Canadian Food Services Year In Review

June 22, 2015 Canadian Food Services Year In Review Executive Summary

Disclaimer: This report is intended as a summary of the strategic statements made in recent annual reports of publicly traded food service companies operating in Canada. The service is only designed to provide an executive summary of these documents. Full details are available in the individual annual reports which can be sourced from the respective companies. Comments should not be construed as either positive or negative endorsements, nor do they constitute financial advice. Consult a licensed financial professional before making any financial investment.

Sales (Millions $CDN) $957 +11.8% Operating Income $25 +12.9% Net Earnings Per Share $1.19-25.3% Share Price ($CDN) $26.57 +21.8% # of Restaurants 790 Employees Year End December 31, 2014 approx. 16,000 A&W Revenue Royalties Income Fund owns, indirectly through Trade Marks and the Partnership, the A&W trade-marks used in the A&W quick service restaurant (QSR) business in Canada. The Partnership has granted Food Services a licence to use the A&W trade-marks in Canada. Q4 same store sales growth of 7.9% and fiscal year same store sales growth of 6.3%. Increase due to continued progress on food services strategic initiatives. Food Services strategy to differentiate A&W with better ingredients, such as its beef raised without the use of hormones or steroids, natural eggs and chicken raised without the use of antibiotics, continued to build customer traffic and increase sales. Increase in sales due same store sales growth and the sales from the 30 net new restaurants added. Opened 37 new restaurants; 26 of the new restaurants are in Ontario and Quebec, which are important growth markets. In September, introduced eggs farmed in Canada from hens fed a fully vegetarian diet without animal by-products. Launched a new breakfast menu including plated breakfast items such as pancakes, omelettes and the All Canadian breakfast, and new breakfast wraps. In October, launched new initiative of chicken raised without the use of antibiotics and fed a grain-based, vegetarian diet without animal by-products. In 2015, partnered with Van Houtte to serve organic and Fair Trade coffee. Over 480 restaurants in the chain have the new, re-imaged design. Strategy to reposition and differentiate A&W as a better burger QSR restaurant. Six new restaurants are under construction and expected to open in the coming months. Many restaurants are in the process of completing the re-image to the new design. Source: 2014 A&W Revenue Royalties Income Fund Annual Report

Sales (Millions $Cdn) $782 +3.5% Operating Income $30 +3.7% Net Earnings Per Share $1.06 +9.3% Share Price ($CDN) $21.61 +4.3% # of Restaurants 366 Employees 22,000 Year End December 31, 2014 Boston Pizza International achieved record sales of $1,012 million and Boston Pizza Royalties Income Fund achieved record franchise sales of $782 million. Same store sales growth of 1.7%. Opened 14 full-service Boston Pizza restaurants: 8 in Western Canada, 6 in Ontario. Celebrated the brand s 50th anniversary on Aug. 12/14, by serving 85,000 individual pizzas to guests from coast to coast. Updated 53 restaurants to showcase new Boston Pizza design standards. Boston Pizza International named to the Platinum Club of Canada s 50 Best Managed Companies. Launched Boston Pizza Foundation (BPF) Future Prospects, supporting Canadian children and youth. Since 2002, the royalty pool has expanded from 154 to 366 restaurants. Announced 150th consecutive monthly distribution to unit holders. In January, launched a new BP kids pak and offered a new lineup of kids meals valued at $6.99. The Valentine s Day heart-shaped pizza fundraiser raised more than $384,000 to support different sponsored foundations. The Pizza Game Changers campaign featured new, innovative pizza-themed items and a customer vote ushered in the pizza cake as the next big innovation. Announced new partnership with Montreal Canadiens defenseman P.K. Subban to help promote Boston Pizza Quebec. In September, brought back the popular Kids Card program where guests donate $5 to BPF Future Prospects in exchange for a Kids card and 5 free kids meals. Launched digital and loyalty platform MyBP with enhanced online ordering. Source: 2014 Boston Pizza Royalties Income Fund Annual Report There are currently three new locations under construction with more planned for later in 2015. In Q1, plan to launch new campaign We ll Make You A Fan. Continue to focus on culinary innovation and annual menu re-pricing.

