Boston Pizza Royalties Income Fund (BPF) 2024年年度報告「TSX」.pdf

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1、1BOSTON PIZZA BOSTON PIZZA ROYALTIES INCOME FUNDANNUAL REPORT 20241HISTORY OF BOSTON PIZZA Originating in Edmonton,Alberta in 1964,Boston Pizza and Spaghetti House was founded by Greek immigrant Gus Agioritis.The concept quickly gained popularity,paving the way for a franchise.The first franchisee w

2、as former R.C.M.P.officer,Jim Treliving,who opened his initial restaurant in Penticton,British Columbia in 1968.This venture brought him into contact with chartered accountant George Melville,who became Jim Trelivings eventual business partner.Over the following decade,the duo cultivated a network o

3、f 16 restaurants in British Columbia,gaining invaluable experience that would later propel them into their roles as franchisors of Boston Pizza International Inc.(“BPI”).In 1983,Jim Treliving and George Melville acquired BPI along with its 44 restaurants from the then owner Ron Coyle.Promptly divest

4、ing their own restaurants to franchisees,they instituted systems and standards conducive to sustained national growth.The expansion into Eastern Canada became a reality in September 1998,with the opening of the first location in Ottawa,Ontario.In 2017,as part of a meticulously planned succession,Jim

5、 Treliving and George Melville restructured their jointly-owned assets,resulting in Jim Treliving assuming full ownership of BPI.There are currently over 370 Boston Pizza restaurants in Canada,stretching from Victoria to St.Johns,with all but one of these restaurants being owned and operated by inde

6、pendent franchisees.Boston Pizza Royalties Income Fund(the“Fund”)was established in 2002 and began trading on the Toronto Stock Exchange(“TSX”)under the symbol BPF.UN following its initial public offering on July 17 of that year.As part of its initial public offering,the Fund indirectly acquired the

7、 Canadian trademarks owned by BPI and licensed their use back to BPI in exchange for which BPI pays the Fund 4.0%of franchise sales from Boston Pizza restaurants in the Funds royalty pool.In 2015,the Fund increased its interest in franchise sales from Boston Pizza restaurants in the Funds royalty po

8、ol from 4.0%to 5.5%.In 2022,the Fund proudly celebrated its 20th anniversary on the TSX.As of January 1,2025,there are 372 Boston Pizza restaurants in the Funds royalty pool.From its humble beginnings to becoming a beloved institution,Boston Pizza has been a gathering place for communities across Ca

9、nada for over 60 years,providing guests with much needed opportunities to share food,share life and connect.In every Boston Pizza location,guests enjoy a comfortable atmosphere,professional service and an appealing and diverse menu.Whether its a business lunch,family dinner or watching the game with

10、 friends,Boston Pizza provides its guests the opportunity to enjoy great food in a relaxed and inviting setting.In addition to its welcoming dine-in experience,Boston Pizza has built a strong takeout and delivery business,which accounted for over 20%of total sales across the chain in 2024.It is this

11、 combination of key ingredients that has enabled Boston Pizza to serve more guests in more locations than any other full-service restaurant brand in Canada.2024 HIGHLIGHTS 2024 was the highest year for total Franchise Sales*(see page 13).Annual Franchise Sales of$931.7 million for the Year,represent

12、ing an increase of 0.6%versus the same period one year ago.System-Wide Gross Sales*(see page 100)of$1.2 billion,representing an increase of 0.8%compared to one year ago.Same Restaurant Sales*(see page 9)of 0.9%for the Year.Cash flows generated from operating activities of$38.1 million for the Year r

13、epresenting an increase of 0.5%versus the same period one year ago.Distributable Cash*(see page 9)decreased 0.9%for the Year,and Distributable Cash per Unit*(see page 9)decreased 0.2%for the Year.Payout Ratio*(see page 9)of 99.9%for the Year.Cash balance at the end of the Year was$4.6 million.The Fu

14、nd increased its monthly distribution rate with the January 2024 distribution from$0.107 to$0.113 per unit of the Fund(“Unit”),and increased its monthly distribution rate for the second time with the November 2024 distribution to$0.115 per Unit.In December 2024,the Fund announced a special cash dist

15、ribution to unitholders of$0.075 per Unit.*Non-GAAP Financial Measure,Non-GAAP Ratio or Supplementary Financial Measure under National Instrument 52-112.See page reference for details60.0%80.0%100.0%120.0%020.0%40.0%Distributable Cash per UnitDistributions Paid per UnitPayout Ratio(%)Cash per Unit($

16、)Payout Ratio(%)A special distribution of$0.20 per unit was declared in December 2020 and paid in January 2021.The Payout Ratio is calculated by dividing the amount of distributions paid during the applicable period by the Distributable Cash for that period.Accordingly,the Payout Ratio for 2020 does

17、 not factor in the special distribution that was paid on January 29,2021 even though the cash generated to fund the special distribution was generated during 2020 as a result of monthly distributions on Units being temporarily suspended in respect of March through August of 2020.If the special distr

18、ibution was included in the calculation of Payout Ratio in the year it was declared,the Payout Ratio would be 94.6%for 2020 and 88.4%for 2021.0.00.30.60.91.21.51.8$1.189$1.182$1.269$0.756$0.516$0.950$1.0402020202120222023202499.4%88.6%68.2%+109.5%+$1.432$1.429$1.42799.9%DISTRIBUTIONS PER UNIT AND PA

19、YOUT RATIO32MESSAGE FROM THE CHAIRMAN OFBOSTON PIZZA ROYALTIES INCOME FUNDOn behalf of the trustees,I am delighted to present the 2024 Annual Report for Boston Pizza Royalties Income Fund(the“Fund”).As we reflect on the past year,we are proud of how the Fund has successfully navigated challenges,dem

20、onstrating resilience and progress in our commitment to delivering sustainable growth and value to our unitholders.The restaurant industry faced significant hurdles throughout 2024,shaped by high interest rates and inflationary pressures that influenced consumer behavior,particularly discretionary s

21、pending on dining out.Despite these economic headwinds,Boston Pizzas operations showcased remarkable adaptability and strength,reinforcing its position as a leader in the casual dining sector.We are pleased to report that Boston Pizza achieved solid franchise sales performance throughout 2024,with r

22、esults aligning closely with previous years.This resilience translated into strong royalty income and distribution payments to the Fund,enabling the trustees to increase cash distributions to unitholders.On February 13,2024,the trustees raised the monthly distribution to$0.113 per unit for January 2

23、024,up from the prior rate of$0.107 per unit,an increase of 5.6%.Later in the year,on December 9,2024,the trustees announced a further increase to$0.115 per unit for November 2024,representing an additional 1.8%increase.To further share the Funds success,the trustees declared a special cash distribu

24、tion of$0.075 per unit on December 9,2024,which was paid on December 31,2024.These decisions reflect our confidence in the ongoing performance of the Boston Pizza system and our commitment to maintaining stable and sustainable returns for unitholdersThe trustees continue to uphold the highest standa

25、rds of governance,emphasizing accountability,ethical practices,and strategic foresight.During 2024,we strengthened our governance framework and disclosure documents,ensuring alignment with regulatory standards and best practices.With increasing global focus on climate-related risks and opportunities

26、,the trustees have begun preparations for potential mandatory reporting requirements in Canada.This proactive approach underscores our commitment to long-term sustainability and responsible business practices.The Audit Committee has also played a vital role in overseeing risk management,internal con

27、trols,and financial reporting,ensuring transparency and integrity across all operations.In addition,significant work has been undertaken to enhance risk disclosures in the Funds current Annual Information Form and Managements Discussion and Analysis,reflecting an elevated focus on identifying and co

28、mmunicating key risks to stakeholders.This effort reaffirms our dedication to providing comprehensive and transparent public reporting.On behalf of the trustees,I would like to thank unitholders for their trust and continued support and express appreciation to Boston Pizza International Inc.,Boston

29、Pizza franchisees,and their dedicated employees for their hard work and commitment to excellence.As we look ahead,the trustees remain steadfast in their focus on strategic oversight,operational excellence,and delivering sustainable value to unitholders.By leveraging strong governance,a resilient bus

30、iness model,and a commitment to transparency and collaboration with all our key stakeholders,the Fund is well-positioned to navigate future challenges and seize opportunities within the dynamic restaurant industry.Marc GuayChairman,Boston Pizza Royalties Income FundTABLE OF CONTENTSMessage from the

31、Chairman of Boston Pizza Royalties Income Fund 3Message from the President of Boston Pizza International Inc.4BOSTON PIZZA ROYALTIES INCOME FUND 7Managements Discussion&Analysis 8Consolidated Financial Statements 64BOSTON PIZZA INTERNATIONAL INC.99Managements Discussion&Analysis 100Consolidated Fina

32、ncial Statements 14554MESSAGE FROM THE PRESIDENT OFBOSTON PIZZA INTERNATIONAL INC.On behalf of Boston Pizza International Inc.(“BPI”),its board of directors,management team and employees,I am pleased to present our 2024 Annual Report.This report covers the fiscal year-ended December 31,2024(the“Year

33、”).HIGHLIGHTS Annual system-wide gross sales of$1.2 billion for the Year,representing an increase of 0.5%,versus the same period one year ago.Same restaurant sales of 0.9%for the Year.Four new Boston Pizza restaurants opened during the Year.Raised approximately$1.9 million in 2024 for Boston Pizza F

34、oundation,bringing the aggregate total to nearly$40 million raised and donated since the inception of the Boston Pizza Foundation in 1990.Boston Pizza restaurants achieved the highest total annual sales ever recorded in 2024,solidifying Boston Pizza as Canadas number one full-service restaurant comp

