A&W Revenue Royalties Income Fund announces third quarter 2009 results and
special distribution

TRADING SYMBOL: The Toronto Stock Exchange - AW.UN

VANCOUVER , Oct. 15 /CNW/ -

    
    Highlights

    -   Same store sales growth 0.3% for the third quarter; 2.5% year to date
    -   Royalty income increased to $5.4 million, up 2.9%
    -   Distributable cash(2) increased to $5.2 million, up 2.1%
    -   Year to date distributable cash(2) increased to $14.1 million, up
        3.2%
    -   Trustees announce Special Distribution of $0.10 per unit, payable
        November 30
    

A&W Revenue Royalties Income Fund (the Fund) reported today results for the third quarter ended September 6, 2009 . A copy of the full quarterly report will be available on www.sedar.com and www.awincomefund.ca on or before October 19, 2009 .

Same store sales growth in A&W restaurants is the most important driver of growth in the Fund. A&W posted its 26th straight quarterly increase in same store sales with a gain of 0.3% for the quarter. Royalty income increased by 2.9% to $5.4 million compared to $5.3 million in the same quarter of 2008, due to the same store sales growth and the addition of new restaurants to the Royalty Pool.

Year to date same store sales growth is now 2.5% and year to date royalty income increased 4.1% to $14.9 million compared to $14.3 million in 2008 year to date.

"With weak economic conditions and high unemployment weighing on Canada's foodservice industry, our same store sales growth of 0.3% for the quarter and 2.5% year to date is a solid result," said Paul Hollands , President and Chief Executive Officer of A&W Food Services of Canada Inc. (Food Services). "The launch of the Cheddar Bacon Uncle Burger in July enjoyed good success and enhanced our position as offering the best tasting burgers. The continued focus on Cruisin' the Dub programs also contributed to the sales increases, which are noteworthy when compared to the exceptionally strong same store sales growth in 2008. We are pleased to be able to pay a second Special Distribution to unitholders this year."

A&W to Host Conference Call at 1:00 p.m. PST on October 15, 2009

A&W Revenue Royalties Income Fund will hold a conference call to discuss third quarter results on Thursday, October 15, 2009 at 1:00 p.m. Pacific Time ( 4:00 p.m. Eastern Time ). The call can be accessed by dialling toll-free 1-800-814-4861 or [phone]. A replay will be available until October 29, 2009 , by dialling toll-free 1-877-289-8525 or [phone] Passcode: 4170522 followed by the number sign.

    
    -------------------------------------------------------------------------
    Sales Highlights                Q3 2009    Q3 2008   YTD 2009   YTD 2008
    -------------------------------------------------------------------------
    Same store sales growth            0.3%       6.5%       2.5%       7.4%

    Sales reported by the
     restaurants in the Royalty
     Pool(1)                       $180,253   $175,256   $496,824   $477,447

    Number of restaurants in
     the Royalty Pool                   685        676        685        676
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Financial Highlights            Q3 2009    Q3 2008   YTD 2009   YTD 2008
    -------------------------------------------------------------------------
    Royalty income(1)                $5,408     $5,257    $14,905    $14,323

    General and administrative
     expenses                           $57        $34       $480       $325

    Net third party interest
     expense                           $133       $111       $387       $329

    Recovery of current
     income taxes                         -          -       ($43)         -

    Financing fees                        -         $1          -        $26

    Total distributable cash
     generated for distributions
     and dividends(2)                $5,218     $5,111    $14,081    $13,643

    Distributable cash(2) per
     equivalent unit (2009 -
     14,266,381 units; 2008 -
     13,957,962 units)               $0.366     $0.366     $0.987     $0.977

    Distributions and dividends
     declared per equivalent unit    $0.318     $0.318     $0.848     $0.848

    Special distribution per
     equivalent unit                      -          -     $0.100     $0.100

    Trade Marks' net earnings        $1,086     $1,064     $2,045     $1,892

    The Fund's net earnings(3)       $2,698     $2,694     $7,614     $7,888

    The Fund's basic and diluted
     earnings per unit
     (8,340,000 units)               $0.324     $0.323     $0.913     $0.946
    -------------------------------------------------------------------------
    ($ in thousands except per unit amounts.)