Sales (Millions $USD) $1,197 +4.4% Operating Income $182-65.1% Net Earnings Per Share -$0.20-129.9% Share Price ($CDN) $39.04 n/a Burger King Restaurants Tim Hortons Restauransts BK Franchised employees TH Franchised employees Year End December 31, 2014 14,372 4,671 360,000 96,000 Restaurant Brands International Limited Partnership was registered on Oct. 27, 2014 as a limited partnership and one of the largest Quick Service Restaurant (QSR) businesses in the world. The Burger King and Tim Hortons brands have similar franchised business models and are managed independently while benefitting from global scale. Tim Hortons Restaurant Count: Canada (3,729), United States (884), United Arab Emirates, Qatar, Kuwait, Oman and Saudi Arabia (58). System-Wide Restaurant Count (19,043): BK U.S. & Canada (7,406), BK Europe, Middle East & Africa (3,802), BK Latin America & Caribbean (1,698), BK Asia Pacific (1,466), Tim Hortons (4,671). Burger King increased by 705 net new units and it is one of the fastest growing Quick Service Restaurants (QSRs) in the world. Burger King adopted a new strategy of launching fewer, more impactful products. Tim Hortons innovation successes included Dark Roast Coffee (first new blend in 50 years), the Crispy Chicken Sandwich, and side offerings to increase combo sales. Burger King comparable sales growth of 2.1% reflects a sales growth increase in all segments. This is mainly due to the continued strategy of launching fewer, more impactful products, complemented by value promotions. BK franchise royalties increased $47.8 million driven by net restaurant growth of 705 restaurants, the net refranchising of 360 Burger King restaurants during 2013 and a comparable sales growth increase. Four distributors currently service approximately 89% of U.S. Burger King system restaurants. Intend to leverage the master franchise joint venture model and global partners to accelerate Tim Hortons International growth over time. Tim Hortons will continue to focus on offerings that expand the daypart and combo penetration, while streamlining restaurant execution and complexity. Source: Restaurant Brands International Limited 10-K 2014

Sales (Millions $USD) $6,286 +6.2% Operating Income $648-22.8% Net Earnings Per Share $2.15-31.7% Share Price ($CDN) $49.55-6.2% # of Restaurants 2,207 Employees 206,489 Year End May 25, 2014 Darden Restaurants is the world s largest company-owned and operated fullservice restaurant company. In May, entered into an agreement to sell Red Lobster and certain other assets and liabilities for $2.11 billion in cash. The 6.2% increase in sales was mainly due to opening 70 net new restaurants, a 1.6% blended same restaurant sales increase for The Capital Grille, Bahama Breeze, Season s 52, Eddie V s and Yard House and a 2.7% same restaurant sales increase for LongHorn Steakhouse. This was partially offset by a same restaurant sales decrease for Olive Garden. 45 franchised restaurants were in operation in Japan, the Middle East, Mexico, Brazil and Peru. Store Count (2,207): Canada - Olive Garden (6), Red Lobster (27). United States - Olive Garden (831), Red Lobster (679) & combined LongHorn Steakhouse, The Capital Grille, Bahama Breeze, Season s 52, Eddie V s and Yard House (664). Sales ($6.2bn): Olive Garden: decreased -1.1% to $3.6 billion. LongHorn Steakhouse: increased +12.4% to $1.4 billion. Combined The Capital Grille, Bahama Breeze, Season s 52, Eddie V s and Yard House: increased 25.2% to $1.2 billion. Completed sale of Red Lobster. Same restaurant sales are expected to remain flat or increase by 1.0% for Olive Garden and 2.0% for LongHorn Steakhouse. Expect a blended same restaurant sales increase for Capital Grille, Bahama Breeze, Season s 52, Eddie V s and Yard House of approximately 2.0%. Total sales expected to increase between 5.0% - 7.0%. Expect to open 37 restaurants; new restaurant growth mainly driven by Longhorn. Source: Darden Restaurants Inc. Form 10-K 2014

Sales (Millions $Cdn) $521 +9.7% Operating Income $24 +6.5% Net Earnings Per Share $0.66 +46.7% Share Price ($CDN) $17.47 +6.3% The Keg Royalties Income Fund trades on the Toronto Stock Exchange and together with its subsidiary, Keg Rights Limited Partnership, receives 4% of the gross sales of Keg Restaurants. Sales in the full-service restaurant category increased by 4.8%. Same store sales increased by 4.9% in Canada and 6.4% in the US. The first choice of over 67% of Canadian diners when choosing a steak dinner. Gross Keg Restaurants sales increased +9.7% to $521 million. Total System Sales: Corporate Keg Restaurants - $262m Franchised Keg Restaurants - $275m In 2014, closed 2 corporate restaurants in West Vancouver and Surrey, B.C. and closed one franchised restaurant in Kelowna, B.C. In 2015, closed closed two corporate restaurants in Seattle, Washington. In Jan/15, added four new restaurants to the royalty pool and removed five restaurants from the royalty pool. # of Restaurants 103 Employees 8,100 Year End December 31, 2014 Sales in the full-service restaurant category are projected to increase in 2015 by 3.6%. Continue to focus on growing same-store sales. Plan to expand corporate and franchised restaurants in Canada and the US. Plan to open 5 new restaurants prior to Oct. 2, 2015, consisting of 3 corporate and 2 franchised restaurants in Canada. Corporate market expansion in the US will focus on 3 target markets: Phoenix, Arizona; Denver, Colorado; and Dallas, Texas. Advertising and promotions programs will continue to focus on food taste, quality and excellent service in a friendly atmosphere. Source: The Keg Royalties Income Fund Year End Report 2014

