(5)                             (322)                 (322)        (961)        (957) 
Administrative 
 expenses                        (176)                 (123)        (496)        (414) 
Interest income                     93                    95          317          263 
Adjusted 
 earnings 
 available for 
 distribution to 
 the 
 Company and 
 Pizza Pizza 
 Limited(5)                    $ 9,566              $ 10,080     $ 28,350     $ 28,590 
Distribution on 
 Class B and 
 Class D 
 Exchangeable 
 Shares(4)                     (2,584)               (2,316)      (8,040)      (6,747) 
Current income 
 tax expense                   (1,714)               (1,833)      (5,071)      (5,168) 
Adjusted 
 earnings 
 available for 
 shareholder 
 dividends(5)                  $ 5,268               $ 5,931     $ 15,239     $ 16,675 
Add back: 
Distribution on 
 Class B and 
 Class D 
 Exchangeable 
 Shares(4)                       2,584                 2,316        8,040        6,747 
Adjusted 
 earnings from 
 operations(5)                 $ 7,852               $ 8,247     $ 23,279     $ 23,422 
 
Adjusted 
 earnings per 
 share(5)                      $ 0.239               $ 0.255      $ 0.707      $ 0.724 
Basic earnings 
 per share                     $ 0.233               $ 0.249      $ 0.701      $ 0.709 
 
Dividends 
 declared by the 
 Company                       $ 5,724               $ 5,539     $ 17,171     $ 16,187 
Dividend per 
 share                        $ 0.2325              $ 0.2250     $ 0.6975     $ 0.6575 
Payout ratio(5)                  109 %                  93 %        113 %         97 % 
 
                                                                September     December 
                                                                  30,2024      31,2023 
Working 
 capital(5) (7)                                                $ (40,672)      $ 8,236 
Total assets                                                    $ 374,159    $ 370,092 
Total 
 liabilities                                                     $ 75,277     $ 76,184 
 
 
 
(1)  The number of restaurants for which the Pizza Pizza 
      Royalty Limited Partnership (the "Partnership") earns 
      a royalty ("Royalty Pool"), as defined in the amended 
      and restated Pizza Pizza license and royalty agreement 
      (the "Pizza Pizza License and Royalty Agreement") 
      and the amended and restated Pizza 73 license and 
      royalty agreement (the "Pizza 73 License and Royalty 
      Agreement") (together, the "License and Royalty Agreements"). 
      For the 2023 fiscal year, the Royalty Pool includes 
      644 Pizza Pizza restaurants and 99 Pizza 73 restaurants. 
      The number of restaurants added to the Royalty Pool 
      each year may differ from the number of restaurant 
      openings and closings reported by Pizza Pizza Limited 
      ("PPL") on an annual basis as the periods for which 
      they are reported differ slightly. 
(2)  Same store sales growth ("SSSG") is a supplementary 
      financial measure under NI 52-112 and therefore may 
      not be comparable to similar measures presented by 
      other issuers. SSSG means the change in Period's gross 
      revenue of a particular Pizza Pizza or Pizza 73 restaurant 
      as compared to sales in the previous comparative Period, 
      where the restaurant has been open at least 13 months. 
      Additionally, for a Pizza 73 restaurant whose restaurant 
      territory was adjusted due to an additional restaurant, 
      the sales used to derive the Step-Out Payment (calculated 
      as the difference between the average monthly Pizza 
      73 Royalty payment attributable to that Adjusted Restaurant 
      in the 12 months immediately preceding the month in 
      which the territory reduction occurs, less the Pizza 
      73 Royalty payment attributable to the restaurant 
      in the current month) may be added to sales to arrive 
      at SSSG. SSSG does not have any standardized meaning 
      under International Financial Reporting Standards 
      ("IFRS"). See "Exhibit One: Reconciliation of Non-IFRS 
      Measures". 
(3)  The Company, indirectly through the Partnership, incurs 
      interest expense on the $47 million outstanding bank 
      loan. Interest expense also includes amortization 
      of loan fees. 
(4)  Represents the distribution to PPL from the Partnership 
      on Class B and Class D Units of the Partnership. The 
      Class B and D Units are exchangeable into common shares 
      of the Company ("Shares") based on the value of the 
      Class B Exchange Multiplier and the Class D Exchange 
      Multiplier at the time of exchange as defined in the 
      License and Royalty Agreements, respectively, and 
      represent 25.2% of the fully diluted Shares at September 
      30, 2024 (December 31, 2023 -- 23.9%). During the 
      quarter ended March 31, 2024, as a result of the final 
      calculation of the equivalent Class B and Class D 
      Share entitlements related to the January 1, 2023 
      Adjustment to the Royalty Pool, PPL was paid a distribution 
      on additional equivalent Shares as if such Shares 
      were outstanding as of January 1, 2023. Included in 
      the three months ended March 31, 2024, is the payment 
      of $288,000 in distributions to PPL pursuant to the 
      true-up calculation (March 31, 2023 - PPL received 
      $nil). 
(5)  "Adjusted earnings available for distribution to the 
      Company and Pizza Pizza Limited", "Adjusted earnings 
      from operations", "Adjusted earnings available for 
      shareholder dividends", "Adjusted earnings per Share", 
      "Interest paid on borrowings", "Payout Ratio", and 
      "Working Capital" are non-GAAP financial measures 
      under NI 52-112. They do not have any standardized 
      meaning under IFRS and therefore may not be comparable 
      to similar measures presented by other issuers. See 
      "Exhibit One: Reconciliation of Non-IFRS Measures". 
(6)  System Sales (as defined in the License and Royalty 
      Agreements) reported by Pizza Pizza and Pizza 73 restaurants 
      include the gross sales of Pizza Pizza company-owned, 
      jointly-controlled and franchised restaurants, and 
      the monthly Make-Whole Payment, excluding sales and 
      goods and service tax or similar amounts levied by 
      any governmental or administrative authority. System 
      Sales do not represent the consolidated operating 
      results of the Company but are used to calculate the 
      royalties payable to the Partnership as presented 
      above. 
(7)  Working capital includes the reclassification of the 
      credit facility to current liabilities, see "Exhibit 
      One: Reconciliation of Non-IFRS Measures - Working 
      Capital". 
 