35、any.Readers are cautioned that they should refer to the annual audited consolidated financial statements and Managements Discussion and Analysis of BPI for the fiscal year-ended December 31,2024,available on SEDAR+at www.sedarplus.ca and on the Boston Pizza Royalties Income Funds website at ,for a f

36、ull description of BPIs financial results.OPERATIONAL HIGHLIGHTSAs we reflect on 2024,a year marked by macroeconomic challenges,Boston Pizza remains a resilient and innovative leader in the full-service restaurant industry.Despite high interest rates,inflationary pressures,and evolving consumer beha

37、vior,our steadfast dedication to our guests,franchisees,and communities has allowed us to successfully navigate these challenges.Notably,we celebrated the opening of four new Boston Pizza locations,underscoring our continued growth and commitment to expansion.2024 was a pivotal year for our organiza

38、tion,marked by strides in sustainability,innovation,and operational excellence.We are proud of the progress weve made with the evolving priorities of our guests and communities.One of the key highlights of the Year was the creation of our inaugural 2023/2024 Brand Impact Report.This comprehensive re

39、port outlines our commitment to being good neighbours,looking out for people and the places we live.Through this report,we demonstrate our commitment to transparency,accountability,and continuous improvement in areas that matter most to our guests and communities.At Boston Pizza,we take great pride

40、in supporting the communities we serve.In 2024,the Boston Pizza Foundation introduced a new“Looking After Local”program,designed to have all Boston Pizza restaurants support the needs of their immediate neighbourhoods and ensure all funds they raise stay in the local communities they serve.In additi

41、on,we recognized the growing importance of robust cybersecurity measures in protecting our business and our guests.In 2024,we strengthened our cybersecurity framework,deploying advanced technologies and best practices to safeguard sensitive information within our corporate offices and restaurant cha

42、in.These measures not only protect our data but also ensure uninterrupted and secure service for our guests.The first quarter of 2024 presented certain macroeconomic challenges for the full-service restaurant industry.Prevailing economic conditions,characterized by high interest rates and inflationa

43、ry pressures influenced consumer behavior,impacting discretionary spending and leading to a cautious approach towards dining out.Despite these obstacles,we had solid sales in the first quarter underscoring the resilience of our business.We began the first quarter with the launch of our“Pasta Tuesday

44、 All Month Long”promotion,offering guests an exceptional value and variety of pasta dishes.On Valentines Day,our Paper Hearts fundraising program and Heart-Shaped Pizza promotion raised over$570,000 for local charities,underscoring Boston Pizzas commitment to giving back.We achieved positive sales g

45、rowth in the second quarter of 2024,despite the restaurant industry facing headwinds from high interest rates and inflation.Amid these economic challenges,our solid performance was fueled by the success of our dynamic“Team Up for the Win”campaign during the hockey and basketball playoffs.This promot

46、ion elevated the Boston Pizza Sports Bar experience with an enticing array of new shareable menu items and innovative cocktails,resonating with our guests.Additionally,the launch of our refreshed main menu in May 2024,featuring a range of exciting new dishes,further enriched the guest experience and

47、 reinforced our dedication to culinary innovation.April 2024 marked the beginning of our 60th anniversary celebrations,uniting franchisees,suppliers,and corporate employees at our franchisee conference.From our humble beginnings to becoming a beloved institution,Boston Pizza has been a gathering pla

48、ce for communities across Canada for 60 years.To commemorate this special occasion,during the second quarter,Boston Pizza launched an exciting summer patio campaign inviting Canadians to join the festivities.We sustained stable sales throughout the third quarter of 2024,thanks to effective seasonal

49、promotions.The summer patio campaign continued to draw guests at the start of the third quarter.As the season shifted,we introduced a fall-inspired menu alongside a football-themed menu,offering indulgent new items tailored to both fall and football fans alike.Our popular BP Kids Cards promotion rai

50、sed over$1,000,000 for the Boston Pizza Foundation,reflecting a more than 12%increase from 2023.The third quarter concluded with a successful Kids Eat Free promotion,reinforcing our commitment to family dining.The fourth quarter of 2024 delivered the strongest performance of the Year in terms of yea

51、r-over-year growth,capping off the highest year for total franchise sales.We kicked off the fourth quarter with our$15 lunch menu,offering guests a main,side,and drink for just$15.With the NHL season in full swing,we launched our Hockey Night in Canada partnership.This partnership will run throughou

52、t the entire NHL regular season.In addition,our 2024 holiday campaign launched during the fourth quarter,showcasing a celebration of new favourites and innovative pasta dishes.Complementing our holiday menu and Hockey Night in Canada partnership was our annual gift card incentive program.Guests who

53、purchased$50 or more in gift cards received a$10 promo card.We extend our gratitude to our loyal guests for their unwavering support,our dedicated staff and franchisees for their hard work and passion,our business partners for their collaboration,and the incredible communities we have the privilege

54、to serve.Thank you for being an essential part of the Boston Pizza family.As we enter 2025,we remain optimistic about the economic environment.While inflation and interest rates are beginning to stabilize,we recognize the ongoing challenges facing the restaurant industry,including the impact of glob

55、al supply chain disruptions and increased costs associated with cross-border trade.Our focus will remain on delivering exceptional guest experiences,supporting our franchisees,and driving long-term growth through innovation and operational excellence.We are excited to continue building on our legacy

56、 and creating memorable dining experiences for generations to come.On behalf of Boston Pizza International Inc.,Jordan Holm,President,Boston Pizza International Inc.6BOSTON PIZZA ROYALTIES INCOME FUND Managements Discussion&Analysis 8Consolidated Financial Statements 64MESSAGE FROM THE PRESIDENT OFB

57、OSTON PIZZA INTERNATIONAL INC.Forward Looking InformationCertain information in this message 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 Boston Pizz

58、a Royalties Income Fund(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,Boston Pizza Canada Limited Partnership(“BP Canada LP”),Boston Pizza Canada Holdings Inc.,Boston

59、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 message tha

60、t address activities,events or developments that BPI and BP Canada LP expects or anticipates will or may occur in the future,including such things as,BPIs management to demonstrate commitment to transparency,accountability,and continuous improvement in areas that matter most to its guests and commun

61、ities,BPIs management to focus on delivering exceptional guest experiences,supporting franchisees,and driving long-term growth through innovation and operational excellence,BPIs management to continue creating memorable dining experiences for guests,BPIs management remaining optimistic about the eco

62、nomic environment,and other such matters are forward-looking information.When used in this message,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

63、 used to develop the forward-looking information contained in this message include the following:expectations related to future general economic conditions,Boston Pizza restaurants maintaining operational excellence,and supply chain challenges,rising interest rates,and increasing input costs and lab

64、our shortages may continue to negatively impact the restaurant industry.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 informatio

65、n contained herein,relate to(among others):competition,demographic trends,consumer preferences and discretionary spending patterns,business and economic conditions,legislation and regulation,reliance on operating revenues,accounting policies and practices,the results of operations and financial cond

66、ition of BPI and BP Canada LP,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 me

67、ssage.Except as required by law,neither BPI,BP Canada LP nor the Fund assumes any obligation to update previously disclosed forward-looking information.For a complete list of the risks associated with forward-looking information and BPIs and BP Canada LPs business,please refer to the“Risks and Uncer

68、tainties”and“Note Regarding Forward-Looking Information”sections included in the most recent Annual Information Form of the Fund and BPIs Managements Discussion and Analysis for the year ended December 31,2024 available at www.sedarplus.ca and .98MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYA

69、LTIES INCOME FUND For the Period and Year ended December 31,2024 Notes Non-GAAP and Specified Financial Measures 1“Distributable Cash”is a non-GAAP financial measure under National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure(“NI 52-112”).Distributable Cash is not a standardize

70、d 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 Funds cash flows generated from operating activities for that period(being the most comparable financial

71、 measure in the Funds primary financial statements)minus(a)BPIs(as defined below)entitlement in respect of its Class B Units in respect of the period(see note 3 below),minus(b)interest paid on debt during the period,minus(c)principal repayments on debt that are contractually required to be made duri

72、ng 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 gen

73、erated and has available for distribution on the Units in respect of any period.The tables in the“Financial Highlights”section of this MD&A provide a reconciliation from this non-GAAP financial measure to cash flows generated from operating activities,which is the most directly comparable IFRS measu

74、re.Current income tax expense in respect of any period is prepared using reasonable and supportable assumptions(including that the base rate of SIFT Tax(as defined below)will not increase throughout the calendar year and that certain expenses of the Fund will continue to be deductible for income tax

75、 purposes),all of which reflect the Funds planned courses of action given managements 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 Fu

76、nd 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.2“Payout Ratio”is a non-G

77、AAP 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

78、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.3“BPI Class B Unit entitlement”is a supplementary financial measure under NI 52-112 and therefore ma

79、y 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 managements estimate of how much cash BPI would be entitled to receive pursuant to the limited partnership agreement governing Roya

80、lties LP(a copy of which is available on SEDAR+at 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 debt,principal repayments on debt and SIFT Tax on Units in respect of that period.Management

81、 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 es

82、timate using reasonable and supportable assumptions that reflect the Funds planned courses of action given managements judgment about the most probable set of economic conditions.4“Distributable Cash per Unit”is a non-GAAP ratio under NI 52-112.Distributable Cash per Unit is not a standardized finan

83、cial 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.Man

84、agement 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“Same Restaurant Sales”or“SRS”is a supplementary financial measure under NI 52-1

85、12 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 as compared to the Franchise Sales for the same MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Perio

86、d and Year ended December 31,2024 FINANCIAL HIGHLIGHTS The tables below set out selected information from the audited annual consolidated financial statements of Boston Pizza Royalties Income Fund(the“Fund”),which includes the accounts of the Fund,its wholly-owned subsidiaries Boston Pizza Holdings