Sales (Millions $CDN) $27,441-2.4% Operating Income $7,949-9.3% Net Earnings Per Share $4.85-13.2% Share Price ($CDN) $93.70-3.4% # of Restaurants 36,258 Employees 420,000 Year End December 31, 2014 Global comparable sales decreased 1.0%, reflecting negative guest traffic in all segments. Contributors to decreased comparable sales included supplier issues in China, Japan and certain other markets, a volatile operating environment in Russia and the Ukraine, and underperformance in the U.S. Completed more than 930 re-images. Opened more than 1,316 restaurants. Percent of Revenues: US (47%), Europe (34%), Asia Pacific, Middle East & Africa - APMEA (12%), Other (7%). US: comparable sales decreased 2.1%; brought in new leadership to provide innovative thinking and a fresh strategic perspective. Announced actions to create a flatter, more nimble U.S. organization. Focused on continued growth at breakfast and an ongoing emphasis on core food and beverages. Launched a National Food Quality campaign. First in industry to accept Apple Pay in the drive-thru. Opened 222 new restaurants and reimaged approximately 260 locations. Europe: comparable sales decreased 6.0%, reflecting negative performance in Germany and Russia, mostly offset by positive performance in the UK. Expanded the McCafe platform with over 4,000 restaurants now serving blended ice beverages. Opened 320 restaurants and completed 260 restaurant reimages. Have over 2,000 self-order kiosks and mobile ordering and payment capability systems available in certain markets. APMEA: comparable sales decreased 3.3% due to negative performance in Japan and China, which was slightly offset by Australia. Conducted recovery plans in China after food quality supply issues. Completed 340 restaurant reimages and opened 655 new restaurants, including 227 in China. Source: McDonald s Annual Report 2014 Will spend $2.0 billion in capital expenditures, which is the lowest level spent in five years. Will target fewer openings in the most challenged markets. Plans to begin expanding the Create Your Own Taste platform in the US., and Australia will be a lead market to roll-out Create Your Taste across the majority of its restaurants. Plan to open 125 restaurants in the US, 250 restaurants in Europe, and 550 restaurants in APMEA.

Sales (Millions $CDN) $888 +22.0% Operating Income $34,530-0.2% Net Earnings Per Share $1.33-0.7% Share Price ($CDN) $34.95 +11.0% # of Restaurants 2,727 Employees Year End November 30, 2014 435 corporate MTY Food Group is a franchisor in the quick service food industry under a multitude of different banners. The company also owns a distribution center and food processing plant in Quebec. MTY s locations can be found in food courts and shopping malls, streetfront and in convenience stores cinemas, petroleum retailers and amusements parks. Location type store count percentages: Shopping mall and food court - 38% Street front - 40% Non-traditional format - 22% Geographical location of stores: Ontario (41%), Quebec (31%), Western Canada (21%), Maritimes (3%) and International (4%). Approximately 70% of the sales increase was a result of acquisitions, while the rest came from internal growth. In Jul/14, acquired the Canadian assets of Madisons New York Grill & Bar for $12.9 million. In Oct/14, completed acquisition of Cafe Depot, Muffin Plus, Sushi-Man and Fabrika for $13.95 million. In Dec/14, completed acquisition of Manchu Wok, Wasabi Grill & Noodle and SenseAsian for $7.9 million. Completed the acquisition of Van Houtte Cafe Bistros for $0.95 million. Experienced a net decrease of 30 outlets. Approximately 50% of stores closed were located in Ontario. Focus on restoring positive same store sales through innovation, improving customer service and maximizing value offered to customers. Focus on finalizing the integration of recently acquired brands. Focus on adding new locations of existing concepts and will continue to seek potential acquisitions. Source: MTY Group Annual Report 2014

