650	224,201

Royalty income	9,106	9,606	9,346	8,968
Distribution Income	2,992	3,155	3,071	2,949
Total revenue	12,098	12,761	12,417	11,917
Administrative expenses	(347)	(350)	(401)	(391)
Interest expense on debt and financing fees	(839)	(838)	(843)	(850)
Interest expense on Class B Unit liability	(1,321)	(1,055)	(982)	(632)
Interest income	57	72	79	68
Profit before fair value (loss) gain and income taxes	9,648	10,590	10,270	10,112
Fair value gain (loss) on investment in BP Canada LP	928	(7,857)	8,511	(218)
Fair value (loss) gain on Class B Unit liability	(414)	3,501	(3,792)	97
Fair value (loss) gain on Swaps	(2,250)	333	1,373	(892)
Current and deferred income tax expense	(2,695)	(1,673)	(3,576)	(2,430)
Net and comprehensive income	5,217	4,894	12,786	6,669

Basic earnings per Unit	0.25	0.23	0.59	0.31
Diluted earnings per Unit	0.24	0.06	0.59	0.24

Distributable Cash / Distributions / Payout Ratio
Cash flows generated from operating activities	9,288	9,659	9,759	9,220
BPI Class B Unit entitlement	(1,081)	(740)	(1,006)	(1,038)
Interest paid on debt	(817)	(825)	(848)	(914)
Current income tax expense	(2,445)	(2,603)	(2,511)	(2,390)
Current income tax paid	2,424	2,770	2,456	2,311
Distributable Cash	7,369	8,261	7,850	7,189
Distributions paid	6,830	6,848	6,909	6,585
Payout Ratio	92.7 %	82.9 %	88.0 %	91.6 %
Distributable Cash per Unit	0.346	0.387	0.365	0.334
Distributions paid per Unit	0.321	0.321	0.321	0.306

Other
Same Restaurant Sales	0.6 %	5.3 %	6.6 %	25.7 %
Number of restaurants opened	1	0	0	0
Number of restaurants closed	4	0	1	1

SHORT-TERM OUTLOOK

The success of the Fund, BPI, BP Canada LP, and Boston Pizza Restaurants, including the amount of Franchise Sales, Royalty, Distributions, and cash available for distribution to Unitholders, depends on both consumer demand and restaurant-level operations. Consumer demand is driven by consumer confidence and discretionary spending, both of which are influenced by macroeconomic factors such as inflation and interest rates, wage growth and unemployment levels, , recession risks, competition within the restaurant industry, evolving consumer preferences, changes in taxation, and major geopolitical developments, including tariffs. At the restaurant level, success is also impacted by supply chain disruptions, labor availability, rising input costs, and other operational challenges. Despite these obstacles, Boston Pizza restaurants have consistently generated strong Franchise Sales by providing guests with appealing dining options that emphasize quality, value, and convenience, both on-premise and off-premise. BPI, BP Canada LP, and Boston Pizza restaurants have demonstrated adaptability in navigating changing economic conditions and challenging operating environments. BPI's management remains proactive and committed to adjusting its business strategy to effectively address these challenges and sustain positive sales momentum in 2025.

The trustees of the Fund will continue to closely monitor the Fund's available cash balances and distribution levels to maintain a stable and sustainable return for the Unitholders.

The financial information relating to BPI (the "BPI Financial Information") contained in this press release has been derived from the financial statements and management's discussion and analysis of BPI (the "BPI Disclosures"), which have been filed by the Fund on behalf of BPI pursuant to an undertaking dated July 9, 2002 provided by BPI to the various securities commissions in Canada. BPI's senior management prepares the BPI Disclosures and provides them to the Fund for filing. The auditors of BPI report to the sole shareholder of BPI, and not to the trustees or Unitholders of the Fund. The Fund does not own, control, or consolidate BPI and therefore, the Fund's disclosure controls and procedures and its internal controls over financial reporting do not encompass BPI or BPI's internal controls over financial reporting. The BPI Disclosures are the responsibility of BPI and its directors and officers and not the Fund and its trustees and officers. The Fund provides no assurances as to its accuracy or completeness. The Fund disclaims any and all liability for the BPI Financial Information.

