PIZZA PIZZA ROYALTY INCOME FUND Consolidated Interim .
PIZZA PIZZA ROYALTY INCOME FUNDConsolidated Interim Financial Statements(Unaudited)For the three months ended March 31, 2010
Pizza Pizza Royalty Income FundCONSOLIDATED BALANCE SHEETSMarch 31, 2010(Expressed in Thousands of Dollars)March 31,2010(unaudited)December 31,2009(audited)AssetsCurrent assets:Receivable from Pizza Pizza LimitedReceivable from Pizza Pizza Royalty Limited PartnershipTotal current assets Loan receivable from Pizza Pizza LimitedInvestment in Pizza Pizza Royalty Limited Partnership (note 3)1501,5411,691 30,000197,510 229,2011501,5411,69130,000195,047 226,738Liabilities and Unitholders' EquityCurrent liabilities:Distribution payable to Fund unitholders1,6911,691Future income tax liability (note 1,582219,367Unitholders' Equity:Fund units (note 5)Contributed surplusAccumulated other comprehensive lossDeficitTotal unitholders’ equity 229,201 226,738See accompanying notes to consolidated financial statementsApproved by the Trustees:(Signed) ROBERT NOBESTrustee(Signed) ARNOLD CADERTrustee-1-(Signed) TERENCE REIDTrustee
Pizza Pizza Royalty Income FundCONSOLIDATED STATEMENTS OF EARNINGSFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars Except Number of Units and Per Unit Amounts)System Sales included in the Royalty Pool(note 2(a))March 31, 2010(unaudited)March 31, 2009(unaudited) 108,299109,385Equity income in the Partnership (note 2(a))Interest income4,1874504,373450Earnings before income taxesFuture income taxes expense (recovery) (note 4)4,6372484,823(293)Net earnings Weighted average Fund units (note 6)4,389 5,11621,818,392Basic earnings per Fund unit Weighted average diluted Fund units (note 6)0.2021,818,392 0.2329,595,718Diluted earnings per Fund unit (note 6) 29,022,6780.20 0.23CONSOLIDATED STATEMENTS OF DEFICITFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars Except Per Unit Amounts)Balance, beginning of periodNet earningsDistributions declared (2010 – 0.2325/unit;2009 – 0.2325/unit)Balance, end of periodMarch 31, 2010(unaudited)March 31, 2009(unaudited) See accompanying notes to consolidated financial 201)(5,072)(11,159)
Pizza Pizza Royalty Income FundCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars)March 31,2010(unaudited)Net earningsOther comprehensive incomeShare of other comprehensive incomeof the Partnership (note 3)Comprehensive income 4,389 804,469March 31,2009(unaudited) 5,116 895,205CONSOLIDATED STATEMENTS OF ACCUMULATED OTHER COMPREHENSIVE LOSSFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars)March 31,2010(unaudited) Balance, beginning of periodOther comprehensive income (note 3)Balance, end of period, being the Fund’sshare of the fair value of a cash flow hedge(1,906)March 31,2009(unaudited) 80 See accompanying notes to consolidated financial statements-3-(1,826)(3,166)89 (3,077)
Pizza Pizza Royalty Income FundCONSOLIDATED STATEMENTS OF CASH FLOWSFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars)March 31,2010(unaudited)March 31,2009(unaudited)Cash provided by (used in):Operating activitiesNet earningsEquity income, an item not affecting cash(note 2(a))Distributions receivedFuture income tax expense (recovery) 4,389 072)(5,072)--Financing activityDistributions paid to unitholdersIncrease (decrease) in cashCash, beginning of periodCash, end of period See supplementary cash flows information (note 10)See accompanying notes to consolidated financial statements-4-- -
Pizza Pizza Royalty Income FundNotes to Consolidated Financial StatementsFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars Except Number of Units and Per Unit Amounts)1. Organization and Nature of OperationsPizza Pizza Royalty Income Fund (the “Fund”) prepares its interim consolidated financial statements inaccordance with Canadian generally accepted accounting principles (“GAAP”) on a basis consistent withthose used and described in the annual consolidated financial statements for the year ended December 31,2009. The disclosures contained in these interim consolidated financial statements do not include allrequirements of Canadian GAAP for annual financial statements; however, all requirements for interimfinancial statements have been satisfied.These interim consolidated financial statements should be read in conjunction with the annual consolidatedfinancial statements for the year ended December 31, 2009.2. Partnership Operationsa. Equity income earned by the Fund through its interest in the Pizza Pizza Royalty Limited Partnership (the“Partnership”) has been derived as shown in the table below:March 31,2010March 31,2009(in thousands of dollars, except number of restaurants in the Royalty Pool)Restaurants in Royalty Pool671System sales reported by Pizza Pizzarestaurants in the Royalty PoolSystem sales reported by Pizza 73 restaurantsin the Royalty PoolRoyalty - 6% on Pizza Pizza system salesRoyalty - 9% on Pizza 73 system salesTotal