SIR ROYALTY INCOME FUND REPORTS THIRD QUARTER RESULTS

BURLINGTON, ON, Nov. 11 /CNW/ - SIR Royalty Income Fund (TSX: SRV.UN) ("the Fund") today reported its financial results for the three and nine-months ended September 30, 2010.  All comparisons are to the third quarter in the prior fiscal year.

Third quarter highlights:

• Net earnings for the Fund increased 1.4% to $1.9 million, or $0.35 per unit;
• Pooled revenue increased 2.9% to $50.0 million from $48.5 million, the result of same store sales growth (SSSG¹);
• Distributable cash² per unit (basic and diluted) was $0.35; and,
• The payout ratio² decreased 1.4% from 100.9% of distributable cash² to 99.5%.

Subsequent to quarter end:

• SIR Corp. ("SIR") opened a new Jack Astor's® in Boisbriand, Quebec on October 25, 2010.

"We're pleased to report same store sales¹ growth at all of our concept and signature brands," said Peter Fowler, Chief Executive Officer of SIR Corp. "Net earnings also increased in the quarter compared to the prior year. During the Fund's third quarter, SIR renovated two Jack Astor's restaurants in Ontario (in Brampton and on Wellington Road South in London) and subsequent to the quarter, we renovated the Alice Fazooli's restaurant in Richmond Hill, Ontario. In addition, SIR opened a new Jack Astor's restaurant in Boisbriand, Quebec. Looking forward, we are encouraged by these results against the backdrop of our year-to-date numbers. SIR continues to carefully monitor the current economic environment and has advised the Fund that it is considering new store growth and renovations subject to raising acceptable long-term financing. Additional sites will be considered when appropriate."

Financial Results

Financial Highlights
(in thousands of dollars except restaurants and per Unit amounts) (unaudited)		3-month period ended Sept 30, 2010				3-month period ended Sept 30, 2009				9-month period ended Sept 30, 2010				9-month period ended Sept 30, 2009
Royalty Pooled Restaurants		45				45				45				45
Pooled Revenue generated by SIR		49,970				48,539				148,574				143,658
6% of Pooled Revenue		2,998				2,912				8,914				8,619
Partnership other income		7				6				19				22
Partnership expenses		(32)				(31)				(82)				(104)
Partnership earnings		2,973				2,887				8,851				8,537
SIR's interest (Class A, B and C GP Units)		(1,780)				(1,682)				(5,301)				(5,012)
Partnership income allocated to Fund		1,193				1,205				3,550				3,525
Interest income		750				750				2,250				2,250
Total income of the Fund		1,943				1,955				5,800				5,775
General & administrative expenses		(85)				(123)				(296)				(347)
Net earnings for the period		1,858				1,832				5,504				5,428
Earnings per Fund unit (basic and fully diluted)		$0.35				$0.34				$1.03				$1.01

The Fund's net earnings for the quarter totaled $1.9 million, or $0.35 per Fund Unit (basic and diluted), compared to $1.8 million, or $0.34 per Fund Unit (basic and diluted), for the third quarter of last year.

Revenue for the Royalty Pooled Restaurants for the quarter increased 2.9% to $50.0 million compared to $48.5 million for the same period in 2009. The increase was the result of growth in SSS¹.  There were no new restaurants opened during the comparable periods.

Distributable cash² for the quarter totaled $1.9 million, or $0.35 per Fund unit (basic and diluted), and declared distributions to unitholders totaled $1.8 million, representing a payout ratio² of 99.5% for the quarter. For Q3, 2009, distributable cash² totaled $1.8 million, or $0.34 per Fund unit (basic and diluted), and declared distributions totaled $1.8 million, representing a payout ratio² of 100.9%.