Forward Looking Information

Certain information in this press release constitutes "forward-looking information" that involves known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of the Fund, Boston Pizza Holdings Trust, Boston Pizza Royalties Limited Partnership, Boston Pizza Holdings Limited Partnership, Boston Pizza Holdings GP Inc., Boston Pizza GP Inc., BPI, BP Canada LP, Boston Pizza Canada Holdings Inc., Boston Pizza Canada Holdings Partnership, Boston Pizza restaurants, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Fund or its trustees expect or anticipate will or may occur in the future, including such things as, our continued vigilance in monitoring the evolving trade landscape, the potential impact on Boston Pizza Restaurants in Canada and adapting the business accordingly, our continued focus on enhancing guest experiences, supporting our franchisees, and driving sustainable long-term growth through innovation and operational excellence, the success of BPI, BP Canada LP and Boston Pizza restaurants, and the amount of Franchise Sales, Royalty, Distribution Income and Distributable Cash available for distribution to Unitholders, depending on both consumer demand and restaurant-level operations, consumer demand being driven by consumer confidence and discretionary spending, both of which are influenced by macroeconomic factors such as inflation and interest rates, wage growth and unemployment levels, recession risks, competition within the restaurant industry, evolving consumer preferences, changes in taxation and major geopolitical developments, including tariffs, restaurant-level success being impacted by supply chain disruptions, labour availability, rising input costs, and other operational challenges, BPI's management remaining proactive and committed to adjusting its business strategy to effectively address challenges and sustain positive sales momentum in 2025, the trustees of the Fund continuing to closely monitor the Fund's available cash balances and distribution levels to maintain a stable and sustainable return for the Unitholders, and other such matters are forward-looking information. When used in this press release, forward-looking information may include words such as "anticipate", "estimate", "may", "will", "expect", "believe", "plan", "should", "continue" and other similar terminology. The material factors and assumptions used to develop the forward-looking information contained in this press release include the following: the Fund maintaining the same distribution policy, expectations related to future general economic conditions, expectations related to guest traffic and average guest cheques, expectations related to the resiliency of the Boston Pizza system, the impact of and response to changing competitive landscapes and guest behaviours, strategies and efforts to strive for profitability of BPI, BP Canada LP and Boston Pizza Restaurants, ability to maintain a stable supply chain, ability to attract and retain qualified employees, key personnel and qualified franchisees and operators, and Boston Pizza restaurants maintaining operational excellence. Risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by the forward-looking information contained herein, relate to (among others): competition, demographic trends, business and economic conditions, interest rates and inflationary pressures, legislation and regulation, reliance on operating revenues, financial reporting and accounting controls, policies and practices, the results of operations and financial condition of BPI, BP Canada LP and the Fund, labour availability, cost and efficiency, extreme weather events, as well as those factors discussed under the heading "Risks and Uncertainties" in the most recent Annual Information Form of the Fund. This information reflects current expectations regarding future events and operating performance and speaks only as of the date of this press release. Except as required by law, neither the Fund nor BPI assumes any obligation to update previously disclosed forward-looking information. For a complete list of the risks associated with forward-looking information and the Fund's business, please refer to the "Risks & Risk Management" and "Note Regarding Forward-Looking Information" sections of the Fund's MD&A for the Period and Year, a copy of which is available at www.sedarplus.ca and www.bpincomefund.com.

The trustees of the Fund have approved the contents of this news release.

^® Boston Pizza Royalties Limited Partnership. All Boston Pizza registered Canadian trademarks and unregistered Canadian trademarks containing the words "Boston", "BP", and/or "Pizza" are trademarks owned by the Boston Pizza Royalties Limited Partnership and licensed by the Boston Pizza Royalties Limited Partnership to Boston Pizza International Inc. © Boston Pizza International Inc. 2025.