royalty on system salesPartnership administrative and interestexpensesPartnership earnings for the period beforeundernoted Pizza Pizza Limited interestPizza Pizza Limited’s interestEquity income in the Partnership 89,990 18,309108,2995,3991,6487,047 637 88,033 4,1876,416(2,043)4,373 b. 2009 Royalty Pool AdjustmentIn early January 2010, adjustments to royalty payments and Pizza Pizza’s Class B Exchange Multiplierwere made based on the actual performance of the 18 restaurants added to the Royalty Pool on January1, 2009. As a result of the adjustments, the new Class B Exchange Multiplier was 1.4240 andPizza Pizza’s exchangeable units can be exchanged into 5,800,072 Fund units which is an increase of56,141 Fund units, effective January 1, 2009.In early January 2010, adjustments to royalty payments and Pizza Pizza’s Class D Exchange Multiplierwere made based on the actual performance of the 19 restaurants added to the Royalty Pool on January1, 2009. As a result of the adjustments, the new Class D Exchange Multiplier was 15.4543 andPizza Pizza’s exchangeable units can be exchanged into 1,545,432 Fund units which is an increase of85,077 Fund units, effective January 1, 2009.-5-
Pizza Pizza Royalty Income FundNotes to Consolidated Financial StatementsFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars Except Number of Units and Per Unit Amounts)2. Partnership Operations, continuedc.2010 Royalty Pool Adjustment – Class B Exchange MultiplierOn January 1, 2010, 22 net, new Pizza Pizza restaurants were added to the Royalty Pool as a result of31 new restaurants opening and nine closing from January 1, 2009 to December 31, 2009. The additionalsystem sales from the 31 new restaurants are estimated at 9,985 annually less sales of 3,075 fromnine permanently closed Pizza Pizza restaurants resulting in net, estimated Pizza Pizza sales of 6,910added to the Royalty Pool. The total number of Pizza Pizza restaurants in the Royalty Pool has increasedto 590. The yield of the Fund units was determined to be 14.2% calculated using 6.54 as a weightedaverage unit price. Weighted average unit price is calculated based on the market price of the unitstraded on the TSX during the period of twenty consecutive days ending on the fifth trading day beforeJanuary 1, 2010. As a result of the contribution of the additional net sales to the Royalty Pool,Pizza Pizza’s Class B Exchange Multiplier increased fractionally by 80% of the total adjustment or0.0810; the new Class B Multiplier is 1.5050. This adjustment will also increase the entitlement of theholders of the Class B units to distributions of cash and allocations of income from the Partnership. Thesecond adjustment to the Class B Exchange Multiplier will be adjusted to be effective January 1, 2010,once the actual performance of the new restaurants is determined in early 2011.d. 2010 Royalty Pool Adjustment – Class D Exchange MultiplierOn January 1, 2010, 12 new Pizza 73 restaurants were added to the Royalty Pool as a result of newrestaurants opening between September 2, 2008 and September 1, 2009. The additional system salesfrom the 12 new restaurants are estimated at 8,230 annually, which was reduced by 6,807 in systemsales attributable to certain of the restaurants now added to the Royalty Pool whose territory adjusted apreviously existing restaurant, resulting in net, estimated Pizza 73 sales of 1,423 added to the RoyaltyPool. The total number of Pizza 73 restaurants in the Royalty Pool has increased to 81. The yield of andthe weighted average unit price used in the calculation of the Class D multiplier is determined in the samemanner as that of the Class B multiplier calculation at 14.2% and 6.54, respectively. As a result of thecontribution of the additional net sales to the Royalty Pool, Pizza Pizza’s Class D Exchange Multiplierincreased fractionally by 80% of the total adjustment or 1.0191; the new Class D Multiplier is 16.4734.This adjustment will also increase the entitlement of the holders of the Class D units to distributions ofcash and allocations of income from the Partnership. The second adjustment to the Class D ExchangeMultiplier will be adjusted to be effective January 1, 2010, once the actual performance of the newrestaurants is determined in early 2011.e. Pizza Pizza Royalty Income Fund Outstanding UnitsAs of January 1, 2010, in exchange for adding the 34 net, new Pizza Pizza and Pizza 73 restaurants tothe Royalty Pool, Pizza Pizza has received 329,910 additional Class B equivalent units and 101,912Class D equivalent units. These units represent 80% of the full Class B and Class D entitlements(412,387 and 127,390 units, respectively), with the balance to be received when the 2010 salesperformance is known with certainty.Including the 431,822 exchangeable units described above, Pizza Pizza owns equivalent, exchangeableunits equal to 26.3% of the Fund’s fully diluted units.-6-
