Brookfield Real Estate Services Fund Announces Fourth Quarter Results and Monthly Cash Distribution

Brookfield Real Estate Services Fund (the "Fund") (TSX:BRE.UN) today announced
that royalties for the quarter ended December 31, 2009, were $8.5 million, up
9.8% from the same period in 2008. Distributable cash1 during the quarter
increased to $5.9 million, up 10.6% from the fourth quarter of 2008 while
distributable cash per unit increased 15.0% or $0.06 per unit to $0.46 per unit
due in part to the a lower number of outstanding units resulting from the
success of the normal course issuer bid program, which was completed in July
2009. Net earnings increased to $1.5 million ($0.16 per unit) from $0.2 million
($0.02 per unit) in the fourth quarter of 2008.


The results for the quarter represented the second consecutive quarter of
year-over-year revenue increases following two quarters of declining revenues
experienced earlier in the year. The year-over-year increase in royalties and
corresponding increase in distributable cash in the fourth quarter reflected the
marked activity increase that occurred in the Canadian residential real estate
markets during that time period. Year-over-year net earnings were further
increased by a decrease in amortization expense and an unrealized gain recorded
on an interest rate swap, as this financial derivative is required to be valued
at market value under generally accepted accounting principles.


For fiscal 2009, revenues were $34.4 million, 1.5% lower than the prior year,
and distributable cash was $23.9 million, down 2.1% from fiscal 2008. Net
earnings of $5.6 million were 5.9% greater than 2008 as the decrease in
royalties was more than offset by the unrealized gain recorded on the interest
rate swap and income tax recovery.


Fixed fees, which are related primarily to the size of the Fund's REALTOR(R)
network, were stable throughout the year, while variable franchise fees for the
year decreased by 5.0% from the same period in 2008 as compared to the 13%
increase in Canadian market activity. The change in the Fund's variable
franchise fees did not follow the increase in the Canadian market due primarily
to the approximately 45 to 60 day lag between market activity which is reported
when a home is sold and the Fund's variable fees which are recorded when a home
sale closes. Due to this lag effect a significant portion of the Fund network's
participation in the 90% year-over-year increase in transactional dollar volume
in the fourth quarter of 2009 is expected to materialize as variable fees in the
first quarter of 2010. The change in variable fees is further mitigated by
agents that attained the royalty cap of $1,300 per annum as an increase in the
market does not increase fees earned from these agents once they have reached
the cap. In 2009, 17% of the Agents in the network reached the royalty cap.


A summary of our fourth quarter and year-end results




     A summary of our fourth quarter and year-end results


                                        Fourth Quarter
             ---------------------------------------------------------------
                        2009                        2008
             ---------------------------------------------------------------
                                 (per
                  (thousands)    unit)        (thousands)         (per unit)
             ---------------------------------------------------------------
Royalties        $     8,495   $ 0.66        $     7,740        $      0.58
Net
 earnings        $     1,511   $ 0.16        $       200        $      0.02
Distributable
 cash            $     5,873   $ 0.46        $     5,310        $      0.40
Distributions    $     4,969   $ 0.39        $     4,647        $      0.35
Payout (4)                85%                         87%


                                Year ended December 31
             ---------------------------------------------------------------
                          2009                            2008
             ---------------------------------------------------------------

                                 (per
                    (thousands)  unit)        (thousands)         (per unit)
             ---------------------------------------------------------------
Royalties        $      34,359 $ 2.65        $    34,883        $      2.62
Net
 earnings        $       5,579 $ 0.58        $     5,270        $      0.53
Distributable
 cash            $      23,926 $ 1.85        $    24,437        $      1.84
Distributions    $      18,633 $ 1.44        $    17,452        $      1.31
Payout (4)                  78%                       71%


(1) Defined as royalties less administrative expenses, interest expense
    and management fee. Distributable cash does not have a standardized
    meaning under Canadian generally accepted accounting principles.
    Management believes that distributable cash is a useful supplemental
    measure of performance as it provides investors with an indication
    of the amount of cash for distribution to unitholders. Investors
    are cautioned that distributable cash should not be construed as
    an alternative to using net earnings as a measure of profitability
    or the statement of cash flows.
(2) REALTOR(R) is a trademark identifying real estate licensees in
    Canada who are members of the Canadian Real Estate Association.
(3) The term MLS(R) stands for Multiple Listing Service and is a
    registered trademark of the CREA.
(4) Payout represents distributions as a percentage of distributable cash.



"Our brands weathered the market downturn well, and as a company we were
prepared to capitalize on the subsequent rebound," said Phil Soper, President
and Chief Executive. "The Fund's structure is weighted towards fees that are
fixed in nature, a structure that has proven effective in moderating the sharp
swings that occasionally occur in our industry. This feature, together with
initiatives we took to prepare our REALTORS(R) for declining housing markets,
resulted in very satisfactory performance during the first overall market
retraction in some 15 years, and excellent results during the strong rebound
that followed. As the year began, we correctly anticipated that first time
buyers would lead the rebound, and our marketing efforts helped our agent
network target this group early in the recovery, before demand spread to other
market sectors."


The Fund's network experienced Agent attrition for the first three quarters of
2009, but regained organic growth in the latest quarter with the addition of 64
REALTORS(R). With the acquisition of 21 franchise agreements with 417
REALTORS(R) effective January 1, 2010, the Fund network has increased by 138
REALTORS(R) since January 1, 2009."


Fund Growth

During the fourth quarter of 2009, the Fund experienced a net organic gain of 64
REALTORS(R), resulting in a net organic loss of 279 REALTORS(R) during the
fiscal year ended December 31, 2009. With the addition of 316 REALTORS(R) from
the 21 franchise agreements acquired by the Fund on January 1, 2009, the Fund
had a net increase of 37 REALTORS(R) since December 31, 2008. At December 31,
2009, the Fund Network was comprised of 349 independently owned and operated
franchises operating from 647 locations serviced by 14,631 REALTORS(R) with an
approximate 22% share of the Canadian residential real estate market based on
transactional dollar volume.


On January 1, 2010, the Fund acquired from the Fund Manager, Brookfield Real
Estate Services Limited ("the Manager"), 21 franchise agreements with 417
REALTORS(R)(1) under the Royal LePage and La Capitale brands. These acquisitions
increased the Fund's network to 15,048 Agents, which compares with 14,910 at
January 1, 2009.