The following table provides disclosure regarding the relationship between cash provided by operating activities and distributable cash:

Distributable Cash^(2)
(in thousands of dollars except per Unit amounts and payout ratio^(2)) (unaudited)			3-month period ended Sept. 30, 2010		3-month period ended Sept. 30, 2009		9-month period ended Sept. 30, 2010		9-month period ended Sept. 30, 2009
Cash provided by operating activities			1,848		1,848		5,544		5,544
Add/(deduct): Net change in non-cash working capital items			10		(16)		(40)		(116)
Distributable cash^(2)			1,858		1,832		5,504		5,428
Cash distributed for the period			1,848		1,848		5,544		5,544
Surplus/(shortfall) of distributable cash^(2)			10		(16)		(40)		(116)
Payout ratio^(2)			99.5%		100.9%		100.7%		102.1%
Distributable cash^(2) per Fund Unit (basic and fully diluted)			$0.35		$0.34		$1.03		$1.01

Same Store Sales

For the three-month period ended September 30, 2010, SIR reported to the Fund SSSG¹ of 2.9% for the Royalty Pooled Restaurants. During 2010, the Canadian Restaurant and Foodservices Association is projecting a modest increase in sales.

SSSG^(1) for the Royalty Pooled Restaurants								3-month period ended Sept 30, 2010								9-month period ended Sept 30, 2010
Jack Astor's®								2.2%						3.7%
Canyon Creek®								1.8%								0.4%
Alice Fazooli's®								1.2%								3.3%
Signature Restaurants								16.9%								6.8%
Overall SSSG^(1)								2.9%								3.4%

Existing Trust Structure

As a result of legislative changes to the tax treatment of income trusts, commonly referred to as a Specified Investment Flow Through tax (SIFT), the Fund's Trustees are reviewing alternative structures for the Fund. As discussed in the Fund's second quarter disclosure, it currently does not have plans to convert to a corporation.

Special Meeting

On December 20, 2010, the Fund intends to hold a special meeting of the Fund Unitholders to approve certain amendments to its Declaration of Trust and to the Partnership Agreement.  These proposed amendments are necessary as a result of the change in accounting policy upon adopting IFRS and the new SIFT tax rules, which are both effective for the Fund commencing January 1, 2011.  The proposed amendment to the Declaration of Trust is to enable the Fund to meet the requirements of a puttable instrument and therefore have the Fund Units classified as equity in its consolidated financial statements under IFRS (from the date of approval).  The Fund's Trustees believe that treatment of the Fund Units as equity better reflects the risk of the Fund Units.  The proposed amendments to the Partnership Agreement would address the impact of new SIFT tax rules in the formula for calculating the number of Class A GP Units that SIR would be entitled to as a result of adding new restaurants to the Royalty pool.  The proposed amendments to the Partnership Agreement will also clarify the calculation of distributions on the Class A GP Units and the Fund Units.  These amendments to the Partnership Agreement are designed to maintain a similar position among the various unit holders of the Partnership post the implementation of the SIFT taxes as with the current arrangements.  The Management Information Circular is expected to be mailed on November 24, 2010.

The Fund's 2010 third quarter unaudited consolidated Financial Statements and Management's Discussion & Analysis ("MD&A") and the SIR Royalty Limited Partnership's Financial Statements, for the three-month and nine-month periods ended September 30, 2010 will be filed on SEDAR today and will be available via the SEDAR web site at www.sedar.com tomorrow. The Fund's 2010 third quarter consolidated Financial Statements and MD&A are also available via SIR's website at www.sircorp.com.

(1) Same store sales ("SSS") and same store sales growth ("SSSG") exclude revenue from restaurants which are not included in Royalty Pooled Restaurants, and exclude revenue from restaurants opened or closed during the current or prior fiscal year and therefore not open for the full period in both years. SSSG is the percentage increase in SSS over the prior comparable period. SSS and SSSG are non-GAAP measures that do not have standardized meanings prescribed by GAAP. However, SIR believes that SSS and SSSG are useful measures and provide investors with an indication of the change in year-over-year sales. SIR's method of calculating SSS and SSSG may differ from those of other issuers and, accordingly, SSS and SSSG may not be comparable to measures used by other issuers.