Sales (Millions $CDN) $505 +2.9% Operating Income $32 +3.7% Net Earnings Per Share $0.83 +5.1% Share Price ($CDN) $14.06 +5.2% # of Restaurants 732 Employees: Pizza 73 Pizza Pizza Year End November 30, 2014 630 102 Restaurants: Pizza Pizza restaurants (629), Pizza 73 restaurants (93). Same store sales growth of 1.1%. Same store sales growth: Pizza Pizza (-0.3%), Pizza 73 (7.6%). Pizza Pizza sales increased 1.8% to $415.7 million, and represent 82% of system sales. Pizza 73 sales increased 8.5% to $89.7 million, and represent 18% of system sales. Pizza 73 Restaurant Count: BC (2), AB (96), SK (4). Pizza Pizza Restaurant Count: BC (9), AB (1), SK (4), MB (18), ON (549), QU (38), NFLD (1), PEI (1), NS (9). Over 40% of orders are through digital platforms. Launched the Club 11-11 loyalty card initiative and expanded the mobile ordering platform by adding an Android ordering app. New product offerings included meatball topping, pizza-dillas, deep fried pickles, and jalapeno poppers. Pizza 73-28 non-traditional locations with limited hours and menu. Traditional Pizza 73 restaurants in Alberta mainly in urban centres such as Edmonton and Calgary. Sales through the Pizza 73 call centre and online ordering account for approximately 91% of sales. The Pizza 73 business also includes two central food distribution centres and a call centre. Opened 32 new restaurants. Number of Pizza Pizza restaurants: Traditional (408) & Non-traditional (222). Continued to focus on national expansion program, with most openings projected to be in Quebec and Manitoba. Continue to focus on staying relevant to the consumer, modernizing the customer experience and maintaining brand dominance in key markets. Source: Pizza Pizza Royalty Corp. 2014 Annual Report

Sales (Millions $CDN) $182.8-4.5% Operating Income $(31) -310.8% Net Earnings Per Share $(2.66) -259.5% Share Price ($CDN) $3.05-40.2% # of Cafes 347 Employees (franchised) 4,000 Canada s largest specialty coffee cafe franchisor and retailer. Maintains a strategic partnership with its independent roaster of coffees and with the Swiss Water Decaffeinated Coffee Company. The coffee portfolio contains over 19 types of coffee. Added flat white to the espresso menu. Introduced Piaggio Italian mini-truck sampling stations to help launch Flat White as they traveled to communities across the country. Same cafe sales decreased 4.7%. Opened one cafe and closed 3 cafes. Cafe Count: Company Operated (35), Franchisees (312). The updated brand - Second Cup Coffee Co. - was designed to convey the elevated premium status of the brand as well as the new modernization. Cafe of the Future displays the company s new design with an expanded portfolio of coffees, unique milk bar, new baked goods, a modern layout & architectural design, wireless charging stations for electronic devices, a custom music program, a community wall mural, and a stylish new employee dress code. Introducing oatmeal and hearty granola bar where customers can customize their choice. Designed new, colorful take-away cups. Year End December 27, 2014 Major initiatives set forth in 2014 including the restructuring of Coffee Central, improvements to the franchise model, the launch of the new cafe of the future, and the development of the three-year plan have been completed. The foundation has been set and the company is poised to gain ground in 2015. Source: Second Cup Annual Report 2014

Sales (Millions $CDN) $16,448 +10.6% Operating Income $3,081 +1,047% Net Earnings Per Share $2.75 +27,400% Share Price ($CDN) $75.17-2.8% # of Stores 14,191 Employees 191,000 Comparable store sales grew 6%, driven by a 3% increase in the number of transactions and a 3% increase in average ticket. Revenues from sales of consumer packaged goods comprised 8% of total net revenues. USA, Canada & Latin America (Americas): Revenues in the Americas segment grew by 9% and comparable store sales grew 6%; opened 698 net new stores. Europe, Middle East & Africa (EMEA): revenues grew 12%, comparable store sales grew 5%; opened 171 net new stores. China/Asia Pacific (CAP): 23% increase in revenues and 7% increase in comparable store sales; opened 742 net new stores. Channel Development: net revenues increased 11%, primarily as a result of increased sales in premium single serve products; closed 24 stores. Total Revenues (millions): Americas ($11,981), EMEA ($1,295) and CAP ($1,130), Channel Development $1,546, Other ($497). Rolled out the La Boulange food platform in the U.S. Opened the most stores in the U.S. (505), China (350), South Korea (141) and Canada (108). Retail Sales Mix: Beverages (73%), Food (18%), Packaged and Single-Serve Coffees & Teas (4%), Other (5%). Year End September 28, 2014 Expect revenue growth of 16%-18%, including 6%-7% growth from the purchase of Starbucks Japan. Expect one half of net new store openings will be in the China/Asia Pacific segment and the remaining half coming from the Americas. Capital expenditures are expected to be approximately $1.4 billion, mainly for new stores and store renovations. Expect China to grow to become one of the largest markets outside the U.S. Source: Starbucks Annual Report 2014