Monthly Cash Distribution

The Brookfield Real Estate Services Fund today declared a cash distribution of
$0.117 per unit for the month of March 2010, payable April 30, 2010 to
unitholders of record on March 31, 2010.


Debt Refinancing

In February, the Fund completed the refinancing of its $53 million debt
obligations through a $32.7 million private placement with a number of Canadian
institutional investors, with interest fixed at 5.809%, and a $20.3 million bank
facility with interest available in the form of floating rate prime plus 1.50%,
or Banker's Acceptance rates plus 3% with terms up to six months. The financing
is provided under a five-year term, with interest payable quarterly in arrears.
There were no substantive changes to the covenants associated with the
refinanced debt facilities.


Outlook

"We expect Canada's residential real estate market to remain unusually strong
throughout the first half of 2010 as economic conditions across the country
improve and the stimulus impact of low interest rates continues to stoke demand.
A number of factors are expected to bring the market back into balance in the
second half of the year, when the rate at which home prices are appreciating is
expected to moderate considerably. These factors include the gradual erosion of
affordability driven by higher house prices and the expected modest upward
movement of interest rates, and an improvement in listings supply as more
Canadians feel confident in the economy and are prepared to list their homes and
move. The tighter standards for mortgage approvals and other similar measures to
be implemented this spring by the federal government will contribute to
moderating demand. We support these modest measures, designed to help protect
consumers from becoming overleveraged," said Soper.


The Canadian Real Estate Association (CREA) has forecast that MLS activity will
increase 13.3% to a record level in 2010 and that the national average home
price will increase 5.4%, with average price gains forecast in all provinces.
Over the second half of the year, CREA expects national activity will trend
downward as pent-up demand is reduced, interest rates begin rising, and the
harmonized sales tax comes into effect in Ontario and B.C. Looking to 2011, CREA
expects the average price to decline by 1.5%, with modest average price gains in
all provinces except B.C. and Ontario.


"Our business strategy is to continue to grow by expanding our REALTOR(R)
network through organic agent recruitment and through acquisitions, to improve
agent retention rates and by increasing REALTOR(R) productivity. We have a
multi-brand strategy to improve our reach into different market segments, which
has been very successful in Canada. With the Fund Manager's recent U.S.-based
acquisitions, the Fund will have an opportunity to consider expanding its scope
to include the large U.S. market and beyond," Mr. Soper added.


Fund Structure

The Fund generates both fixed and variable fee components. Variable fees are
primarily driven by the total transactional dollar volume from agent sales
commissions, while fixed franchise fees are based on the number of agents and
sales representatives in the network. Approximately 69% of the Fund's revenue is
based on fees that are fixed in nature, which provides revenue stability and
helps insulate the Fund from market fluctuations.


Q4 Conference Call

A conference call for investors, analysts and media to review the fourth quarter
and year-end results will be held on Wednesday, March 10, 2010, at 10:00 a.m.
(Eastern Time). To participate in the conference call, please dial

1-800-319-4610 toll-free approximately five minutes before the call. For those
unable to participate in the conference call, it will be available by webcast,
and a replay will also be posted online following the conference call at
www.brookfieldres.com under "News & Events".


About the Brookfield Real Estate Services Fund

The Fund is a leading provider of services to residential real estate
REALTORS(R). The Fund generates cash flow from franchise royalties and service
fees derived from a national network of real estate brokers and agents in Canada
operating under the Royal LePage, La Capitale Real Estate Network and Johnston &
Daniel brands. At January 1, 2010, the Fund Network was comprised of 15,048
agents. The Fund Network has an approximate 22% share of the Canadian
residential resale real estate market based on transactional dollar volume. The
Fund is a TSX-listed income trust that pays monthly distributions and trades
under the symbol "BRE.UN". The Fund's website address is www.brookfieldres.com


Forward-Looking Statements

This quarterly news release contains forward-looking information and other
"forward-looking statements". The words such as "should", "will", "continue",
"plan", "believe", "expect", "anticipate", "intend", "estimate" and other
expressions that are predictions of or indicate future events and trends and
that do not relate to historical matters identify forward-looking statements.
Reliance should not be placed on forward-looking statements because they involve
known and unknown risks, uncertainties and other factors, that may cause the
actual results, performance or achievements of the Fund to differ materially
from anticipated future results, performance or achievement expressed or implied
by such forward-looking statements. Factors that could cause actual results to
differ materially from those set forward in the forward-looking statements
include a change in general economic conditions, interest rates, consumer
confidence, the level of residential resale transactions, the average rate of
commissions charged, competition from other traditional real estate brokers or
from discount and/or Internet-based real estate alternatives, the availability
of acquisition opportunities and/or the closing of existing real estate offices,
other developments in the residential real estate brokerage industry or the Fund
that reduce the number of and/or royalty revenue from the Fund's REALTORS(R),
our ability to maintain brand equity through the use of trademarks, the
availability of equity and debt financing, a change in tax provisions, and other
risks detailed in the Fund's annual information form, which is filed with
securities commissions and posted on SEDAR at www.sedar.com. The Fund undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by law.




Brookfield Real Estate Services Fund
Consolidated Balance Sheets

As at December 31, 2009 and 2008
 (in thousands of dollars)                      2009              2008
----------------------------------------------------------------------

                                                              Restated
                                                           (See note 6)
Assets
Current assets
     Cash                                  $   6,842      $      7,924
     Accounts receivable                       3,267             3,224
     Prepaid expenses                              -               145
----------------------------------------------------------------------
                                              10,109            11,293

   Intangible assets (note 5)                114,840           127,980
----------------------------------------------------------------------
                                           $ 124,949      $    139,273
----------------------------------------------------------------------
----------------------------------------------------------------------

Liabilities and Unitholders' Equity
Current liabilities
     Accounts payable and accrued
      liabilities                          $   3,079 $           2,551
       Purchase obligation - current
        portion (note 4)                       2,219             3,031
     Distribution payable to unitholders       1,489             1,148
     Financial derivative (note 8)               101                 -
----------------------------------------------------------------------
                                               6,888             6,730

Long-term debt (note 8)                       52,953            51,615
Purchase obligation (note 4)                   1,924             3,180
Financial derivative (note 8)                      -               365
Future income tax liability (note 6)           2,079             2,526
Non-controlling interest (note 9)             17,061            19,701
----------------------------------------------------------------------
                                              80,905            84,117