87、Trust(the“Trust”),Boston Pizza Holdings GP Inc.(“Holdings GP”)and Boston Pizza Holdings Limited Partnership(“Holdings LP”),its 80%owned subsidiary Boston Pizza GP Inc.(“Royalties GP”),and Boston Pizza Royalties Limited Partnership(“Royalties LP”),together with other information and should be read in

88、 conjunction with the audited annual consolidated financial statements of the Fund for the years ended December 31,2024 and December 31,2023.The financial information in the tables included in this Managements Discussion and Analysis(“MD&A”)are reported in accordance with IFRS Accounting Standards(“

89、IFRS”)except as otherwise noted and are stated in Canadian dollars.Capitalized terms used in the tables and notes below are defined elsewhere in this MD&A.For the years ended December 31 2024 2023 2022(in thousands of dollars except restaurants,SRS,Payout Ratio and per Unit items)Number of restauran

90、ts 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

91、 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 Clas

92、s 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 Cash1/Di

93、stributions/Payout Ratio2 Cash flows generated from operating activities 38,122 37,926 34,355 BPI Class B Unit entitlement3 (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 ta

94、x 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 Unit4 1.429 1.432 1.189 Distributions paid per Unit 1.427 1.269 1.182 Other Same Restaurant Sales5 0.9%8.7%30.4%Number of restaurants opened 4

95、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 1110MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 SUMMARY OF QUARTERLY RESULT

96、S 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 Di

97、stribution 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

98、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)

99、(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 en

100、titlement(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%

101、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 MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For

102、 the Period and Year ended December 31,2024 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.1312MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON

103、PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 OVERVIEW This MD&A covers the three-month period from October 1,2024 to December 31,2024(the“Period”)and the twelve-month period from January 1,2024 to December 31,2024(the“Year”)and is dated February 13,2025.It provides addi

104、tional analysis of the operations,financial position and financial performance of the Fund and should be read in conjunction with the Funds applicable audited annual consolidated financial statements and accompanying notes.The audited annual consolidated financial statements of the Fund are in Canad

105、ian dollars and have been prepared in accordance with IFRS except as otherwise noted.Purpose of the Fund/Sources of Revenue The Fund is a limited purpose open-ended trust established in July 2002,and the units of the Fund(the“Units”)trade on the Toronto Stock Exchange under the symbol BPF.UN.The Fun

106、d was originally created to acquire,indirectly through Royalties LP,the Canadian trademarks owned by Boston Pizza International Inc.(“BPI”,and where applicable also includes its wholly-owned subsidiaries)(collectively,the“BP Rights”6)used in connection with the operation of Boston Pizza restaurants

107、in Canada(“Boston Pizza Restaurants”)and the business of BPI,its affiliated entities and franchisees(herein referred to as“Boston Pizza”).In May 2015,the Fund,indirectly through Holdings LP,completed an investment in Boston Pizza Canada Limited Partnership(“BP Canada LP”)to effectively increase the

108、Funds interest in Franchise Sales(as defined below)of Boston Pizza Restaurants in the Royalty Pool(as defined below)by 1.5%,from 4.0%to 5.5%less the pro rata portion payable to BPI in respect of its retained interest in the Fund.BP Canada LP is a limited partnership controlled and operated by BPI an

109、d is the exclusive franchisor of Boston Pizza Restaurants.The Fund has the following principal sources of revenue:Royalty Royalties LP licenses the BP Rights to BPI in return for BPI paying Royalties LP a royalty equal to 4.0%(the“Royalty”)of Franchise Sales of those Boston Pizza Restaurants include

110、d in the Royalty Pool,as defined in the license and royalty agreement dated July 17,2002,as amended on May 9,2005 between Royalties LP and BPI(the“License and Royalty Agreement”).As of December 31,2024,there were 372 Boston Pizza Restaurants in the Royalty Pool,of which approximately 370 were operat

111、ing and open for business to the public.7“Franchise Sales”means the gross revenue:(i)of the corporate Boston Pizza Restaurants owned by BPI that are in the Royalty Pool;and(ii)reported to BP Canada LP by franchised Boston Pizza Restaurants that are in the Royalty Pool,without audit or other form of

112、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 Fr

113、anchise Sales reported to it by its franchisees,and the Franchise Sales reported herein include results from sales audits of earlier periods.Distribution Income Holdings LP holds Class 1 limited partnership units(“Class 1 LP Units”)and Class 2 limited partnership units(“Class 2 LP Units”)of BP Canad

114、a LP,and BPI holds,indirectly through Boston Pizza Canada Holdings Partnership(“BPCHP”),a general partnership owned and controlled by BPI,Class 2 general partnership units 6 BP Rights are the trademarks that as at July 17,2002 were registered or the subject of pending applications for registration u

115、nder the Trademarks Act(Canada)and other trademarks and trade names which are confusingly similar to any of the registered or pending trademarks.The BP Rights purchased do not include the rights outside of Canada to any trademarks or trade names used by BPI or any affiliated entities in its business

116、,and in particular do not include the rights outside of Canada to the trademarks registered or pending registration under the Trademarks Act(Canada).7 Boston Pizza Restaurants may temporarily or permanently close for a variety of reasons.The Royalty Pool is adjusted only once a year on January 1 to

117、add new Boston Pizza Restaurants that opened and to remove Boston Pizza Restaurants that permanently closed.Accordingly,the number of Boston Pizza Restaurants in the Royalty Pool at any time may exceed the number of Boston Pizza Restaurants that are actively operating and open for business to the pu

118、blic.See“Overview-Addition of New Restaurants to Royalty Pool”below for more information regarding adjustments to the Royalty Pool.MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 SUMMARY OF QUARTERLY RESULTS(CONTINUED)Q4 2023 Q3 2

119、023 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 Inc

120、ome 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

121、)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

122、,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

123、)(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

124、 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 1514MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Y

125、ear ended December 31,2024 generated by the New Restaurants less the actual Royalty and Distribution Income lost from the Closed Restaurants,multiplied by one minus the effective tax rate estimated to be paid by the Fund,divided by the yield of the Fund,divided by the weighted average Unit price ove

126、r a specified period.BPI receives 80%of the Additional Entitlements initially,with the balance received when the actual full year performance of the New Restaurants and the actual effective tax rate paid by the Fund are known with certainty(such balance of Units in respect of the increased Royalty,t

127、he“Class B Holdback”,and in respect of the increased Distribution Income,the“Class 2 Holdback”,and collectively,the“Holdback”).BPI receives 100%of the distributions on the Additional Entitlements throughout the year.After the New Restaurants have been part of the Royalty Pool for a full year,an audi

128、t of the Franchise Sales of these restaurants is performed,and the actual effective tax rate paid by the Fund is determined.At such time,an adjustment is made to reconcile distributions paid to BPI and the Additional Entitlements received by BPI.It is possible that on an Adjustment Date,the Net Roya

129、lty and Distribution Income is negative as a result of the estimated Royalty and Distribution Income expected to be generated by the New Restaurants being less than the actual Royalty and Distribution Income that is lost from the Closed Restaurants(the amount by which it is less is the“Deficiency”).

130、In such case,BPI would not receive any Additional Entitlements,however,nor would BPI lose any of the Additional Entitlements previously received by BPI.Rather,on future Adjustment Dates,BPI would be required to make-up the Deficiency by first adding Net Royalty and Distribution Income in an amount e

131、qual to the Deficiency before receiving any further Additional Entitlements(i.e.,BPI only receives Additional Entitlements in respect of the cumulative amount by which Royalty and Distribution Income from New Restaurants exceeds actual Royalty and Distribution Income lost from Closed Restaurants).Ec

132、onomic Uncertainties 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,are dependent upon many economic factors.In 2023 and 2024,Boston Pizza Restaurants were cha

133、llenged,among other things,by impacts of inflation,increases in interest rates,rising input costs,decreased labour availability and changes in consumer demand,some of which impact guest visitation frequencies and guests willingness to accept price increases.However,despite these challenges,Boston Pi

134、zza Restaurants have been able to generate solid Franchise Sales and offer value-based dining options,both on and off-premise,for guests in economically uncertain times.As previously demonstrated,BPI,BP Canada LP and Boston Pizza Restaurants have the ability to adapt to changes in operating environm

135、ents and economic conditions.For additional information regarding economic uncertainties,refer to the“Risks&Uncertainties Risks Related to the Business of BPI and BP Canada LP”section of this MD&A.New Restaurant Openings,Closures and Renovations During the Period,there were two New Restaurants and n

136、o Closed Restaurants.During the Year,there were four New Restaurants and four Closed Restaurants.As well,nine Boston Pizza Restaurants were renovated during the Period and 27 Boston Pizza Restaurants were renovated during the Year.Virtual Brand Starting in August 2023,BPI and BP Canada LP,with the c

137、onsent of Royalties LP,tested a new“virtual brand”called“Moseys Southern BBQ Sandwiches&More”(“Moseys”)in approximately 35 Boston Pizza Restaurants as part of the Boston Pizza system.Moseys features certain BBQ-style sandwiches,sides and accompaniments that are distinct from the core Boston Pizza me

138、nu and can only be ordered and delivered via third-party delivery apps.Moseys is designed to utilize surplus kitchen capacity at Boston Pizza Restaurants and provide incremental sales.All sales that were generated from Moseys have been included in Franchise Sales,and BPI and BP Canada LP paid the Fu

139、nd Royalty and Distribution Income on those sales.Based upon favourable test results,BPI,BP Canada LP and Royalties LP entered into a Virtual Brand Agreement on October 1,2024(the“Virtual Brand Agreement”)to formally make Moseys part of the Boston Pizza system.The key elements of the Virtual Brand A

140、greement are as follows:(i)the menu for Moseys must be approved by Royalties LP and must be distinct from the core Boston Pizza menu offerings;(ii)Moseys will be available for MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 (“Clas