__________________________
Notes – Non-GAAP, Specified Financial Measures and Other Information

1	"Franchise Sales" is the basis upon which Royalty and Distribution Income are payable, and means the gross revenue: (i) of the corporate Boston Pizza restaurants in Canada owned by BPI that are in the Royalty Pool; and (ii) reported to BP Canada LP by franchised Boston Pizza restaurants in Canada that are in the Royalty Pool, without audit or other form of independent assurance, and in the case of both (i) and (ii), after deducting revenue from the sale of liquor, beer, wine and revenue from BP Canada LP approved national promotions and discounts and excluding applicable sales and similar taxes. Nevertheless, BP Canada LP periodically conducts audits of the Franchise Sales reported to it by its franchisees, and the Franchise Sales reported herein include results from sales audits of earlier periods.
2	"Same Restaurant Sales" or "SRS" is a supplementary financial measure under NI 52-112 and therefore may not be comparable to similar measures presented by other issuers. The Fund defines SRS as the change in Franchise Sales of Boston Pizza restaurants in the Royalty Pool as compared to the Franchise Sales for the same period in the previous year (where restaurants were open for a minimum of 24 months). The Fund believes that SRS provides Unitholders meaningful information regarding the performance of Boston Pizza restaurants.
3	"Distributable Cash" is a non-GAAP financial measure under NI 52-112. Distributable Cash is not a standardized financial measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. The Fund defines Distributable Cash to be, in respect of any particular period, the Fund's cash flows generated from operating activities for that period (being the most comparable financial measure in the Fund's primary financial statements) minus (a) BPI's entitlement in respect of its Class B general partner units of Royalties LP (the "Class B Units") in respect of the period (see note 8 below), minus (b) interest paid on debt during the period, minus (c) principal repayments on debt that are contractually required to be made during the period, minus (d) the current income tax expense in respect of the period, plus (e) current income tax paid during the period (the sum of (d) and (e) being "SIFT Tax on Units"). Management believes that Distributable Cash provides investors with useful information about the amount of cash the Fund has generated and has available for distribution on the Units in respect of any period. The tables in the "Financial Highlights" section of this press release provide a reconciliation from this non-GAAP financial measure to cash flows generated from operating activities, which is the most directly comparable IFRS measure. Current income tax expense in respect of any period is prepared using reasonable and supportable assumptions (including that the base rate of SIFT Tax will not increase throughout the calendar year and that certain expenses of the Fund will continue to be deductible for income tax purposes), all of which reflect the Fund's planned courses of action given management's judgment about the most probable set of economic conditions. There is a risk that the federal government of Canada could increase the base rate of SIFT Tax or that applicable taxation authorities could assess the Fund on the basis that certain expenses of the Fund are not deductible. Investors are cautioned that if either of these possibilities occurs, then the actual results for this component of Distributable Cash may vary, perhaps materially, from the amounts used in the reconciliation.
4	"Distributable Cash per Unit" is a non-GAAP ratio under NI 52-112. Distributable Cash per Unit is not a standardized financial measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. The Fund defines Distributable Cash per Unit for any period as the Distributable Cash generated in that period divided by the weighted average number of Units outstanding during that period. Management believes that Distributable Cash per Unit provides investors with useful information regarding the amount of cash per Unit that the Fund has generated and has available for distribution in respect of any period.
5	"Payout Ratio" is a non-GAAP ratio under NI 52-112. Payout Ratio is not a standardized financial measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. The Fund defines Payout Ratio for any period as the aggregate distributions paid by the Fund during that period divided by the Distributable Cash generated in that period. Management believes that Payout Ratio provides investors with useful information regarding the extent to which the Fund distributes cash generated on Units.
6	Boston Pizza Royalties Limited Partnership ("Royalties LP") licenses BPI the right to use various Boston Pizza trademarks in return for BPI paying Boston Pizza Royalties Limited Partnership a royalty equal to 4% of Franchise Sales of Boston Pizza restaurants (the "Royalty") in the Fund's royalty pool (the "Royalty Pool").
7	"Distribution Income" is income received indirectly by the Fund on Class 1 LP Units and Class 2 LP Units of BP Canada LP. See the "Overview – Purpose of the Fund / Sources of Revenue" section of the Fund's MD&A for the Period and the Year for more details.
8	"BPI Class B Unit entitlement" is a supplementary financial measure under NI 52-112 and therefore may not be comparable to similar measures presented by other issuers. The BPI Class B Unit entitlement is the interest expense on Class B Units in respect of a period plus management's estimate of how much cash BPI would be entitled to receive pursuant to the limited partnership agreement governing Royalties LP (a copy of which is available on www.sedarplus.ca) on its Class B Units if Royalties LP fully distributed any residual cash generated in respect of that period after the Fund pays interest on long-term debt, principal repayments on long-term debt and SIFT Tax on Units in respect of that period. Management believes that the BPI Class B Unit entitlement is an important component in calculating Distributable Cash since it represents the amount of residual cash generated that BPI would be entitled to receive and therefore would not be available for distribution to Unitholders. Management prepares such estimate using reasonable and supportable assumptions that reflect the Fund's planned courses of action given management's judgment about the most probable set of economic conditions.