    (1) Year to date royalty income was impacted by the shorter first quarter
        in 2009. Q1 2009 had 81 days of sales, compared to 83 days in Q1
        2008.
    (2) Distributable cash is not an earnings measure recognized by generally
        accepted accounting principles ("GAAP") and therefore may not be
        comparable to similar measures presented by other issuers. This
        information is provided as it identifies the amount of actual cash
        available to pay distributions to unitholders and dividends to Food
        Services.
    (3) The Fund's year to date net earnings were impacted by a non-cash
        dilution gain recognized in Q1 2009 which was $304,000 lower than the
        dilution gain recorded in Q1 2008. Year to date net earnings were
        also impacted by lower interest income for Q1 2009 which was based on
        81 days compared to 83 days in Q1 2008.
    

Financial Results

Distributable cash available to pay distributions to unitholders and dividends to Food Services increased by $107,000 or 2.1% to $5,218,000 for the quarter and by $438,000 or 3.2% to $14,081,000 year to date. The increase for the quarter and year to date was due to the increase in royalty income, less an increase in cash expenses, interest and taxes.

Royalty income for the quarter increased by $151,000 compared to the same quarter in 2008, and cash expenses, interest and taxes increased by $44,000 . Year to date royalty income increased by $582,000 compared to 2008 year to date, and cash expenses, interest and taxes increased by $144,000 . The increases in royalty income were driven by the same store sales growth and the increase in the number of restaurants in the Royalty Pool to 685 in 2009 from 676 in 2008. The higher cash expenses, interest and taxes were primarily due to costs associated with the internal reorganization of the Fund's subsidiary A&W Trade Marks Inc. (Trade Marks) involving the creation of A&W Trade Marks Limited Partnership (TMLP), which took place earlier this year.

Distributable cash generated per fully diluted unit and equivalents was 36.6 cents for the third quarter and 98.7 cents for 2009 year to date. Monthly distributions of 31.8 cents per unit were declared in the quarter and 84.8 cents year to date. The current monthly distribution rate of 10.6 cents per unit translates into an annualized distribution of $1.272 per unit. In addition, a Special Distribution of 10 cents per unit was paid in May this year. Food Services earns dividends on its investment in Trade Marks at the same rate.

The Trustees of the Fund have approved the payment of a second Special Distribution of 10 cents per unit, payable on November 30, 2009 to unitholders of record as at November 15, 2009 .

Overview

The Fund is a limited purpose trust established to invest in Trade Marks, which through its interest in TMLP, owns the A&W trade-marks used in the A&W quick service restaurant business in Canada . The A&W trade-marks comprise some of the best-known brand names in the Canadian foodservice industry. In return for licensing Food Services to use its trade-marks, Trade Marks (through TMLP) receives royalties equal to 3% of the sales of A&W restaurants in the Royalty Pool. A&W is the second largest quick-service hamburger restaurant chain in Canada . Operating coast-to-coast, A&W restaurants feature famous trade-marked menu items such as The Burger Family, Chubby Chicken and A&W Root Beer.

The Royalty Pool is adjusted annually to include the royalty stream from new restaurants, net of the sales of any A&W restaurants that have permanently closed. TMLP pays Food Services for the additional royalty stream in the form of an increase in the limited partnership interest of Food Services. Food Services' limited partnership interest may be exchanged for additional preferred and non-voting common shares of Trade Marks which are exchangeable for units of the Fund.

Food Services currently owns 41.5% of the common shares of Trade Marks, and therefore currently owns the equivalent of 41.5% of the units of the Fund on a fully-diluted basis.

Trade Marks' dividends to Food Services and the Fund, and the Fund's distributions to unitholders are based on top-line revenues of the A&W restaurants in the Royalty Pool, less interest, general and administrative expenses and current income taxes of Trade Marks, and are thereby isolated from many of the factors that impact an operating business.

Certain statements in this report may be forward-looking in nature. These include references to liquidity, subordinated dividends, earnings and anticipated earnings from growth in same store sales and new restaurant openings. Actual results may differ materially from those expressed or implied in these forward-looking statements. The forward-looking statements are based on assumptions that management considered reasonable at the time they were prepared. These forward-looking statements are subject to a number of risk factors, including the ability of A&W Food Services of Canada Inc. to implement its marketing strategies, the opening of new A&W restaurants, general economic and business conditions, financial and political instability, and other factors disclosed previously and from time to time in the Fund's public filings.

Additional information relating to the Fund is on SEDAR at www.sedar.com and on the Fund's website at www.awincomefund.ca.

For further information: Don Leslie, Chief Financial Officer: [phone] or [email protected]