Sales (Millions $CDN) $2,061-17.1% Operating Income $252 +86.1% Net Earnings Per Share $0.33 +175% Share Price ($CDN) $8.77 +85.4% Operated restaurants Franchised restaurants 957 5,558 Employees 31,200 Year End December 28, 2014 50% partner in Canadian real estate joint venture with Tim Hortons. There are 103 restaurants in operation that are owned by the JV. Approximately 85% of restaurants are franchised. Sales decrease mainly due to the sale of Wendy s company-owned restaurants to franchisees. In Aug/14, announced a plan to sell all company-owned restaurants in Canada to franchisees. Expect to complete by the end of the second quarter 2015. In Feb/15, announced plans to sell an additional 500 restaurants to franchisees. The 8 leading states by number of operating units are Florida, Ohio, Texas, Georgia, California, Michigan, Pennsylvania, and North Carolina. There are 102 company-owned and 260 franchised restaurants in Canada. Completed the sale of 174 U.S. company-owned restaurants to franchisees. There are 403 restaurants Internationally outside the US and Canada and the company has instituted major development programs in other countries since 2009. Revenues: US ($1,797M), Canada ($248M) and other International ($17M). Opened 103 restaurants and closed 145 under-performing restaurants. 64.7% of sales were made through the pick-up window. Same store sales: Company-owned (+2.3%), franchised (+1.9%) and system-wide (+1.9%). The New Bakery Co. of Ohio supplied buns to 715 restaurants operated by Wendy s and 2,232 restaurants operated by franchisees. Properties: US (1,232,613), Canada (38,538) and other International (87). 5 production facilities supply all of Wendy s hamburgers in the US and 8 production facilities supply all of Wendy s chicken in the US. Source: Wendy s Annual Report 2014 Plans for significantly more and new reimaged company and franchisee restaurants. Plans to reduce company-owned restaurants to 5% by the middle of 2016. Plan to reimage approximately 450 existing company-owned and franchised restaurants. Expect capital expenditures of $270.0 million.

Sales (Millions $CDN) $13,279 +1.5% Operating Income $1,557-13.4% Net Earnings Per Share $2.37-1.7% Share Price ($CDN) $73.14-1% Restaurants +41,000 Employees 537,000 Year End December 27, 2014 & History China Division: have 4,800 KFC restaurants in 1,000 cities (#1 foreign brand in China); +1,300 Pizza Hut restaurants in 350 cities; Pizza Hut Home Service s menu is 40% Chinese food; opened 737 new restaurants; In December, started initial rollout of premium coffee in Shanghai KFC restaurants. India Division: System sales increased 14%; Opened 156 restaurants. KFC Division: Strong system sales growth led by Russia, Africa, Thailand, the UK, continental Europe and Australia; Opened 670 restaurants; U.S. same-store sales increased 6% in Q4. Pizza Hut Division: Opened 465 new international units; Launched new menu in the U.S. driven by the Flavor of Now positioning. Taco Bell Division: Opened 263 new restaurants; New mobile app launch received 2 million downloads; Momentum attributable to Live Mas brand positioning. Yum Restaurants International (YRI): 1,000 franchisees; KFC & Pizza Hut are global category leaders; Taco Bell has 250 restaurants outside the U.S.; 57 restaurants per million people in the U.S.; 2 restaurants per million people in the top 10 emerging markets. 91% of restaurants outside China and India are franchise owned. Increased dividend to 11%, marking the 10th consecutive year of double-digit dividend rate increase. David Novak stepped down as CEO and is serving as executive chairman. Greg Creed is the new CEO. Plan to open 700 new units in China. KFC China will launch two menu revamps. Plan to open an open kitchen Taco Bell restaurant in the US., modeled after the same restaurant model from Bangalore, India. Plan to open 2,000+ new International restaurants in 2015, 90% which will be opened by franchisees. Plan to take franchise mix outside of China and India from 91% to 95% over the next three years. Source: Yum Brands, Inc. Annual Report - December 27, 2014

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