   Unitholders' equity                        44,044            55,156
----------------------------------------------------------------------
                                           $ 124,949      $    139,273
----------------------------------------------------------------------
See accompanying notes to the consolidated financial statements



Brookfield Real Estate Services Fund
Consolidated Statements of Earnings and
Comprehensive Earnings

Years ended December 31 (in thousands of
 dollars, except unit and per unit amounts)      2009          2008
-------------------------------------------------------------------
Royalties
   Fixed franchise fees                    $   17,842  $     17,698
   Variable franchise fees                      7,875         8,291
   Premium franchise fees                       4,355         4,450
   Other revenue and services                   4,287         4,444
-------------------------------------------------------------------
                                               34,359        34,883
-------------------------------------------------------------------
-------------------------------------------------------------------

Expenses
   Administration                                 866           817
   Management fee (note 3)                      6,365         6,455
   Interest expense                             3,202         3,174
   Other (income) loss (note 8)                  (264)          365
   Amortization of intangible assets
    (note 5)                                   16,997        16,886
-------------------------------------------------------------------
                                               27,166        27,697
-------------------------------------------------------------------
-------------------------------------------------------------------

Earnings before income tax and non-
 controlling interest                           7,193         7,186
   Future income tax recovery (note 6)            551            48
-------------------------------------------------------------------

Earnings before non-controlling interest        7,744         7,234
   Non-controlling interest (note 9)           (2,165)       (1,964)
-------------------------------------------------------------------
-------------------------------------------------------------------
Net and comprehensive earnings             $    5,579  $      5,270
-------------------------------------------------------------------
Basic and diluted earnings per unit
 (9,594,500 weighted average units)
   (2008 - 9,974,391 units) (note 11)      $     0.58  $       0.53
-------------------------------------------------------------------
-------------------------------------------------------------------
See accompanying notes to the consolidated financial statements


Consolidated Statements of Unitholders' Equity
                       Con
               Unit- tribu-
(in         holders'   ted
 thousands   Contri-   Sur-        Net       Distri-
 of dollars) bution   plus    Earnings      butions      Deficit      Total
----------------------------------------------------------------------------
Balance,
 January
 1, 2008  $  92,938   $  -  $   21,224   $  (49,960)  $  (28,736) $  64,202
Changes
 during
 the
 year:
   Issuer
    repur-
    chases
   (note 10) (1,637)   404           -            -            -     (1,233)
  Net 
  earnings        -      -       5,270            -        5,270      5,270
  Unit
   distri-
   butions        -      -           -      (13,083)     (13,083)   (13,083)
----------------------------------------------------------------------------
Balance,
 December
 31, 2008 $  91,301 $  404   $  26,494   $  (63,043)  $  (36,549) $  55,156
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance,
 January
 1, 2009  $  91,301 $  404   $  26,494   $  (63,043)  $  (36,549) $  55,156
Changes
 during
 the
 year:
  Issuer
  repur-
  chases
  (note 10)  (3,354)   491           -            -            -     (2,863)
  Net 
  earnings        -      -       5,579            -        5,579      5,579
  Unit
   distri-
   butions        -      -           -      (13,828)     (13,828)   (13,828)
----------------------------------------------------------------------------
Balance,
 December
 31, 2009 $  87,947 $  895   $  32,073   $  (76,871) $   (44,798) $  44,044
----------------------------------------------------------------------------
----------------------------------------------------------------------------

There is no accumulated other comprehensive income or loss to the Fund.

See accompanying notes to the consolidated financial statements



Brookfield Real Estate Services Fund
Consolidated Statements of Cash Flows


Years ended December 31 (in thousands
 of dollars)                                  2009           2008
-----------------------------------------------------------------
Cash provided by (used for):
Operating activities
  Net earnings for the year           $      5,579  $       5,270
  Items not affecting cash
  Non-controlling interest                   2,165          1,964
  Future income tax                           (551)           (48)
  Non-cash interest expense (note 8)           344            283
  Change in value of derivative               (264)           365
  Amortization of intangible assets         16,997         16,886
-----------------------------------------------------------------
                                            24,270         24,720
Changes in non-cash working capital
 (note 13)                                   1,440           (546)
-----------------------------------------------------------------
                                            25,710         24,174
-----------------------------------------------------------------


Investing activities
  Purchase of intangible assets (note
   4)                                       (2,770)       (16,984)
  Payment of purchase price
   obligation (note 4)                      (3,051)        (2,295)
-----------------------------------------------------------------
                                            (5,821)       (19,279)
-----------------------------------------------------------------


Financing activities
  Repurchase of Fund units (note 10)        (3,805)          (291)
  Proceeds from Term Facility (note
   8)                                          994         13,715
  Distributions paid to unitholders        (13,487)       (12,933)
  Distributions paid to non-
   controlling interest                     (4,673)        (4,978)
-----------------------------------------------------------------
                                           (20,971)        (4,487)
-----------------------------------------------------------------

(Decrease) increase in cash during
 the year                                   (1,082)           408
Cash, beginning of year                      7,924          7,516
-----------------------------------------------------------------
Cash, end of year                     $      6,842  $       7,924
-----------------------------------------------------------------


Supplemental Cash Flow Information
  Interest paid                       $      2,858  $       2,942
-----------------------------------------------------------------

See accompanying notes to the consolidated financial statements



Brookfield Real Estate Services Fund

Notes to the Consolidated Financial Statements

December 31, 2009 and 2008 (in thousands of dollars)

1.  Organization

Brookfield Real Estate Services Fund (the "Fund") is a limited purpose trust
established under the laws of the Province of Ontario and pursuant to an Amended
and Restated Declaration of Trust. On August 7, 2003, the Fund raised $99,830
(before issue costs) by issuing units on the Toronto Stock Exchange. These
proceeds together with the proceeds of a term loan were utilized to acquire
franchise agreements, relationships and trademark rights.