141、s 2 GP Units”)of BP Canada LP,which are exchangeable into Units.The Class 1 LP Units and Class 2 LP Units entitle Holdings LP to receive distributions from BP Canada LP equal,in aggregate,to 1.5%of Franchise Sales,less the pro rata portion payable to BPI in respect of its retained interest in the Fu

142、nd(“Distribution Income”).Specifically,the Class 1 LP Units entitle Holdings LP to receive a priority distribution equal to the amount of interest that Holdings LP pays on amounts drawn on Facility D(as defined below)plus 0.05%of that amount,with the balance of 1.5%of Franchise Sales being distribut

143、ed pro rata to Holdings LP and BPI on the Class 2 LP Units and Class 2 GP Units,respectively.Top-Line Fund/Increases in Franchise Sales The Fund effectively has the right to receive from BPI and BP Canada LP an amount equal to 5.5%of Franchise Sales(4.0%of which is payable via the Royalty and 1.5%of

144、 which is payable as Distribution Income on the Class 1 LP Units and Class 2 LP Units),less the pro rata portion payable to BPI in respect of its retained interest in the Fund.A key attribute of the Funds structure is that it is a“top-line”fund.Both Royalty and Distribution Income of the Fund are ba

145、sed on Franchise Sales of Boston Pizza Restaurants in the Royalty Pool and are not determined by the profitability of BPI,BP Canada LP or Boston Pizza Restaurants in the Royalty Pool.The Funds cash payments include administrative expenses,principal repayments and interest expenses on debt,amounts pa

146、id by Royalties LP to BPI on the Class B general partner units(“Class B Units”)of Royalties LP,and current income tax.Therefore,the Fund is not subject to the variability of earnings or expenses associated with an operating business.Given this structure,the success of the Fund depends primarily on t

147、he ability of BPI and BP Canada LP to maintain and increase Franchise Sales of Boston Pizza Restaurants in the Royalty Pool.Increases in Franchise Sales and resulting Royalty and Distribution Income are derived from both new Boston Pizza Restaurants added to the Royalty Pool and SRS.The two principa

148、l factors that affect SRS are changes in guest traffic and changes in average guest cheque.Increased average cheque levels are achieved through a combination of menu mix changes and increases to menu prices.However,the extent to which menu price increases result in increased average guest cheque is

149、dependent upon consumer reaction to the price increases.Boston Pizzas ability to increase SRS is dependent upon existing Boston Pizza Restaurants maintaining operational excellence,general market conditions,weather,menu pricing,and marketing programs undertaken by BPI and BP Canada LP.One of BPIs an

150、d BP Canada LPs competitive strengths in increasing Franchise Sales of existing restaurants is that the standard franchise agreement for Boston Pizza Restaurants requires that each Boston Pizza Restaurant undergoes a complete restaurant renovation every seven years and completes equipment upgrades a

151、s required by BP Canada LP.Restaurants typically close or partially close for two to three weeks to complete the renovation,which incorporates updated design elements that result in a refreshed and more appealing restaurant.Franchise Sales are also affected by the permanent closures of Boston Pizza

152、Restaurants.A Boston Pizza Restaurant is closed when it ceases to be viable or when the franchise agreement applicable to that Boston Pizza Restaurant has expired or been terminated.Addition of New Restaurants to Royalty Pool On January 1 of each year(each,an“Adjustment Date”),an adjustment is made

153、to add to the Royalty Pool new Boston Pizza Restaurants that opened(“New Restaurants”)and to remove any Boston Pizza Restaurants that permanently closed since January 1 of the previous year(“Closed Restaurants”).In return for adding new Royalty and Distribution Income from the New Restaurants after

154、subtracting the Royalty and Distribution Income that is lost from the Closed Restaurants8(such difference,“Net Royalty and Distribution Income”),BPI receives the right to indirectly acquire additional Units(in respect of the Royalty,“Class B Additional Entitlements”and in respect of Distribution Inc

155、ome,“Class 2 Additional Entitlements”,and collectively,“Additional Entitlements”).The calculation of Additional Entitlements is designed to be accretive to unitholders of the Fund(“Unitholders”)as the expected increase in Franchise Sales from the New Restaurants added to the Royalty Pool less the de

156、crease in Franchise Sales from the Closed Restaurants is valued at a 7.5%discount.The Additional Entitlements are calculated at 92.5%of the estimated Royalty and Distribution Income expected to be 8 The Royalty and Distribution Income that is lost from the Closed Restaurants is calculated based upon

157、 the actual Franchise Sales received from the Closed Restaurants during the 12-month period immediately following their addition to the Royalty Pool.1716MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 Administrative Expenses Perio

158、d Administrative expenses incurred by the Fund were$0.4 million for the Period,a nominal increase compared to$0.3 million for the fourth quarter of 2023.Administrative expenses are comprised of professional fees,trustee fees and expenses,the reimbursement charge payable to BPI and other general and

159、administrative expenses.Year Administrative expenses incurred by the Fund were$1.7 million for the Year compared to$1.5 million in 2023.The increase in administrative expenses was primarily due to increased professional fees incurred.Net Interest Expense Period Net interest expense incurred by the F

160、und totaled$2.5 million for the Period,comprised of interest on Class B Units of$1.7 million and interest on debt and financing fees of$0.9 million,partially offset by interest income of$0.1 million.Net interest expense incurred by the Fund totaled$2.1 million for the fourth quarter of 2023,comprise

161、d of interest on Class B Units of$1.3 million and interest on debt and financing fees of$0.8 million,partially offset by interest income of$0.1 million.The Class B Units are classified as financial liabilities and therefore,amounts paid by Royalties LP to BPI in respect of the Class B Units are clas

162、sified as interest expense and not distributions.The$0.4 million increase in net interest expense for the Period was primarily due to a$0.4 million increase in interest expense on Class B Units due to the 2024 Distribution Increases and the 2024 Special Distribution(both as defined below).See the“Li

163、quidity&Capital Resources Indebtedness”section of this MD&A for more details on the Credit Facilities and the“Distributions”section for more details on the 2024 Distribution Increases and the 2024 Special Distribution.Year Net interest expense incurred by the Fund totaled$7.7 million for the Year,co

164、mprised of interest on Class B Units of$4.5 million and interest on debt and financing fees of$3.5 million,partially offset by interest income of$0.3 million.Net interest expense incurred by the Fund totaled$7.1 million in 2023,comprised of interest on Class B Units of$4.0 million and interest on de

165、bt and financing fees of$3.4 million,partially offset by interest income of$0.3 million.The$0.6 million increase in net interest expense for the Year was primarily due to a$0.5 million increase in interest expense on Class B Units due to the 2024 Distribution Increases and the 2024 Special Distribut

166、ion,and a$0.1 million increase in interest on debt and financing fees due to higher interest rates.Profit before Fair Value Gain(Loss)and Income Taxes Period The Funds profit before fair value gain(loss)and income taxes was$9.6 million for the Period compared to$9.6 million for the fourth quarter of

167、 2023.The nominal decrease in profit before fair value gain(loss)and income taxes for the Period was primarily due to an increase in net interest expense of$0.4 million,partially offset by an increase in Royalty and Distribution Income of$0.3 million.Year The Funds profit before fair value gain(loss

168、)and income taxes was$40.0 million for the Year compared to$40.6 million in 2023.The$0.6 million decrease in profit before fair value gain(loss)and income taxes for the Year was primarily due to an increase in net interest expense of$0.6 million and an increase in administrative expenses of$0.2 mill

169、ion,partially offset by an increase in Royalty and Distribution Income of$0.3 million.MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 order and delivery exclusively on third-party delivery apps(such as DoorDash,Uber Eats and Skip-

170、the-Dishes)and will be prepared at Boston Pizza Restaurants determined by BPI and BP Canada LP;(iii)Royalties LP owns the trademarks associated with Moseys and such trademarks will be treated as being part of the BP Rights for the purposes of the License and Royalty Agreement;(iv)sales generated by

171、Moseys will be Franchise Sales upon which the applicable franchisees of BP Canada LP must pay royalty and upon which BPI and BP Canada LP must pay the Fund Royalty and Distribution Income;and(v)BPI and BP Canada LP will operate Moseys in a manner that could not reasonably be expected to cause damage

172、 to the Boston Pizza brand.Full particulars of this arrangement are contained within the Virtual Brand Agreement,a copy of which is available on SEDAR+at www.sedarplus.ca.OPERATING RESULTS Same Restaurant Sales and Franchise Sales Period SRS was 3.4%for the Period compared to 0.6%reported in the fou

173、rth quarter of 2023.SRS for the Period was principally due to menu price increases.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

174、 primarily due to positive SRS.Year SRS was 0.9%for the Year compared to 8.7%reported in 2023.SRS was principally due to menu prices increases,partially offset by macroeconomic challenges faced by the full-service restaurant industry.The COVID-19 restrictions that existed during the first half of 20

175、22 were a significant factor in the positive SRS reported in 2023.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.Royalty and D

176、istribution Income Period Royalty and Distribution Income earned by the Fund was$9.4 million and$3.1 million for the Period,respectively,compared to$9.1 million and$3.0 million,respectively,for the fourth quarter of 2023.Royalty and Distribution Income in respect of the Period was based on the Royal

177、ty Pool of 372 Boston Pizza Restaurants reporting Franchise Sales of$234.2 million.In the fourth quarter of 2023,Royalty and Distribution Income was based on the Royalty Pool of 377 Boston Pizza Restaurants reporting Franchise Sales of$227.7 million.The increase in Royalty and Distribution Income fo