Pizza Pizza Royalty Income FundNotes to Consolidated Financial StatementsFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars Except Number of Units and Per Unit Amounts)3. Investment in Pizza Pizza Royalty Limited PartnershipMarch 31,2010Balance – beginning of yearEquity income of the PartnershipAccretion of value on change in Royalty PoolShare of other comprehensive income of the PartnershipDistributions declared from the PartnershipBalance - end of periodThe business of the Partnership is the ownership and licensing ofRights” through two separate “Licence and Royalty Agreements”Pizza Pizza and Pizza 73 Rights by Pizza Pizza. Additionally, theunder each “Licence and Royalty Agreement” as well as performthe “Administration Agreement”. 195,047 4,1872,81880(4,622)197,510December 31,2009 188,635 17,8835,7601,260(18,491)195,047the “Pizza Pizza Rights” and the “Pizza 73with Pizza Pizza, to exploit the use of thePartnership will collect the royalty payablethe administration of the Fund pursuant to4. Future Income TaxesOn October 31, 2006, the Department of Finance (Canada) announced proposed tax legislation whichincluded a provision to eliminate the deduction of distributions from taxable income for certain forms ofpublicly traded income trusts and partnerships. The proposed legislation became a substantively enacted lawon June 12, 2007, at which time the Fund, in accordance with Canadian GAAP, gave accounting recognitionto these new taxes.As a result of the new legislation, the Fund is required to recognize future income tax assets and liabilitieswith a corresponding adjustment to future tax expense, based on temporary differences expected to reverseafter January 1, 2011 at the substantively enacted tax rate applicable to the Fund in 2011 and later. Thelegislation imposed a rate of 31.5%, which was subsequently lowered to 28.25% for 2011, 26.25% for 2012,25.5% for 2013 and 25% for 2014 and thereafter. The future taxes will reverse in the period or periods inwhich the Rights and Marks in the Partnership are reduced by means of sale or some other event.The future income tax liability arises as a result of the Fund’s proportionate share of the temporary differencebetween the accounting and tax basis, at the tax rate applicable to the Fund, on the Rights and Marks andfinancing expenses in the Partnership.Future income tax expense (recovery) is a non-cash item, which does not affect cash flow.The Fund will not be liable for current income taxes until January 1, 2011.-7-
Pizza Pizza Royalty Income FundNotes to Consolidated Financial StatementsFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars Except Number of Units and Per Unit Amounts)5. Unitholders’ EquityFund unitsMarch 31, 2010UnitsValueDecember 31, 2009UnitsValue21,818,39221,818,392 212,928212,928The Fund’s objective when managing capital is to:i)Safeguard its ability to continue as a going concern, so that it can continue to provide returns forunitholders and benefits for other stakeholders;ii)Provide an adequate return to unitholders, while maintaining adequate reserves at the Partnershiplevel; andiii) Ensure sufficient liquidity to pursue its growth strategy, while taking a conservative approach towardsfinancial leverage and management of financial risk.The Fund evaluates its capital as all components of equity, other than amounts in accumulated othercomprehensive loss relating to the cash flow hedge, and includes Pizza Pizza’s Class B and Class Dexchangeable partnership units, as they are convertible to Fund units at the respective Multiplier at theconversion date.The Fund’s amount of capital is set in proportion to risk. The Fund manages its structure and makesadjustments in light of changes in economic conditions and risk characteristics of the underlying assets. TheFund’s primary use of capital was to finance acquisitions, supported by the credit facility at the Partnershiplevel.6. Earnings per UnitBasic net earnings per unit is calculated by dividing net earnings by the weighted average number of unitsoutstanding during the period. Diluted net earnings per unit includes Pizza Pizza Class B and Class DExchangeable Partnership units using the “if converted” method. Under the “if converted” method, earningsare adjusted for earnings allocated to the Class B and Class D exchangeable partnership units interest andthe weighted average number of units is adjusted for the conversion of the Pizza Pizza Class B and Class DExchangeable Partnership units. For the purposes of the weighted average number of units outstanding,units are determined to be outstanding from the date they are issued.The following table reconciles the basic net earnings to the diluted net earnings:March 31,2010Basic net earningsEquity adjustment allocated to Class B andClass D Exchangeable Partnership units Adjusted net earnings 4,389March 31,2009 1,653-8-6,0425,1161,593 6,709