2.  Significant Accounting Policies

BASIS OF PRESENTATION

These consolidated financial statements include the accounts of Brookfield Real
Estate Services Fund, its wholly owned subsidiary RL RES Holding Trust ("RLHT"),
and its 75% owned subsidiaries, Residential Income Fund General Partner Limited
("RIFGP"), Residential Income Fund L.P. (the "Partnership"), 9120 Real Estate
Network, L.P. ("LCLP"), a wholly owned subsidiary of the Partnership, and
9188-5517 Quebec Inc., the "General Partner of LCLP". RIFGP is the managing
general partner of the Partnership. Trilon Bancorp Inc. (the "non-controlling
interest") owns the remaining 25% interest in the Partnership and RIFGP. The
Fund receives certain management, administrative and support services from
Brookfield Real Estate Services Ltd. ("BRESL"), a party related to the
non-controlling interest via common control. Royal LePage Real Estate Services
Limited ("RES"), a wholly owned subsidiary of BRESL, pays royalties to the Fund
under a franchise agreement.


The consolidated financial statements have been prepared in accordance with
Canadian generally accepted accounting principles ("GAAP"). The Fund's
significant accounting policies are as follows:


ADOPTION OF NEW ACCOUNTING POLICIES

The following standards were adopted effective January 1, 2009:

a) Section 3064, Goodwill and intangible assets, replacing Section 3062,
Goodwill and other intangible assets and Section 3450, Research and development
costs. This Section, effective January 1, 2009, establishes standards for the
recognition, measurement, presentation and disclosure of goodwill and intangible
assets including intangible assets developed internally. The provisions of this
Section were adopted retrospectively. The adoption of this Section did not have
a significant impact on the consolidated financial statements of the Fund or on
the carrying value of the intangible assets.


b) Emerging Issues Committee ("EIC") EIC 173, Credit risk and the fair value of
financial assets and financial liabilities. This Abstract concludes that an
entity's own credit risk and the credit risk of the counterparty should be taken
into account when determining the fair value of financial assets and financial
liabilities including derivative instruments. This Abstract is to apply to all
financial assets and liabilities measured at fair value in interim and annual
financial statements for periods ending on or after January 20, 2009. The
adoption of this Abstract did not have a significant impact to the Fund's
consolidated financial statements.


c) Section 3862, Financial Instruments - Disclosures. In June 2009, the CICA
amended Section 3862 to improve fair value and liquidity risk disclosures.
Section 3862 now requires that all financial instruments measured at fair value
be categorized into one of three hierarchy levels, described below, for
disclosure purposes. Each level is based on the transparency of the inputs used
to measure the fair values of assets and liabilities:


-  Level 1 - inputs are unadjusted quoted prices of identical instruments in
active markets.


-  Level 2 - inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly or indirectly.


-  Level 3 - inputs used in a valuation technique are not based on observable
market data in determining fair values of the instruments.


Determination of fair value and the resulting hierarchy requires the use of
observable market data whenever available. The classification of a financial
instrument in the hierarchy is based upon the lowest level of input that is
significant to the measurement of fair value. The Fund has also enhanced the
liquidity disclosures by including the sources of funding. The additional
disclosures required as a result of the adoption of these standards are included
in Note 14 of the consolidated financial statements.


REVENUE RECOGNITION

Franchise fees are generally based on a percentage of an agent's gross revenue
("Variable Franchise Fees") to a specified maximum plus a dollar amount per
agent ("Fixed Franchise Fees"). Gross revenue is the gross commission income
(net of outside broker payments) paid in respect of the closings of residential
resale real estate transactions. Variable Franchise Fees are recognized as
income at the time a residential resale real estate transaction closes or lease
is signed by the vendor or lessor. Fixed Franchise Fees are recognized as income
as earned.


Premium franchise fees are calculated as a percentage ranging from 1% to 5% of
an agent's gross commission income for a select number of franchise locations.
These fees are recognized as income at the time a residential resale real estate
transaction closes or lease is signed by the vendor or lessor.


Other fee-based revenues are generally recognized as income when the related
services have been provided. Any prepayment for future service is recorded as
deferred revenue. Deferred revenue as at December 31, 2009 was

$111 (2008 - $140).

INTANGIBLE ASSETS

Intangible assets, consisting of franchise agreements, relationships and
trademark rights are recorded at cost less accumulated amortization. The
franchise agreements are being amortized over the term of the agreements using
the effective rate method.


Relationships are amortized over one renewal period, at the commencement of that
period, using the effective rate method. The trademarks are amortized on a
straight-line basis over the term of the agreement plus one renewal period, if
applicable. The Fund reviews the carrying value of the intangible assets for
impairment whenever events or circumstances indicate the carrying value exceed
the undiscounted cash flows expected from the life of the franchise agreements,
relationships and trademarks. If impairment is determined to exist, the
intangible assets are written down to their fair value.


EARNINGS PER UNIT

The earnings per unit are based on the weighted average number of units
outstanding during the year. Diluted earnings per unit are calculated to reflect
the dilutive effect, if any, of the non-controlling interest exercising its
right to exchange its Subordinated LP Units of the Partnership into units of the
Fund after August 7, 2008.


USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Significant areas
requiring the use of management estimates relate to the determination of the
carrying value of intangible assets, determination of the future tax balances,
useful lives for amortization of intangible assets and provisions for
contingencies. Actual results could differ from those estimates.


FINANCIAL INSTRUMENTS

All financial instruments are classified into one of the following five
categories: held-for-trading; held-to-maturity; loans and receivables;
available-for-sale or other financial liabilities. All financial instruments,
including derivatives, are measured at fair value, except for loans and
receivables, held-to-maturity instruments and other financial liabilities, which
are measured at amortized cost. Transaction costs for financial liabilities are
applied against these liabilities and amortized using the effective interest
method, the resulting amortization being recorded as financial expenses. Gains
and losses on held-for-trading financial instruments are included in net income
in the period in which they arise.


The Fund made the following classifications:



Cash or cash equivalents                   Held-for-trading
Accounts receivable                        Loans and receivables
Accounts payable and accrued liabilities   Other financial liabilities
Purchase obligation                        Other financial liabilities
Distributions payable to unitholders       Other financial liabilities
Long-term debt                             Other financial liabilities



The Fund utilizes a derivative financial instrument to manage its interest rate
risk. Derivative financial instruments are classified as held-for-trading and
are carried at estimated fair values. Gains or losses arising from changes in
fair value are recognized in the consolidated statement of earnings and are
classified as other income or loss in the period the change occurs.


The Fund did not have any financial instruments at December 31, 2009 that would
result in Other Comprehensive Earnings to the Fund.


FUTURE ACCOUNTING AND REPORTING CHANGES

The CICA has issued the following new accounting standards:

a) International Financial Reporting Standards. The Accounting Standards Board
of Canada ("AcSB") will converge Canadian GAAP for publicly accountable
enterprises with International Financial Reporting Standards ("IFRS") over

a transition period that will end effective January 1, 2011 with the adoption of
IFRS. The AcSB announced on February 13, 2008 that IFRS will be required in 2011
for publicly accountable profit-oriented enterprises. The changeover date is for
interim and annual financial statements relating to fiscal years beginning on or
after January 1, 2011. IFRS uses a conceptual framework similar to Canadian
GAAP, but there are significant differences in recognition, measurement and
disclosure requirements. As a result, the Fund has established a changeover plan
to convert to these new standards according to the timetable set with these new
rules. An implementation team has been created and third-party advisors have
been engaged to provide training to our staff. The Fund completed the scoping
and diagnostic phase and is now in the implementation and review phase. At this
time, other than additional disclosure and presentation requirements, management
has determined that the most significant changes to the financial statements as
a result of IFRS are the estimation and recognition of future purchase
obligations and the associated deferred income tax impact on the balance sheet
and statement of comprehensive earnings, which differs from our deposit
accounting for these acquisitions as described in note 4.


b) Section 1582 - Business Combinations, Section 1601 - Consolidated Financial
Statements, Section 1602 Non-controlling Interests. These Sections are based on
the IASB's International Financial Reporting Standard 3, "Business
Combinations". These new standards replace the existing guidance on business
combinations and consolidated financial statements. The objective of these new
standards is to harmonize Canadian accounting for business combinations with the
international and U.S. accounting standards. These new standards are to be
applied prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after January 1, 2011, with earlier application permitted. Assets and
liabilities that arose from business combinations whose acquisition dates
preceded the application of the new standards shall not be adjusted upon
application of these new standards. The Non-controlling Interests standard
should be applied retrospectively except for certain items. These amendments are
not expected to have significant impact on the Fund's accounting for business
combinations, consolidation of financial statements, and non-controlling
interests.


c) Section 3855, Financial Instruments - Recognition and Measurement. This
Section adds more guidance on the application of the effective interest rate
method to previously impaired financial assets and embedded prepayment options.
The amendments are effective for interim and annual financial statements
relating to fiscal years beginning on or after January 1, 2011 with early
adoption permitted. The amendments are not expected to have significant impact
on the Fund's accounting of its financial instruments.


3.  Management Services Agreement

On January 1, 2008, the Fund entered into an Amended and Restated Management
Services Agreement ("MSA") with BRESL, a party related to the non-controlling
interest via common control. This agreement replaced the original Management
Services Agreement which commenced August 7, 2003 with an initial term of 10
years and automatically renewable for successive 10-year periods subject to
approval of the Fund and BRESL. The termination date and renewal periods of the
MSA remain consistent with the original agreement. Under the MSA, BRESL is to
provide certain management, administrative and support services to the Fund and
its subsidiaries and in return is paid a monthly fee equal to 20% and 30% of the
distributable cash of the Partnership and LCLP, respectively. For the year ended
December 31, 2009, BRESL earned $6,365 for these services (2008 - $6,455). The
MSA also prescribes the conditions under which the Fund purchases contracts from
BRESL and the formula for calculating the purchase price.


4.  Asset Acquisitions

The Fund's purchase of franchise agreements are governed by terms set out in the
MSA. On January 1, 2009, the Partnership acquired 18 new Royal LePage franchise
agreements from BRESL at a purchase price of $2,264 and $24 of related legal and
other acquisition costs. On January 1, 2009, LCLP acquired three new La Capitale
franchise agreements from BRESL for an estimated purchase price of $1,050 and $2
of related costs. The estimated price is to be revised at the end of each of the
next two years based on the average annual royalty stream earned over the
three-year period from November 1, 2008 to October 31, 2011. The Partnership
used cash on hand to acquire these agreements.


On January 1, 2008, the Partnership acquired 16 new Royal LePage franchise
agreements from BRESL at a purchase price of $3,984 and $303 of related legal
and other acquisition costs.


On January 1, 2008, the Partnership acquired 100% of the partnership units of
LCLP, which holds franchise agreements operating under the La Capitale brand in
Quebec and associated trademarks, and 100% of the shares of the General Partner
of LCLP for an estimated purchase price of $18,907, including $151 of
acquisition costs, from Trilon Bancorp Inc., the parent company of BRESL. On
December 31, 2009, as a result of greater than anticipated royalties, the
estimated purchase price was increased to $19,320, including $186 of related
acquisition costs. The price is to be revised at the end of 2010 based on the
average annual royalty stream earned over the three-year period from November 1,
2007 to October 31, 2010.


The acquisitions during 2009 are summarized as follows:



                                                                       2008
                                      Adjustments to                  Total
                   Royal                  prior year        2009      Resta-
                  LePage      LCLP    purchase price       Total        ted
---------------------------------------------------------------------------
Franchise
 agreements     $  1,741 $     460    $          255  $    2,456  $  14,448
Relationships
 and trademarks      547       592               262       1,401     13,139
---------------------------------------------------------------------------

                   2,288     1,052               517       3,857     27,587
Future income
 tax liability         -         -              (104)       (104)    (4,393)
---------------------------------------------------------------------------

                $  2,288 $   1,052    $          413  $    3,753  $  23,194
---------------------------------------------------------------------------

The considerations paid, including transaction costs, are funded by
the following:

                                      Adjustments to
                   Royal                  prior year        2009       2008
                  LePage      LCLP    purchase price       Total      Total
---------------------------------------------------------------------------
Cash on hand    $  2,047 $     723    $            -  $    2,770  $   4,018
Proceeds of
 term facility         -         -                 -           -     12,965
Purchase
 obligations,
 current             241       210               286         637      3,031
Purchase
 obligations,
 long-term             -       219               127         346      3,180
---------------------------------------------------------------------------
                $  2,288 $   1,052    $          413  $    3,753  $  23,194
---------------------------------------------------------------------------


The purchase obligations consist of the following:

                              Royal                         2009       2008
                             LePage             LCLP       Total      Total
---------------------------------------------------------------------------
Purchase
 obligations,
 current                 $     241 $           1,978  $    2,219  $   3,031
Purchase
 obligations,
 long-term                       - $           1,924       1,924      3,180
---------------------------------------------------------------------------
                         $     241 $           3,902  $    4,143  $   6,211
---------------------------------------------------------------------------



5.   Intangible Assets

A summary of intangible assets is provided in the chart below.


                                       December 31, 2009
--------------------------------------------------------------------------
                                          Accumulated
                                Cost     Amortization       Net Book Value
--------------------------------------------------------------------------
Franchise agreements     $   150,297 $         91,844 $             58,453
Relationships and
 trademarks                   59,368            2,981               56,387
--------------------------------------------------------------------------
                         $   209,665 $         94,825 $            114,840
--------------------------------------------------------------------------


                                      December 31, 2008
------------------------------------------------------------------
                                Cost   Accumulated        Net Book
                            Restated  Amortization  Value Restated
------------------------------------------------------------------
Franchise
 agreements             $    147,841 $       76,279  $      71,562
Relationships
 and
 trademarks                   57,967          1,549         56,418
------------------------------------------------------------------
                        $    205,808 $       77,828  $     127,980
------------------------------------------------------------------


The additions to intangible assets during the years ended
December 31, 2009 and 2008 are summarized as follows:

                                         Year ended              Year ended
                Royal                       Dec. 31,          Dec. 31, 2008
               LePage           LCLP           2009                Restated
---------------------------------------------------------------------------
Franchise
 agreements   $ 1,741   $        715 $        2,456 $                14,448
Relationships
 and
 trademarks       547            854          1,401                  13,139
---------------------------------------------------------------------------
              $ 2,288   $      1,569 $        3,857 $                27,587
---------------------------------------------------------------------------



Amortization for the year ended December 31, 2009 was $16,997 (2008 - $16,886).

6.  Future Income Taxes

During the audit of the 2009 financial statements, the Fund identified an error
with respect to its 2008 future income tax liability balance. During 2008, the
Fund acquired certain intangible assets on a tax deferred basis and an error of
$1,333 was made in calculating the corresponding future tax liability and the
related cost of the intangible assets purchased. This error has been corrected
and the 2008 balance sheet has been restated to reflect an increase in the
future income tax liability balance from $1,193 to $2,526 and an increase in the
carrying value of the intangible assets from $126,647 to $127,980. This error
did not impact net earnings and comprehensive earnings, earnings per share or
cash flows as previously presented.


On October 31, 2006, the Minister of Finance announced proposed tax legislation
("SIFT rules") that will change the income tax rules applicable to publicly
traded trusts rendering income trusts taxable in 2011. The SIFT rules were
substantively enacted on June 12, 2007, at which time the Fund gave accounting
recognition to these new tax rules. Prior to June 12, 2007, income tax
obligations relating to distributions from the Fund were obligations of the
unitholders and, accordingly, no provisions for income taxes were recorded by

the Fund.

While the Fund is not expected to be liable for current income taxes until
January 1, 2011, the enactment of the SIFT rules lead to the Fund recognizing
future income taxes in respect of temporary tax expected to reverse after
December 31, 2010. These temporary differences arise from differences between
the tax basis and the carrying amount of the Fund's intangible assets. These
differences arose primarily due to the Fund's acquisition of certain intangible
assets on a tax-deferred basis (meaning that the tax basis of the assets was
lower than cost recorded for accounting), but are also affected by relative
amounts of amortization deducted for tax and accounting purposes each year.


A reconciliation of income taxes at Canadian statutory rates with reported
income taxes is as follows:




For the year ended December 31                          2009           2008
----------------------------------------------------------------------------
Expected income tax expense at a statutory
 tax rate of 33% (2008 - 33.5%)                 $      2,374   $      2,407
Effect of current year's income allocated to
 non-controlling interest                               (714)          (658)
Effect of current year's income being
 distributed to unitholders                           (1,660)        (1,749)
Future income tax recovery due to tax rate
 reductions and rescheduling of
 temporary differences                                  (551)           (48)
----------------------------------------------------------------------------
Future income tax recovery                      $       (551)   $       (48)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Future income tax liability due to purchase
 price adjustment                               $        104   $          -
----------------------------------------------------------------------------
Change to future income tax liability           $       (447)   $       (48)
----------------------------------------------------------------------------
----------------------------------------------------------------------------



The tax effect of the estimated temporary differences as at December 31, 2010
that give rise to the net future tax liability is as follows:




                                                                       2008
                                                        2009       Restated
----------------------------------------------------------------------------
Future tax liability
 Intangible assets                              $      2,079   $      2,526
----------------------------------------------------------------------------
Net future tax liability                        $      2,079   $      2,526
----------------------------------------------------------------------------
----------------------------------------------------------------------------



7. Operating Credit facility

On February 16, 2005, the Partnership obtained a credit facility (the
"revolver") of up to $2,000 from a Canadian financial institution. This revolver
may be used to provide working capital to the Partnership from time to time. The
revolver is subject to annual renewal with outstanding principal under the
revolver subject to interest at the lender's prime rate plus 1% to 1.5% or the
Bankers' Acceptance rate plus 2% to 2.5%, based on the ratio of total debt to
Adjusted EBITDA of the Partnership as defined in the credit agreement. As at
December 31, 2009, the operating credit facility had not been drawn upon.


The operating credit facility expired February 17, 2010. Subsequent to year-end,
the Fund renewed its operating credit facility for a five year term. (See Note
16)


8. Long-Term Debt

A summary of the Fund's long-term debt is comprised of the following debt
facilities, both of which mature on February 17, 2010:




As at December 31                                       2009           2008
----------------------------------------------------------------------------
Private debt placement                          $     37,975   $     37,791
Term Facility                                         14,978         13,824
----------------------------------------------------------------------------
                                                $     52,953   $     51,615
----------------------------------------------------------------------------
----------------------------------------------------------------------------



A) PRIVATE PLACEMENT

On February 18, 2005, the Partnership completed the issuance of a $38,000
private debt placement, net of $822 in issue costs (the "private placement")
provided by Canadian institutional investors. The private placement is for a
five-year term with interest fixed at 5.882%, with only interest only payable
quarterly in arrears.


The private placement had a fair value of $37,950 at December 31, 2009 (2008 -
$37,406).


During the year ended December 31, 2009, $184 of amortization of the issue costs
was recorded as interest expense (2008 - $173).


B) TERM FACILITY

On April 4, 2008, in connection with the LCLP acquisition, the Partnership
completed a $15,000 Term Facility with a single Canadian financial institution
from which the Fund drew down $14,000 on closing. Interest on the Term Facility
is available in the form of a floating prime rate payable quarterly, or a
Bankers' Acceptance rate plus 1% with terms of up to six months. The Fund paid
$285 in issue costs for the Term Facility.


On April 7, 2008, the Partnership entered into an interest rate swap agreement,
which fixed the variable portion of the Term Facility's interest at 3.29%, which
when added to the 1% stamp fee, results in an annual interest rate of 4.29%,
excluding legal and associated costs, over the term of the facility. The Term
Facility and interest rate swap mature on February 17, 2010.


On April 2, 2009 the Fund drew down the remaining $1,000 of the Term Facility at
the floating prime rate.


During the year ended December 31, 2009, $160 of amortization of issue costs was
recorded as interest expense (2008 - $110).


The interest rate swap is a financial derivative valued separately from the Term
Facility. The Fund values the swap agreement at its market value, which as at
December 31, 2009 was in an unrealized loss position of $101. Changes in the
value of the swap agreement are recorded as other income or loss. During the
year ended December 31, 2009, $264 was recorded as other income (2008 - ($365)).


The Term Facility had a fair value of $15,000 on December 31, 2009.

Subsequent to year-end, the Fund refinanced its long-term debt for a five-year
term (see Note 16).


9. Non-Controlling Interest

The non-controlling interest owns 25 common shares in RIFGP and 3,327,667 Class
B limited partnership units of the Partnership, which reflects an effective 25%
interest in the partnership. An equivalent amount of Special Fund Units, which
represent voting rights in the Fund, also accompanied the Class B LP Units. The
Fund indirectly holds the remaining 75% interest in the Partnership through
Class A limited partnership units of the Partnership ("Ordinary LP Units").


Prior to August 7, 2008 ("Conversion Date"), distributions to holders of the
Class B limited partnership units ("Class B LP Units") were subordinated to the
distributions to the holders of Class A limited partnership units ("Class A LP
Units"). The non-controlling interest is entitled to indirectly exchange, on a
one-for-one basis, subject to adjustment, the Class B LP Units for Units of the
Fund on or after conversion date. After August 7, 2008, there are no longer any
restrictions to the non-controlling interest in disposing of its Class B units.


Effective August 7, 2008, the subordination period ended and distributions were
paid to the holders of Class B LP Units on the same monthly schedule as
distributions paid to holders of Class A LP Units.


As at December 31, 2009, the non-controlling interest had not elected to
exchange the Class B LP Units for Fund Units.


A summary of the non-controlling interest is as follows:



                                                        2009           2008
----------------------------------------------------------------------------
Non-controlling interest, beginning of year     $     19,701   $     22,106
Share of earnings for the year                         2,165          1,964
Distributions during the year                         (4,805)        (4,369)
----------------------------------------------------------------------------
Non-controlling interest, end of year           $     17,061   $     19,701
----------------------------------------------------------------------------
----------------------------------------------------------------------------



10. Fund Units

The Fund is authorized to issue an unlimited number of units, each of which
represents an equal undivided beneficial interest in any distributions from the
Fund. All units are of the same class with equal rights and privileges.


Pursuant to the Amended and Restated Declaration of Trust, the holder of the
Special Fund Units, which accompanied the Class B LP Units (see Note 9), will be
entitled to vote in all votes of Fund unitholders, as if they were holders of
the number of units of the Fund they would receive if Class B LP Units were
exchanged into units of the Fund as of the record date of such votes, and will
be treated in all respects as unitholders of the Fund for the purpose of any
such votes. The Special Fund Units are not entitled to receive distributions.


Units are redeemable at the option of the holder at a price based on the market
value as defined in the Declaration of Trust, subject to a maximum of $50,000 in
cash redemptions by the Fund in any one month. The limitation may be waived at
the discretion of the Trustees of the Fund.


On October 3, 2008, the Toronto Stock Exchange ("TSX") approved the Fund's
notice of intention to make a normal course issuer bid ("NCIB") for up to
499,150 of its units, representing 5% of its 9,983,000 outstanding units as of
September 30, 2008. The Fund may purchase units at prevailing market prices
during the period from October 7, 2008 to October 6, 2009. Purchases are made at
market prices in accordance with the rules and policies of the TSX. Daily
purchases are effected through the facilities of the TSX and limited to 3,800
units, other than block purchase exceptions.


The Fund believes that the purchase by the Fund of a portion of its outstanding
units may from time to time be an appropriate use of available resources and in
the best interests of the Fund and its unitholders.


The Fund finances these purchases with a special distribution from the
Partnership. Units purchased are cancelled at the end of each month.


During the year ended December 31, 2009, the Fund purchased and cancelled
335,430 units at a total cost of $2,863. The repurchased units had an issued
value of $3,354, resulting in a contributed surplus of $491. On January 8, 2009,
the Fund paid the $942 NCIB settlement payable at December 31, 2008. A summary
of the unitholders' contribution activity for the year ended December 31, 2009
with the comparative 2008 information is presented in the table below.




Fund Units                          2009                      2008
----------------------------------------------------------------------------
                             Units       Amount        Units         Amount
----------------------------------------------------------------------------
Beginning of year        9,819,280   $   91,301    9,983,000     $   92,938
NCIB purchases            (335,430)      (3,354)    (163,720)        (1,637)
----------------------------------------------------------------------------
End of year              9,483,850   $   87,947    9,819,280     $   91,301
----------------------------------------------------------------------------
----------------------------------------------------------------------------



11. Earnings Per Unit

The Special Fund Units referred to in Notes 9 and 10 were not included in the
diluted per unit calculations as the effect would have been anti-dilutive.


12. Related Party Transactions

Unless disclosed elsewhere, the Fund had the following transactions with parties
related to the non-controlling interest during the years ended December 31, 2009
and 2008. These transactions have been recorded at the exchange amount agreed to
between the parties.