A copy of the Company's unaudited interim condensed consolidated financial statements and related Management's Discussion and Analysis ("MD&A") will be available at www.sedarplus.ca and www.pizzapizza.ca after the market closes on November 4, 2024.

As previously announced, the Company will host a conference call to discuss the results. The details of the conference call are as follows:

 
Date:                       November 4, 2024 
Time:                       5:30 p.m. ET 
Call-in number:                             416-945-7677 / 888-699-1199 
Recording call in number:                   289-819-1450 / 888-660-6345 
                            Available until midnight, November 18, 2024 
 
Conference ID:                                                   55147# 
 

A recording of the call will also be available on the Company's website at www.pizzapizza.ca.

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including information regarding the Company's dividend policy, its ability to meet covenants and other financial obligations, and the potential business and financial impacts of the COVID-19 pandemic on the Company, PPL and its franchisees and restaurant operators and their ability to achieve their business objectives, constitute "forward-looking" statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this report, such statements include such words as "may", "will", "expect", "believe", "plan", and other similar terminology in conjunction with a discussion of future events or operating or financial performance. These statements reflect management's current expectations regarding future events and operating and financial performance and speak only as of the date of this MD&A. The Company does not assume any obligation to update any such forward looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. These forward-looking statements involve a number of risks and uncertainties. The following are some factors that could cause actual results to differ materially from those expressed in or underlying such forward-looking statements: changes in national and local business and economic conditions including those resulting from the COVID-19 pandemic (such as customers' ability and willingness to visit restaurants and their perception of health and food safety issues, discretionary spending patterns and supply chain limitations, and the related financial impact on PPL and its franchisees and restaurant operators), impacts of legislation and governmental regulation, accounting policies and practices, competition, changes in demographic trends and changing consumer preferences, and the results of operations and financial condition of PPL. The foregoing list of factors is not exhaustive and should be read in conjunction with the other information included in the foregoing MD&A, the PPL financial statements for the period ended December 31, 2023 and the related MD&A and the Company's Annual Information Form.

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