178、r the Period was primarily due to positive SRS.Year Royalty and Distribution Income earned by the Fund was$37.3 million and$12.2 million for the Year,respectively,compared to$37.0 million and$12.2 million,respectively,in 2023.Royalty and Distribution Income for the Year was based on the Royalty Pool

179、 of 372 Boston Pizza Restaurants reporting Franchise Sales of$931.7 million.In 2023,Royalty and Distribution Income was based on the Royalty Pool of 377 Boston Pizza Restaurants reporting Franchise Sales of$925.7 million.The increase in Royalty and Distribution Income Year was primarily due to posit

180、ive SRS.1918MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 The Fund indirectly acquired the Class 1 LP Units on May 6,2015 for$33.3 million.As discussed above,the Fund estimated the fair value of Class 1 LP Units as at December 3

181、1,2024 to be$33.3 million(December 31,2023$33.3 million),resulting in no fair value adjustment for the Year.As at December 31,2023,the Fund indirectly held 5,455,762 Class 2 LP Units and the Funds closing price was$15.33.Consequently,the Fund estimated the fair value of the Class 2 LP Units as at De

182、cember 31,2023 to be$83.6 million.As discussed above,the Fund estimated the fair value of the Class 2 LP Units as at December 31,2024 to be$95.4 million,resulting in a fair value gain of$11.7 million for the Year.In general,the fair value of the Class 2 LP Units will increase as the market price of

183、Units increases and vice versa.As at December 31,2023,the number of Units BPI would be entitled to receive if it exchanged all of the Class B Units(including the Class B Holdback)held by BPI was 2,430,823 and the Funds closing price was$15.33 per Unit.The Class B Unit liability(on a fully-diluted ba

184、sis)as at December 31,2023 was valued at$37.3 million.As discussed above,the Class B Unit liability for the Year was valued at$42.5 million as at December 31,2024,resulting in a fair value loss of$5.2 million.The Fund recorded a$2.6 million fair value loss for the Year as a result of the decrease in

185、 the fair value of the Swaps due to changes in interest rates during Year.In 2023,the Fund recorded a$1.4 million fair value loss as a result of the decrease in the fair value of the Swaps due to changes in interest rates.Income Taxes The Fund is subject to specified investment flow-through tax(“SIF

186、T Tax”),which is the Funds only current income tax expense.Period The Funds income tax expense for the Period was$2.6 million,comprised of$2.5 million in current income tax expense and$0.1 million in non-cash deferred income tax expense.The Funds income tax expense for the fourth quarter of 2023 was

187、$2.7 million,comprised of$2.4 million in current income tax expense and$0.3 million in non-cash deferred income tax expense.The$0.1 million increase in current income tax expense is due to higher taxable income.The$0.2 million decrease in non-cash deferred income tax expense is due to changes in the

188、 temporary differences between the accounting and tax base of:(i)the BP Rights owned by Royalties LP generated since the inception of the Fund;and(ii)the Funds indirect investment in BP Canada LP.Year The Funds income tax expense for the Year was$12.1 million,comprised of$10.0 million in current inc

189、ome tax expense and$2.1 million in non-cash deferred income tax expense.The Funds income tax expense in 2023 was$10.4 million,comprised of$10.0 million in current income tax expense and$0.4 million in non-cash deferred income tax expense.The$1.7 million increase in non-cash deferred income tax expen

190、se is due to changes in the temporary differences between the accounting and tax base of:(i)the BP Rights owned by Royalties LP generated since the inception of the Fund;and(ii)the Funds indirect investment in BP Canada LP.Net and Comprehensive Income/Basic and Diluted Earnings Period The Funds net

191、and comprehensive income was$6.6 million for the Period compared to$5.2 million for the fourth quarter of 2023.The Funds basic earnings per Unit was$0.31 for the Period compared to$0.25 for the fourth quarter of 2023.The Funds diluted earnings per Unit was$0.28 for the Period compared to$0.24 for th

192、e fourth quarter of 2023.The$1.4 million increase in the Funds 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 and a$0.2 million decrease in deferred income tax expense,partially offset by a$0.1 million

193、 increase in current income tax expense and a nominal decrease in profit before fair value gain(loss).MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 Fair Value Gain(Loss)The Fund classifies the investment in Class 1 LP Units and

194、Class 2 LP Units as financial assets at fair value through profit or loss,the Class B Unit liability as a financial liability at fair value through profit or loss,and Swaps(as defined below)as derivative instruments.As such,fair value adjustments are recognized in the Funds statements of comprehensi

195、ve income in accordance with IFRS.For additional information regarding Swaps,refer to the“Liquidity&Capital Resources Interest Rate Swaps”section of this MD&A.For additional information regarding financial liabilities and assets at fair value,refer to the“Critical Accounting Estimates”section of thi

196、s MD&A.Period During the Period,the Fund recognized a fair value loss of$0.4 million compared to$1.7 million for the same period in 2023.The change in fair value was principally due to the change in the price of Units,which is used to estimate the value of the Class 2 LP Units and upon which the Cla

197、ss B Unit liability is measured.Changes in interest rates,upon which the Swaps are measured,also impact the change in fair value.The Fund indirectly acquired the Class 1 LP Units on May 6,2015 for$33.3 million.The Class 1 LP Units are entitled to distributions determined with respect to the interest

198、 cost payable on Facility D.The Fund estimates the fair value of the Class 1 LP Units using a market-corroborated input,being the interest rate applicable on Facility D.Consequently,the Fund estimated the fair value of Class 1 LP Units as at December 31,2024 to be$33.3 million(September 30,2024$33.3

199、 million),resulting in no fair value adjustment for the Period.The Fund estimates the fair value of the Class 2 LP Units by multiplying the number of Class 2 LP Units indirectly held by the Fund at the end of the Period by the closing price of the Units on the last business day of the Period.Based o

200、n the Funds closing price of$17.48 per Unit on December 31,2024(September 30,2024$17.55 per Unit)and the 5,455,762 Class 2 LP Units held by the Fund(September 30,2024 5,455,762),the fair value of the Class 2 LP Units was estimated to be$95.4 million(September 30,2024$95.7 million),resulting in a fai

201、r value loss of$0.4 million for the Period.In general,the fair value of the Class 2 LP Units will increase as the market price of Units increases and vice versa.The Fund estimates the fair value of the Class B Unit liability by multiplying the number of Units that BPI would be entitled to receive if

202、 it exchanged all of the Class B Units(including the Class B Holdback)held by BPI at the end of the Period by the closing price of the Units on the last business day of the Period.Based on the Funds closing price of$17.48 per Unit on December 31,2024(September 30,2024$17.55 per Unit)and the 2,430,82

203、3 Units BPI would be entitled to receive if it exchanged all of the Class B Units(including the Class B Holdback)held by BPI(September 30,2024 2,430,823),the Class B Unit liability(on a fully-diluted basis)was valued at$42.5 million(September 30,2024$42.7 million),resulting in a fair value gain of$0

204、.2 million.In general,the Funds Class B Unit liability will increase as the market price of Units increases and vice versa.In addition,the Funds Class B Unit liability increases as the number of Units BPI would be entitled to receive if it exchanged all of its Class B Units(including the Class B Hol

205、dback)increases and vice versa.The Fund recognized a fair value loss of$0.2 million in the Period as a result of the decrease in the fair value of the Swaps due to changes in interest rates during the Period.For the same period in 2023,the Fund recognized a fair value loss of$2.3 million as a result

206、 of the decrease in the fair value of the Swaps due to changes in interest rates.Year During the Year,the Fund recognized a fair value gain of$3.9 million compared to a fair value loss of$0.7 million for 2023.The change in fair value was principally due to the change in the price of Units,which is u

207、sed to estimate the value of the Class 2 LP Units and upon which the Class B Unit liability is measured.Changes in interest rates,upon which the Swaps are measured,also impact the change in fair value.2120MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year

208、ended December 31,2024 Distributions related to the Year were as follows:PERIOD PAYMENT DATE AMOUNT/UNIT December 1 31,2023 January 31,2024 10.7 January 1 31,2024 February 29,2024 11.3 February 1 28,2024 March 29,2024 11.3 March 1 31,2024 April 30,2024 11.3 April 1 30,2024 May 31,2024 11.3 May 1 31,

209、2024 June 28,2024 11.3 June 1 30,2024 July 31,2024 11.3 July 1 31,2024 August 30,2024 11.3 August 1 31,2024 September 27,2024 11.3 September 1 30,2024 October 31,2024 11.3 October 1 31,2024 November 29,2024 11.3 November 1 30,2024 December 31,2024 11.5 December 1 31,2024*January 31,2025 11.5 Special

210、 Distribution December 31,2024 7.5*Paid subsequent to the Period and the Year.Distributions for the Period and the Year were funded entirely by cash flows generated from operating activities.No debt was incurred at any point during the Period or the Year to fund distributions.Cash Flows from Operati

211、ng Activities Period 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

212、in working capital of$0.1 million and an increase in income taxes paid of$0.1 million.Year 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 mi

213、llion 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.MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended Decemb

214、er 31,2024 Year The Funds net and comprehensive income was$31.9 million for the Year compared to$29.6 million in 2023.The Funds basic earnings per Unit was$1.50 for the Year compared to$1.38 in 2023.The Funds diluted earnings per Unit was$1.50 for the Year compared to$1.34 in 2023.The$2.3 million in

215、crease in the Funds net and comprehensive income for the Year compared to 2023 was primarily due to a$4.6 million increase in fair value gain,partially offset by a$1.7 million increase in deferred income tax expense and a$0.6 million decrease in profit before fair value gain(loss).Distributions Peri

216、od 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 distribu

217、tions 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

218、$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

219、 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”).Year During the Year,the Fund declared distributions on the Un

220、its 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

221、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

222、and the 2024 Special Distribution,partially offset by fewer Units being outstanding during the Year compared to 2023 due to the Funds NCIB(as defined below).The Fund pays distributions on the Units in respect of any calendar month not later than the last business day of the immediately subsequent mo