Pizza Pizza Royalty Income FundNotes to Consolidated Financial StatementsFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars Except Number of Units and Per Unit Amounts)6. Earnings per Unit, continuedThe following table reconciles the basic weighted average number of units outstanding to the diluted weightedaverage number of units outstanding:March 31,2010Weighted average number of:Fund unitsPizza Pizza Class B and Class DPartnership unitsWeighted average number of unitsoutstanding - dilutedDiluted earnings per Fund unitMarch 5,71829,022,678 0.20 0.237. Related Party TransactionsThe Fund has an administration agreement with the Partnership, whereby the Partnership provides orarranges for the provision of services required in the administration of the Fund. Pizza Pizza, as generalpartner of the Partnership, and pursuant to the Partnership Agreement, is providing certain of these services.The fee for these services, which on an annual basis shall not exceed 25, has been waived for the period.Pizza Pizza is a related party by virtue of holding Class B and Class D Partnership units which areexchangeable into units of the Fund.Other transactions with Pizza Pizza are referred to elsewhere in these consolidated financial statements.Transactions with related parties are in the normal course of operations and are recorded at the exchangeamounts.8. Cash Flow HedgesThe following is information about the Partnership’s cash flow hedges:March 31,2010Fair ValueNotionalAmountInterest rate swapInterest rate swapInterest rate swapInterest rate swap 20,00010,00017,00020,000 (400)(770)(1,306)-December 31,2009Fair Value (880)(1,497)(157)ContractExpiresJuly 23, 2012July 23, 2012July 23, 2012January 6, 2010The Fund uses equity accounting for its interest in the Partnership’s earnings and has recorded its share,effectively 73.7%, of the other comprehensive income (loss) generated by the Partnership.-9-
Pizza Pizza Royalty Income FundNotes to Consolidated Financial StatementsFor the Three Months Ended March 31, 2010 and 2009(Expressed in Thousands of Dollars Except Number of Units and Per Unit Amounts)8. Cash Flow Hedges, continuedThe Partnership has entered into three Interest Rate Swap Agreements to mitigate the risk associated withthe fact that the 47,000 bank loan bears interest at floating rates. The notional amounts of the Swaps are 20,000, 10,000 and 17,000.On the 20,000 Swap which expired on January 6, 2010, the Partnership was obligated to pay the SwapCounterparty an amount based upon a fixed interest rate of 3.55% per annum plus a fee of 1.25% and theSwap Counterparty was obligated to pay the Partnership an amount equal to the Canadian Banker’sAcceptance rate up to the expiry of the agreement. During 2009, the Partnership entered into a new InterestRate Swap Agreement to mitigate the risk associated with the fact that the Swap on the 20,000 bank loanexpired in January 2010. The new Swap agreement became effective on January 6, 2010 and obligates thePartnership to pay the Swap Counterparty an amount based upon a fixed interest rate of 2.68% per annumplus a fee of 1.25% and the Swap Counterparty will be obligated to pay the Partnership an amount equal tothe Canadian Banker’s Acceptance rate.On the 10,000 and 17,000 Swaps, the Partnership is obligated to pay the Swap Counterparty a fixedinterest rate of 5.05% plus a fee of 1.25% and the Swap Counterparty is obligated to pay the Partnership anamount equal to the Canadian Banker’s Acceptance rate.9. Financial InstrumentsFinancial Risk ManagementThe Fund has minimal financial risk as all financial instruments, with the exception of the loan receivable fromPizza Pizza, are short-term in nature. The Fund is dependent upon the royalty payments generated by thesales of Pizza Pizza and Pizza 73 restaurants. Accordingly, the Fund manages its financial risk on the loansreceivable from Pizza Pizza by monitoring the financial results of Pizza Pizza.Fair ValueThe carrying amounts of receivable from Pizza Pizza, receivable from the Partnership and distributionspayable to Fund unitholders approximates fair value given the short-term maturity of these instruments.The fair value of the loan receivable from Pizza Pizza is based on the estimated future discounted cash flowsusing a comparable market rate of interest.The cash flow hedge is recorded in the financial statements at fair value using observable inputs available forsimilar assets and liabilities in the active markets at the measurement date, as provided by sourcesindependent from the Fund.The carrying value and fair value of the financial instruments is as follows:Carrying ValueRec
For the Three Months Ended March 31, 2010 and 2009 (Expressed in Thousands of Dollars Except Per Unit Amounts) March 31, 2010 (unaudited) March 31, 2009 (unaudited) Balance, beginning of period (11,518) (11,203) Net earnings 4,389 5,116 Distributions declared (2010 – 0.2325/unit; .