(2) Distributable cash and payout ratio are non-GAAP financial measures and do not have a standardized meaning prescribed by GAAP.  However, the Fund believes that distributable cash and the payout ratio are useful measures as they provide investors with an indication of cash available for distribution.  The Fund's method of calculating distributable cash and the payout ratio may differ from that of other issuers and, accordingly, distributable cash and the payout ratio may not be comparable to measures used by other issuers. Investors are cautioned that distributable cash and the payout ratio should not be construed as an alternative to the statement of cash flows as a measure of liquidity and cash flows of the Fund.  The payout ratio is calculated as cash distributed for the period as a percentage of the distributable cash for the period. For a detailed explanation of how the Fund's distributable cash is calculated, please refer to the Fund's MD&A for the three-month and nine-month periods ended September 30, 2010, which can be accessed via the SEDAR web site (www.sedar.com).

About SIR Corp.

SIR is a privately held Canadian corporation that owns and operates a portfolio of 46 restaurants in Canada. SIR's concept brands include: Jack Astor's Bar and Grill®, with 30 locations; Alice Fazooli's®, with five locations; and Canyon Creek Chop House®, with eight locations. SIR also operates one-of-a-kind "signature" brands in downtown Toronto, which comprise the upscale reds®, Far Niente®/FOUR^TM/Petit Four^TM, and the Loose Moose Tap & Grill®. All trademarks related to the concept and signature brands noted above are used by SIR under a license agreement with SIR Royalty Limited Partnership in consideration for a Royalty, payable by SIR to the Partnership, equal to six percent of the revenue of the 45 Royalty Pooled Restaurants. For more information on SIR Corp. or the SIR Royalty Income Fund, please visit www.sircorp.com.

About SIR Royalty Income Fund  

The Fund is a trust governed by the laws of the province of Ontario that receives distribution income from its investment in the SIR Royalty Limited Partnership and interest income from the SIR Loan. The Fund intends to pay distributions to unitholders on a monthly basis.

Caution concerning forward-looking statements

Statements in this release, including the information set forth as to the future financial or operating performance of the Fund or SIR, that are not current or historical factual statements may constitute "forward-looking" information within the meaning of securities laws.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund, the Trust, the Partnership, SIR, the SIR Restaurants, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  When used in this document, such statements may include, among other language, such words as "may", "will", "expect", "believe", "plan", "anticipate", "intend", "estimate" and other similar terminology.  These statements reflect Management's current expectations, estimates and projections regarding future events and operating performance and speak only as of the date of this document.  Readers should not place undue importance on forward-looking statements and should not rely upon this information as of any other date.  These forward-looking statements involve a number of risks and uncertainties.  The following are some of the factors that could cause actual results to differ materially from those expressed in or underlying such forward-looking statements: competition; changes in demographic trends; changing consumer preferences and discretionary spending patterns; changes in consumer confidence; changes in national and local business and economic conditions; changes in availability of credit; legal proceedings and challenges to intellectual property rights; dependence of the Fund on the financial condition of SIR; legislation and governmental regulation; accounting policies and practices specifically, as they relate to the anticipated changes under IFRS; and the results of operations and financial condition of SIR. The foregoing list of factors is not exhaustive.  Many of these issues can affect the Fund's or SIR's actual results and could cause their actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Fund or SIR.  Readers are cautioned that forward-looking statements are not guarantees of future performance, and should not place undue reliance on them.  The Fund and SIR expressly disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations, estimates and projections with regard thereto or any changes in events, conditions or circumstances on which any statement is based, except as expressly required by law. 

In formulating the forward-looking statements contained herein, Management has assumed that business conditions affecting SIR's restaurants and the Fund will continue substantially in the ordinary course, including without limitation with respect to general industry conditions, general levels of economic activity (including in downtown Toronto), regulations (including those regarding employees, food safety, tobacco and alcohol), weather, taxes, foreign exchange rates and interest rates, that there will be no pandemics or other material outbreaks of disease or safety issues affecting humans or animals or food products, and that there will be no unplanned material changes in its facilities, equipment, customer and employee relations, or credit arrangements. These assumptions, although considered reasonable by Management at the time of preparation, may prove to be incorrect.  For more information concerning the Fund's risks and uncertainties, please refer to the March 31, 2010 Annual Information Form which is available under the Fund's profile at www.sedar.com.

%SEDAR: 00020914E

For further information: