Pizza Pizza Royalty Income Fund Announces Its Conversion To A Corporation And December Distribution

December 20, 2012 // // Toronto, Ontario – Pizza Pizza Royalty Income Fund (the “Fund”) (TSX: PZA.UN) announced today that it will complete its previously-announced conversion to a corporate structure on December 31, 2012 (the “Conversion”). The Conversion will result in the reorganization of the Fund´s income trust structure under a publicly-listed corporation, Pizza Pizza Royalty Corp. (“PPRC”), that will own the Fund´s operating subsidiary, Pizza Pizza Royalty Limited Partnership (the “Partnership”). Unitholders of the Fund will receive, for each unit held, one common share of PPRC. It is expected that the Conversion will be completed on a tax-free rollover basis for Canadian income tax purposes. The common shares of PPRC are expected to commence trading on the Toronto Stock Exchange under the symbol “PZA” on or about January 2, 2013. Concurrently, the units of the Fund will be delisted.

The Fund also announced today that on January 15, 2012 it will pay a cash distribution of $0.06 per unit to unitholders of record on December 31, 2012. After conversion, PPRC will pay a monthly dividend per share of not less than the amount currently paid per Fund unit, with the first monthly dividend payable to holders of record on January 31, 2013.

Currently, distributions paid by the Fund are treated in part as an eligible taxable dividend and in part as a return of capital for tax purposes. Following the Conversion, the full amount of dividend paid by PPRC will be treated as an eligible taxable dividend when paid to a Canadian resident. The amount of any dividends payable by PPRC will be at the discretion of the board of directors of PPRC and will be evaluated periodically. PPRC´s dividend policy may be revised subject to business circumstances and expected capital requirements depending on, among other things, the Partnership´s royalty income, its debt service requirements, any restrictions under any credit arrangements, the satisfaction of applicable solvency tests for the declaration and payment of dividends and other conditions existing from time to time.

About the Fund

The Fund is a limited purpose, open-ended trust established under the laws of Ontario to indirectly acquire the trademarks and trade names used by Pizza Pizza Limited (the “Company”) in its Pizza Pizza and Pizza 73 branded restaurants.

A key attribute of the Fund is that royalty revenues are based on top-line, system sales of the royalty pool restaurants and not on the profitability of either the Company or the restaurants in the royalty pool. The success of the Fund depends primarily on the ability of the Company to maintain and increase system sales of the royalty pool and to meet its royalty obligations.

The Fund´s trust units are listed on the Toronto Stock Exchange under the symbol PZA.UN.

Forward Looking Statements

This release may contain certain forward-looking statements, which reflect management´s expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in the Fund´s filings with the Canadian securities regulatory authorities, including its quarterly reports, its annual information form dated March 28, 2012 for the Fund´s financial year ended December 31, 2011 and its management information circular dated April 26, 2012.


Curtis Feltner
Chief Financial Officer
Pizza Pizza Limited
(416) 967-1010 x307 and 


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