state agency in exchange for the lease of state-agency owned land for oil and gas development: (1) State Land Royalty Fund; (2) Forestry Minerals Royalty Fund; and (3) Parks Mineral Royalty Fund. Eliminates signing fees, rentals, and royalty payments received by a state agency for leases of land for oil and gas development when the land is
UC Pathway Income Fund UC Pathway Fund 2015 UC Pathway Fund 2020 UC Pathway Fund 2025 . UC Pathway Fund 2030 UC Pathway Fund 2035 UC Pathway Fund 2040 UC Pathway Fund 2045 . UC Pathway Fund 2050 UC Pathway Fund 2055 UC Pathway Fund 2060 . CORE FUNDS - 13.7 billion Bond and Stock Investments . Bond Investments Short-Term UC Savings Fund
crude oil price projections 3 natural gas price projections 5 oil and gas production 7 oil production forecast 7 gas production forecast 10 mineral royalty 13 crude oil royalty 14 natural gas royalty 15 non-hydrocarbon royalty 16 plant products royalty 16 severance tax 18 crude oil severance tax 19 natural gas severance tax 20 plant products .
Calories Calories from fat Fat (grams) Saturated Fat (g.) Trans Fat (grams) Cholesterol (mg.) Sodium (milligrams) Carbohydrates (g.) Fiber (grams) Total Sugars (g.) Protein (grams) Large Thin Crust 1/8 pizza Hand Tossed 1/8 pizza Deep Dish 1/8 pizza Brooklyn 1/6 pizza Pizza Basics: Large Amount for Entire Large Pizza Crust for entire large pizza
UC Pathway Funds. UC Pathway Income Fund UC Pathway Fund 2020 UC Pathway Fund 2025. UC Pathway Fund 2030. UC Pathway Fund 2035 UC Pathway Fund 2040 UC Pathway Fund 2045. UC Pathway Fund 2050. UC Pathway Fund 2055 UC Pathway Fund 2060. UC Pathway Fund 2065. CORE FUNDS - 17.0 billion Bond and Stock Investments
TARGET DATE FUNDS - 9.1 billion UC Pathway Funds UC Pathway Income Fund UC Pathway Fund 2020 UC Pathway Fund 2025 UC Pathway Fund 2030 UC Pathway Fund 2035 UC Pathway Fund 2040 UC Pathway Fund 2045 UC Pathway Fund 2050 UC Pathway Fund 2055 UC Pathway Fund 2060 UC Pathway Fund 2065 CORE FUNDS - 12.9 billion Bond and Stock Investments Bond .
CIBC Balanced Fund . CIBC Dividend Income Fund. 3. CIBC Dividend Growth Fund. 3. CIBC Canadian Equity Fund. 3. CIBC Canadian Equity Value Fund. 3. CIBC Canadian Small-Cap Fund . CIBC U.S. Equity Fund. 3 CIBC U.S. Small Companies Fund. 3. CIBC Global Equity Fund . CIBC International Equity Fund. 3. CIBC European Equity Fund. 3. CIBC Emerging .
Income Tax Act 2007 2007 No 97 BC 6 Income tax liability of filing taxpayer 106 BC 7 Income tax liability of person with schedular income 106 BC 8 Satisfaction of income tax liability 108 Subpart BD—Income, deductions, and timing BD 1 Income, exempt income, excluded income, non- 108 residents' foreign-sourced income, and assessable income