223、nth.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 31,20

224、25).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

225、 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 speci

226、al distributions.2322MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 Distributable Cash Distributable Cash per Unit Payout Ratio Period The Funds Payout Ratio for the Period was 118.4%compared to 92.7%in the fourth quarter of 2023

227、.The increase in the Funds Payout Ratio for the Period was due to distributions paid increasing by$2.0 million or 29.6%as a result of the 2024 Distribution Increases and the 2024 Special Distribution,partially offset by Distributable Cash increasing by$0.1 million or 1.5%.Year The Funds Payout Ratio

228、 for the Year was 99.9%compared to 88.6%in 2023.The increase in the Funds 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,along with Distributable Cash decreasing by$0.3 million

229、 or 0.9%.The Funds quarterly and annual Payout Ratios with respect to each financial quarter since January 1,2022 are as follows:The Funds Payout Ratio fluctuates quarter-to-quarter depending upon the amount of distributions paid during a quarter and the amount of Distributable Cash generated during

230、 that quarter.Normal Course Issuer Bid On June 15,2023,the Fund announced that it had received Toronto Stock Exchange(“TSX”)approval of a Notice of Intention to Make a Normal Course Issuer Bid through the facilities of the TSX,other designated exchanges and/or alternative Canadian trading systems fr

231、om June 20,2023 to June 19,2024(the“NCIB”).The NCIB permitted the Fund to repurchase for cancellation up to 400,000 Units,being approximately 1.86%of the Funds issued and outstanding Units(as at June 6,2023).The Fund did not make any purchases under the NCIB during Distributable Cash(in millions of

232、dollars)Q1 Q2 Q3 Q4 Annual 20247.3$7.5$8.1$7.5$30.4$20237.2$7.9$8.3$7.4$30.7$20224.7$6.2$7.5$7.2$25.6$Distributable Cash per UnitQ1 Q2 Q3 Q4 Annual 20240.344$0.352$0.381$0.351$1.429$20230.334$0.365$0.387$0.346$1.432$20220.218$0.287$0.347$0.336$1.189$Q1 Q2 Q3 Q4 Annual 202496.8%96.2%88.9%118.4%99.9%2

233、02391.6%88.0%82.9%92.7%88.6%2022116.8%88.9%82.0%115.1%99.4%MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 Cash Flow used in Financing Activities Period During the Period,the Fund used$11.0 million in cash for financing activities

234、 compared to$8.6 million in the fourth quarter of 2023.The increase of$2.4 million was primarily due to higher distributions paid to Unitholders of$2.0 million,higher interest paid on Class B Units of$0.3 million and nominally higher interest paid on debt.Year During the Year,the Fund used$38.1 mill

235、ion in cash for financing activities compared to$38.6 million in 2023.The decrease of$0.5 million was primarily due to$4.0 million being used to repurchase Fund units under the NCIB in 2023 with no comparable NCIB transactions in 2024 and a$0.1 million decrease in interest paid on debt,partially off

236、set by higher distributions paid to Unitholders of$3.2 million and higher interest paid on Class B Units of$0.5 million.Distributable Cash/Distributable Cash per Unit Period The Fund generated Distributable Cash of$7.5 million for the Period compared to$7.4 million for the fourth quarter of 2023.The

237、 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 per Unit of$0.351 for the Period compared to$0.346 per Unit for the fourth quarter of 2023.The increase in Dis

238、tributable Cash per Unit of$0.005 or 1.4%was primarily attributable to the increase in Distributable Cash outlined above.Year The Fund generated Distributable Cash of$30.4 million for the Year compared to$30.7 million in 2023.The decrease in Distributable Cash of$0.3 million or 0.9%was primarily due

239、 to higher Class B Unit entitlement 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$1.429 for the Year compared to$1.432 per Unit in 2023.T

240、he 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 NCIB.The Funds Distributable Cash and Distributable Cash per Unit sinc

241、e January 1,2022,generated in each financial quarter,are as follows:2524MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024$7.5 million.The actual Franchise Sales generated from this one New Restaurant after subtracting the Franchise

242、Sales from the six Boston Pizza Restaurants that closed in 2024 was$0.4 million less.As a result,the Deficiency in respect of 2023 was increased slightly.Since there was still a Deficiency,there was no need to determine and adjust for the actual effective tax rate paid by the Fund for 2024.Summary o

243、f Cumulative Deficiency The following is a summary of the cumulative Deficiency that exists:Adjustment Date Actual/Estimated Franchise Sales of New Restaurants for Adjustment Date(in millions)*Actual Franchise Sales of Closed Restaurants for Adjustment Date(in millions)*Net Franchise Sales for Adjus

244、tment Date(in millions)*Deficiency,being 5.5%of Net Franchise Sales(in millions)*January 1,2021$3.1$18.5($15.4)($0.8)January 1,2022-$6.2($6.2)($0.3)January 1,2023-$6.8($6.8)($0.4)January 1,2024$1.4$9.2($7.9)($0.4)January 1,2025$3.4$7.4($4.0)($0.2)Cumulative$7.9$48.1($40.3)($2.2)*Figures are rounded

245、to one decimal place.Determined and adjusted in February 2022 after an audit of Franchise Sales for 2021 was performed on the New Restaurants.Determined and adjusted in February 2025 after an audit of Franchise Sales for 2024 was performed on the New Restaurant.To be determined and adjusted in Febru

246、ary 2026 after an audit of Franchise Sales for 2025 is performed on the four New Restaurants for 2024,with the corresponding net Franchise Sales and Deficiency in respect of the Adjustment Date of 2025 being amended accordingly.Units Outstanding The following table sets forth a summary of the outsta

247、nding Units.BPI owns 100%of the Class B Units and 1%of the ordinary general partner units of Royalties LP.BPI also owns 100%of the Class 2 GP Units,and 100%of the Class 3,Class 4,Class 5 and Class 6 general partnership units of BP Canada LP.The Class B Units and Class 2 GP Units are exchangeable for

248、 Units.References to“Class B Additional Entitlements”and“Class 2 Additional Entitlements”in the table below refer to the number of Units into which the Class B Units and Class 2 GP Units,respectively,are exchangeable as of the dates indicated.MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIE

249、S INCOME FUND For the Period and Year ended December 31,2024 the Year but acquired a total of 242,900 Units during 2023 at an average price of$16.49 per Unit.The Fund financed Units purchased under the NCIB from cash on hand.All Units that were purchased under the NCIB were cancelled.The NCIB expire

250、d on June 19,2024.New Restaurants Added to the Royalty Pool Boston Pizza Restaurants Added to Royalty Pool on January 1,2024 On January 1,2024,the Royalty Pool was adjusted to add one New Restaurant that opened and remove six Closed Restaurants that closed between January 1,2023 and December 31,2023

251、,resulting in the number of Boston Pizza Restaurants in the Royalty Pool decreasing from 377 to 372.The estimated annual Franchise Sales in 2024 for the one New Restaurant that opened in 2023 was$1.8 million.The actual Franchise Sales received from the six Closed Restaurants in 2023 during the first

252、 12-month period immediately following their addition to the Royalty Pool was$9.2 million.The resulting estimated annual net Franchise Sales for 2023 was negative$7.5 million.Consequently,this resulted in the Net Royalty and Distribution Income having a Deficiency for 2023 of$0.4 million(being 5.5%o

253、f negative$7.5 million Franchise Sales).Since there was a Deficiency for 2023 of$0.4 million,BPI did not receive any Additional Entitlements on January 1,2024.However,BPI did not lose any of the Additional Entitlements it received in respect of previous years.An adjustment was made to the Deficiency

254、 for 2023 in early 2025 based on the full year performance of the one New Restaurant that opened in 2023(see“Subsequent Events”below for details).Audit of Boston Pizza Restaurants Added to Royalty Pool on January 1,2023 Since no New Restaurants were opened during 2022 nor were added to the Royalty P

255、ool on January 1,2023,there was no need to conduct an audit to compare the actual Franchise Sales from New Restaurants that were opened in 2022 to the estimated amount of Franchise Sales expected to be generated by these New Restaurants during 2023 nor to compare the actual effective tax rate paid b

256、y the Fund for 2023 to the estimated effective tax rate the Fund expected to pay for 2023.Subsequent Events Boston Pizza Restaurants Added to Royalty Pool on January 1,2025 On January 1,2025,the Royalty Pool was adjusted to add four New Restaurants that opened and remove four Closed Restaurants that

257、 closed between January 1,2024 and December 31,2024,resulting in the number of Boston Pizza Restaurants in the Royalty Pool remaining at 372.The estimated annual Franchise Sales in 2025 for the four New Restaurants that opened in 2024 was$3.4 million.The actual Franchise Sales received from the four

258、 Closed Restaurants in 2024 during the first 12-month period immediately following their addition to the Royalty Pool was$7.4 million.The resulting estimated annual net Franchise Sales for 2024 was negative$4.0 million.Consequently,this resulted in the Net Royalty and Distribution Income having a De

259、ficiency for 2024 of$0.2 million(being 5.5%of negative$4.0 million Franchise Sales).Since there was a Deficiency for 2024 of$0.2 million,BPI did not receive any Additional Entitlements on January 1,2025.However,BPI did not lose any of the Additional Entitlements it received in respect of previous ye

260、ars.In early 2026,an adjustment will be made to the Deficiency for 2024 based upon full year performance of the four New Restaurants that opened in 2024 compared to the estimated Franchise Sales of$3.4 million.BPI will be required to make-up the cumulative Deficiency for 2020,2021,2022,2023 and 2024

261、 on future Adjustment Dates by first adding Net Royalty and Distribution Income in an amount equal to the cumulative Deficiency before receiving any further Additional Entitlements.Audit of Boston Pizza Restaurants Added to Royalty Pool on January 1,2024 In February 2025,an audit of the Franchise Sa

262、les of the one New Restaurant that was added to the Royalty Pool on January 1,2024 was performed.The purpose of this audit was to compare the actual Franchise Sales from this one New Restaurant to the estimated amount of Franchise Sales expected to be generated by this one New Restaurant during 2024

263、.As noted above,the original Franchise Sales expected to be generated from this one New Restaurant less the Franchise Sales from the six Boston Pizza Restaurants that closed in 2024 was negative 2726MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended

264、December 31,2024 Summary of Boston Pizza Royalties Income Units Dec.31,2024 Excluding Holdback Dec.31,2024 Including Holdback Feb.13,2025 Excluding Holdback Feb.13,2025 Including Holdback Units Outstanding Total Issued and Outstanding Units 21,278,563 21,278,563 21,278,563 21,278,563 Class B Additio

265、nal Entitlements Outstanding Class B Additional Entitlements(Excluding Jan.1,2025 Adjustment Date)2,430,823 2,430,823 2,430,823 2,430,823 Class B Holdback(Excluding Jan.1,2025 Adjustment Date)N/A-N/A N/A(1)Class B Additional Entitlements Issued Jan.1,2025 N/A N/A-Class B Holdback Created Jan.1,2025

266、N/A N/A N/A-(2)Total Class B Additional Entitlements 2,430,823 2,430,823 2,430,823 2,430,823 Class 2 Additional Entitlements Outstanding Class 2 Additional Entitlements(Excluding Jan.1,2025 Adjustment Date)831,354 831,354 831,354 831,354 Class 2 Holdback(Excluding Jan.1,2025 Adjustment Date)N/A-N/A

267、N/A(1)Class 2 Additional Entitlements Issued Jan.1,2025 N/A N/A-Class 2 Holdback Created Jan.1,2025 N/A N/A N/A-(2)Total Class 2 Additional Entitlements 831,354 831,354 831,354 831,354 Summary Total Issued and Outstanding Units 21,278,563 21,278,563 21,278,563 21,278,563 Total Additional Entitlement

268、s 3,262,177 3,262,177 3,262,177 3,262,177 Total Diluted Units 24,540,740 24,540,740 24,540,740 24,540,740 BPIs Total Percentage Ownership 13.3%13.3%13.3%13.3%1)There is no Holdback for the adjustment to the Royalty Pool that occurred on January 1,2024 since BPI did not receive any Additional Entitle

269、ments in respect thereof due to a Deficiency existing.2)There is no Holdback for the adjustment to the Royalty Pool that occurred on January 1,2025 since BPI did not receive any Additional Entitlements in respect thereof due to a Deficiency existing.BPI directly and indirectly holds 100%of the speci

270、al voting units(the“Special Voting Units”)of the Fund,which entitle BPI to one vote in respect of matters to be voted upon by Unitholders for each Unit that BPI would be entitled to receive if it exchanged all of its Class B Units and Class 2 GP Units for Units.As of February 13,2025,BPI was entitle

271、d to 3,262,177 votes,representing 13.3%of the aggregate votes held by holders of Units and Special Voting Units.The number of Units that BPI is entitled to receive upon the exchange of its Class B Units and Class 2 GP Units and the number of votes that BPI is entitled to in respect of its Special Vo

272、ting Units is adjusted periodically to reflect any additional Boston Pizza Restaurants that were added to the Royalty Pool.TAX TREATMENT OF DISTRIBUTIONS Of the$1.435 in distributions declared per Unit during the Year,88.5%or$1.270 per Unit are taxable eligible dividends and 11.5%or$0.165 per Unit r

273、epresents a tax-deferred return of capital.MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 LIQUIDITY&CAPITAL RESOURCES The Funds long-term distribution policy is to distribute the total amount of cash received by the Fund from the

274、 Trust on the units of the Trust and notes of the Trust less the sum of:(a)administrative expenses and other obligations of the Fund;(b)amounts which may be paid by the Fund in connection with any cash redemptions of Units;(c)any interest expense incurred by the Fund;(d)any contractually required re

275、payments of principal of the Funds indebtedness;and(e)reasonable reserves established by the trustees of the Fund in their sole discretion,including,without limitation,reserves to pay SIFT Tax,in order to maximize returns to Unitholders.The Funds policy is to make equal distribution payments to Unit

276、holders on a monthly basis in order to smooth out fluctuations in Distributable Cash.Any further change in distributions will be implemented in such a manner so that the continuity of uniform monthly distributions is maintained,while making provisions for working capital due to seasonal variations o

277、f Boston Pizza Restaurant sales.It is expected that future distributions will continue to be funded entirely by cash flows from operations.The Fund believes its current sources of liquidity are sufficient to cover its currently known short and long-term obligations.Indebtedness Original Credit Facil

278、ities Prior to June 14,2024,Holdings LP and Royalties LP had credit facilities with a Canadian chartered bank(the“Bank”)in the amount of up to$88.6 million that were scheduled to expire on July 1,2026(the“Original Credit Facilities”).The Original Credit Facilities were comprised of a:(a)$2.0 million

279、 committed operating facility issued to Royalties LP(“Facility A”);(b)$53.3 million committed non-revolving credit facility issued to Royalties LP for the purpose of refinancing Royalties LPs previous credit facilities,to facilitate the Fund repurchasing and cancelling Units under normal course issu

280、er bids or substantial issuer bids,to finance the cash component of any exchange of exchangeable units of BP Canada LP and to repay reimbursement charges owing by Royalties LP to BPI for performing administrative services to the Fund(“Facility B”);and(c)$33.3 million committed non-revolving credit f

281、acility issued to Holdings LP for the purpose of subscribing for Class 1 LP Units of BP Canada LP(“Facility D”).The amount available under Facility B permanently reduces whenever Royalties LP repays principal on Facility B.The principal amounts drawn on Facility A,Facility B and Facility D are due a

282、nd payable upon maturity.The Original Credit Facilities bore interest at variable interest rates as selected by Holdings LP and Royalties LP.In the case of Canadian prime rate loans,the interest rate was equal to the Banks prime rate plus between 0.00%and 0.65%(depending on the Funds total funded ne

283、t debt to EBITDA ratio)and,in the case of bankers acceptances and Canadian dollar offered rate loans,the interest rate was equal to a variable interest rate based on the Banks bankers acceptance rates or Canadian dollar offered rates plus between 1.25%and 1.85%(depending on the Funds total funded ne

284、t debt to EBITDA ratio).Amendments to the Original Credit Facilities In 2024,a fundamental reform of major interest rate benchmarks was undertaken globally,including the replacement of some interbank offered rates(“IBOR”)with alternative rates.On June 28,2024,the administrator,Refinitiv Benchmark Se

285、rvices UK Limited,ceased publication of the Canadian Dollar Offered Rate(“CDOR”).The Funds IBOR exposure was indexed to CDOR prior to June 14,2024.To address the cessation of CDOR being published,Holdings LP,Royalties LP and the Bank entered into a Third Supplemental Credit Agreement dated June 14,2

286、024(the“Third Supplemental Credit Agreement”)9 to amend the Original Credit Facilities to replace the current rates that are based upon CDOR with corresponding rates that are based upon the Canadian Overnight Repo Rate Average(“CORRA”).The material modifications to the 9 On June 14,2024,BPI also ent

287、ered into a Third Supplemental Credit Agreement with the Bank to amend BPIs credit facilities.See BPIs MD&A for the three-month period and year ended December 31,2024,a copy of which is available on www.sedarplus.ca,for details.2928MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FU

288、ND For the Period and Year ended December 31,2024 As of December 31,2024,Adjusted Working Capital10 of the Fund totaled$6.2 million compared to$7.5 million on December 31,2023.The Fund has no requirement to maintain a certain amount of working capital.As of December 31,2024,no amounts were drawn on

289、Facility A,$53.3 million was drawn on Facility B and$33.3 million was drawn on Facility D.The following table provides a summary of the Funds contractual obligations and commitments(including expected interest payments)as at December 31,2024:Note:1)The Credit Facilities and Swaps include expected in

290、terest payments based on the Funds blended rate of 3.87%to the scheduled maturity date of the Credit Facilities of July 1,2026 and excludes deferred financing costs of$0.1 million.Interest Rate Swaps Royalties LP and Holdings LP,as applicable,previously entered into the following interest rate swaps

291、 under their respective International Swap Dealers Association Master Agreements with the Bank(the“Swaps”):(a)Royalties LP entered into a swap to fix the interest rate at 2.28%plus between 1.25%and 1.85%per annum(depending upon debt to EBITDA ratios)for a term ending on February 1,2027 for$15.0 mill

292、ion of the$53.3 million drawn on Facility B;(b)Royalties LP entered into a swap to fix the interest rate at 3.48%plus between 1.25%and 1.85%per annum(depending upon debt to EBITDA ratios)for a term ending on January 4,2028 for$15.0 million of the$53.3 million drawn on Facility B;(c)Royalties LP ente

293、red into a swap to fix the interest rate at 3.48%plus the applicable CSA plus between 1.25%and 1.85%per annum(depending upon debt to EBITDA ratios)for a term ending on July 3,2029 for$15.0 million of the$53.3 million drawn on Facility B;(d)Holdings LP entered into a swap to fix the interest rate at

294、1.02%plus between 1.25%and 1.85%per annum(depending upon debt to EBITDA ratios)for a term ending on August 14,2025 for$17.0 million of the$33.3 million drawn on Facility D;and(e)Holdings LP entered into a swap to fix the interest rate at 1.09%plus between 1.25%and 1.85%per annum(depending upon debt

295、to EBITDA ratios)for a term ending on March 1,2026 for$15.0 million of the$33.3 million drawn on Facility D.10 Adjusted Working Capital does not include the current portion of Class B Unit liability as this will be settled with equity rather than cash.Adjusted Working Capital is a supplementary fina

296、ncial measure under NI 52-112 and therefore may not be comparable to similar measures presented by other issuers.“Adjusted Working Capital”is defined as the Funds current assets less current liabilities excluding the current portion of the Class B unit liability.The Fund believes this metric provide

297、s Unitholders useful information as Adjusted Working Capital represents the Funds working capital amounts expected to be settled for actual cash within the next twelve months.(in thousands of dollars)1 year1-5 yearsTotalBook ValueAccounts payable and accrued liabilities668 668668Distributions payabl

298、e to Fund unitholders2,447 2,4472,447Interest payable on Class B Units357 357357Current income tax payable3 33Credit Facilities and Swaps13,53588,68792,22286,4607,01088,68795,69789,935MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,202

299、4 Original Credit Facilities were as follows(the Original Credit Facilities,as amended by the Third Supplemental Credit Agreement,the“Credit Facilities”):1.The availment options were amended to eliminate bankers acceptance and CDOR loans and to add in daily compounded CORRA loans and term CORRA loan

300、s as availment options,in each case with either a one-month or three-month interest period.Accordingly,the Fund may borrow funds under the Credit Facilities via Canadian prime rate loans,daily compounded CORRA loans and term CORRA loans;2.Provisions were added to stipulate how CORRA loan rates are d

301、etermined,how interest is calculated when interest is payable,and other related matters;3.Provisions were added to define what happens if CORRA ceases to be published in the future and how an alternative IBOR would be selected;4.Provisions were added to clarify that any bankers acceptance loans made

302、 prior to June 14,2024 will continue to be governed by the provisions governing the Original Credit Agreement;and 5.Provisions were added to address how CDOR loans were transitioned to CORRA loans.The Third Supplemental Credit Agreement did not amend the margins applicable to loans but rather clarif

303、ied that the margins previously applicable to bankers acceptance and CDOR loans apply to CORRA loans.However,it added a credit spread adjustment of either 0.29547%or 0.32138%depending upon whether the CORRA loan has a one-month or three-month interest period,respectively(the“CSA”).Accordingly,the Cr

304、edit Facilities bear interest at variable interest rates as selected by Holdings LP and Royalties LP.In the case of Canadian prime rate loans,the interest rate is equal to the Banks prime rate plus between 0.00%and 0.65%(depending on the Funds total funded net debt to EBITDA ratio)and,in the case of

305、 CORRA loans,the interest rate is equal to:(i)CORRA;plus(ii)the applicable CSA;plus(iii)between 1.25%and 1.85%(depending on the Funds total funded net debt to EBITDA ratio).The Fund determined that the transition from CDOR to CORRA did not result in a material change in the Funds cost of borrowing u

306、nder the Credit Facilities.A copy of the Third Supplemental Credit Agreement,together with the(i)the First Amended and Restated Credit Agreement dated January 24,2020;(ii)the First Supplemental Credit Agreement dated June 22,2020;and(iii)the Second Supplemental Credit Agreement dated June 28,2022(co

307、llectively,the“Credit Agreement”,which are the agreements that govern the Credit Facilities)are available on SEDAR+at www.sedarplus.ca.Security and Covenants The Credit Facilities are secured by a first charge on the assets of Holdings LP and Royalties LP.The Credit Facilities are guaranteed by the

308、Fund and all of its subsidiaries,each of whom granted security over all its assets in favour of the Bank in support of such guarantees.Neither BPI,BP Canada LP nor any of BPIs subsidiaries has guaranteed or provided any security in respect of the Credit Facilities.The principal financial covenants o

309、f the Credit Facilities are that:(a)the Fund and its subsidiaries(including Holdings LP and Royalties LP),taken as a whole,shall maintain a total funded net debt to EBITDA ratio of not greater than 2.50:1 upon closing and until December 30,2024 and not greater than 2.25:1 thereafter(tested quarterly

310、);and(b)the total amount of certain permitted distributions of the Fund(including distributions to Unitholders)must not exceed the sum of the Funds Distributable Cash(as Distributable Cash is defined in the Credit Agreement)and cash on hand by greater than$2.0 million(tested quarterly on a trailing

311、12-month basis).In addition,the agreements governing the Credit Facilities contain certain covenants and restrictions,including the requirement to meet the financial ratios described above.A failure of the Fund or its subsidiaries to comply with these covenants and restrictions could entitle the Ban

312、k to demand repayment of the outstanding balance drawn on the Credit Facilities prior to maturity.Royalties LP and Holdings LP were in compliance with all of their financial covenants and financial condition tests as at the end of the Period.Full particulars of the Credit Facilities,including applic

313、able interest rates,security,guarantees and other terms and conditions are contained within the Credit Agreement.3130MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 under applicable securities legislation is recorded,processed,sum

314、marized and reported within the prescribed time periods specified in securities legislation,and(b)material information regarding the Fund is accumulated and communicated to the Funds administrator,Royalties LP,as well as the President and CFO in a timely manner,particularly during the period in whic

315、h the annual and interim filings are being prepared.The President and CFO have designed or caused to be designed under their supervision internal controls over financial reporting to provide reasonable assurance regarding the reliability of the Funds financial reporting and the preparation of its fi

316、nancial statements for external purposes in accordance with IFRS.The control framework used to design the Funds internal controls over financial reporting is the Committee of Sponsoring Organizations of the Treadway Commission Internal Control Integrated Framework:2013.An evaluation of the effective

317、ness of the Funds internal controls over financial reporting,as defined in National Instrument 52-109 Certification of Disclosure in Issuers Annual and Interim Filings,was carried out under the supervision of and with the participation of management,including the President and CFO.Based upon that ev

318、aluation,the President and CFO have concluded that as at December 31,2024,the Funds internal controls over financial reporting were operating effectively.During the Period,there was no change in the Funds internal control over financial reporting that has materially affected,or is reasonably likely

319、to materially affect,the Funds internal controls over financial reporting.Because of its inherent limitations,internal controls over financial reporting may not prevent or detect misstatements.Accordingly,even systems determined to be effective can provide only reasonable assurance with respect to f

320、inancial statement preparation and presentation.CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of the Funds condensed consolidated interim financial statements in accordance with IFRS requires management to make judgments,estimates and assumptions that affect the application of accounti

321、ng policies and the reported amounts of assets,liabilities,income,and expenses.Actual results may differ from these estimates.Estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognized in the period in which the estimates are revised.Signif

322、icant areas requiring the use of management judgment and estimates relate to the determination of the following:Judgment Consolidation Applying the criteria outlined in IFRS 10,judgment is required in determining whether the Fund controls Royalties LP.Making this judgment involves taking into consid

323、eration the concepts of power over Royalties LP,exposure and rights to variable returns,and the ability to use power to direct the relevant activities of Royalties LP so as to generate economic returns.Using these criteria,management has determined that the Fund ultimately controls Royalties LP thro

324、ugh its 80%ownership of the managing general partner,Royalties GP.Estimates-Intangible Assets the BP Rights The Fund carries the BP Rights at historical cost comprising the amount of consideration paid for the BP Rights in 2002,as well as the value of additional Boston Pizza Restaurants added to the

325、 Royalty Pool to date.The value of additional Boston Pizza Restaurants added to the Royalty Pool is determined on a formula basis that is designed to estimate the present value of the cash flows that would ultimately be payable to the Fund as a result of the new Boston Pizza Restaurants being added

326、to the Royalty Pool.The calculation is dependent on a number of different variables including the estimated sales of the new Boston Pizza Restaurants for the calendar year in which they are add to the Royalty Pool and the tax rate.The value assigned to the new Boston Pizza Restaurants,and as a resul

327、t,the value assigned to the BP Rights,could differ from actual results.The impairment test requires that the Fund use a valuation technique to determine if impairment exists.The valuation of the intangibles is based on a value in use approach and depends on certain estimates,including projected Fran

328、chise Sales for restaurants that are in the Royalty Pool and the discount rate.This valuation technique may not represent the actual recoverable amount that the Fund expects the BP Rights to generate.The Fund concluded that the recoverable amount exceeds the carrying amount of the BP Rights and ther

329、efore,no impairment was recorded for the Year.MANAGEMENTS DISCUSSION AND ANALYSIS BOSTON PIZZA ROYALTIES INCOME FUND For the Period and Year ended December 31,2024 As of December 31,2024,$8.3 million drawn on Facility B and$1.3 million drawn on Facility D bore interest at variable interest rates app

330、licable to the Credit Facilities discussed above.The effective interest rate for all amounts borrowed by the Fund was 3.87%at December 31,2024(December 31,2023 3.78%).The Fund uses the Swaps to mitigate its exposure to interest rate risk related to the Credit Facilities.The Fund accounts for the Swa

331、ps as derivative instruments in accordance with IFRS.The fair market value of the Swaps is determined using valuation techniques at each reporting date and any change in the fair value of the Swaps is included in the Funds comprehensive income or loss.The Fund recognized a$0.2 million fair value los

332、s on the Swaps for the Period in its consolidated statements of comprehensive income compared to$2.3 million in the fourth quarter of 2023.During the Year,the Fund recorded a$2.6 million fair value loss on the Swaps in the consolidated statements of comprehensive income compared to$1.4 million in 20

333、23.Related Party Transactions BPI and BP Canada LP are considered to be related parties of the Fund by virtue of the common officers and directors of BPI and Royalties GP.The Funds related party balances owing at the end of the Period and transactions for the Period were as follows:(1)The Fund has engaged Royalties LP,its administrator,to provide certain administrative services on behalf of the Fu