                                                            2009       2008
----------------------------------------------------------------------------
a)  Royalties
    Fixed, variable and other franchise fees           $   2,351  $   2,359
    Premium franchise fees                             $   3,700  $   3,943

b)  Expenses
    Management fees                                    $   6,365  $   6,455
    Insurance and other                                $     109  $     102
    Interest on purchase obligation                    $       -  $     210

c)  Distributions
    Distributions paid to non-controlling interest     $   4,673  $   4,978
----------------------------------------------------------------------------



The following amounts due to/from related parties are included in the account
balance as described:




                                                             2009       2008
----------------------------------------------------------------------------
d)  Accounts receivable
    Franchise fees receivable and other                 $     585  $     394

e)  Accounts payable and accrued liabilities
    Distributions payable to non-controlling interest   $     521  $     389
    Management fees                                     $   1,656  $     417
    NCIB settlement payable                             $       -  $     942

f)  Purchase obligation payable                         $   4,143  $   6,211
----------------------------------------------------------------------------



13. Supplemental Cash Flow Information



                                                             2009      2008
----------------------------------------------------------------------------
Changes in non-cash working capital
Accounts receivable                                     $     (43) $   (472)
Prepaid expenses                                        $     145  $    (61)
Accounts payable and accrued liabilities                $   1,338  $    (13)
----------------------------------------------------------------------------
                                                        $   1,440  $   (546)
----------------------------------------------------------------------------
----------------------------------------------------------------------------



14. Financial Instruments

In the normal course of business the Fund is exposed to a number of financial
risks that can affect its operating performance. These risks are outlined below:


A) CREDIT RISK

Credit risk arises from the possibility that the franchisees may experience
financial difficulty and be unable to pay outstanding franchise fees. The Fund's
credit risk is limited to the recorded amount of accounts receivable. Management
reviews the financial position of all franchisees during the application process
and closely monitors outstanding accounts receivable on an ongoing basis.


B) LIQUIDITY RISK

The Fund is exposed to liquidity risk in its ability to finance its working
capital requirements and meet its cash flow needs, including paying ongoing
future distributions to unitholders. Subsequent to year-end, the Fund refinanced
its debt (see Note 16). Management reduces liquidity risk by maintaining more
conservative debt covenant ratios compared with those required by the covenants
associated with the long-term debt. Also, the Fund has $2,000 unutilized credit
under the Operating Credit Facility described in Note 7.


Estimated maturities of the Fund's financial liabilities taking into account the
refinancing of its debt are as follows:




                                                           Beyond
                                  2010     2011    2012      2012     Total
----------------------------------------------------------------------------
Accounts payable and accrued
 liabilities                   $ 3,079  $     -  $    -  $      -  $  3,079
Purchase obligations             2,219    1,815     109         -     4,143
Distributions payable to
 unitholders                     1,489        -       -         -     1,489
Private debt placement               -        -       -    32,700    32,700
Term facility                        -        -       -    20,300    20,300
----------------------------------------------------------------------------
Total                          $ 6,787  $ 1,815  $  109  $ 53,000  $ 61,711
----------------------------------------------------------------------------
----------------------------------------------------------------------------



C) INTEREST RATE RISK

The Fund has chosen to mitigate the interest rate associated with the Term
Facility by entering into an interest rate swap agreement to effectively fix the
interest rate associated with the Term Facility.


D) FAIR VALUE

The fair value of the Fund's financial instruments, which consist of cash,
accounts receivable, deposits on acquisitions, accounts payable and accrued
liabilities, purchase obligation and distributions payable to unitholders are
estimated by management to approximate their carrying values due to their
short-term nature. Similarly, the Fund's floating rate debt has a fair value
that approximates its face values. The Fund determines the fair value of the
fixed rate debt through the use of a discounted cash flow analysis using
relevant risk-free bond rates plus an applicable risk premium. The fair values
of the Fund's long-term debt and derivative liability are disclosed in Note 8.


E) FAIR VALUE HIERARCHY

The following table summarizes the financial instruments measured at fair value
in the consolidated balance sheet as at December 31, 2009, classified using the
fair value hierarchy described in Note 2:




                                   Level 1    Level 2    Level 3      Total
----------------------------------------------------------------------------

Financial asset or liability
Cash                             $   6,842     $    -     $    -  $   6,842
Financial derivative                     -       (101)         -       (101)
----------------------------------------------------------------------------
Total                            $   6,842     $ (101)    $    -  $   6,741
----------------------------------------------------------------------------
----------------------------------------------------------------------------



The Fund's derivative transactions are accounted for on a fair value basis and
are comprised of non-speculative interest rate swaps to manage interest rate
exposures. This derivative is valued using industry standard valuation models,
whereby certain market-based observable inputs, including interest-rate-yield
curves, volatility of certain prices or rates and credit spreads are assumed.
The Fund currently does not use unobservable inputs that are significant to the
fair value measurement in its entirety.


The Fund's valuation techniques used include credit risk spreads upon adoption
of EIC 173, Credit risk and the fair value of financial assets and liabilities.
The adoption of this Abstract did not have a significant impact to the fair
values established.


15. Management of Capital

The Fund's capital is comprised of its cash on hand, long-term debt,
unitholders' equity and non-controlling interest.


The Fund's objectives when managing capital are to maintain a capital structure
that provides financing options to the Fund while remaining compliant with the
covenants associated with the long-term debt, maintain financial flexibility to
preserve its ability to meet financial obligations, including debt servicing and
distributions to unitholders; and deploy capital to provide an appropriate
investment return to its unitholders.


The Fund's financial strategy is designed to maintain a flexible capital
structure consistent with the objectives stated above and to respond to changes
in economic conditions.


The covenants of the long-term debt prescribe that the Fund must maintain a
ratio of Adjusted Earnings Before Income Taxes, Depreciation and Amortization
("Adjusted EBITDA") to Senior Interest Expense at a minimum of 5.00 to 1 and a
ratio of Senior Indebtedness to Adjusted EBITDA at a maximum 2.25 to 1. The Fund
is compliant with all financial covenants.


There were no changes in the Fund's approach to capital management during the year.

16. Subsequent Events

ACQUISITIONS

Royal LePage franchise agreements

On January 1, 2010, the Partnership acquired 18 new Royal LePage franchise
agreements from BRESL. The estimated purchase price of $4,205 is based on an
estimated annual royalty stream of $681. A deposit of $3,364, equal to 80% of
the estimated purchase price, was paid from cash on hand on January 4, 2010 and
the remainder is to be paid a year later, when the final purchase price is
determined in accordance with the terms set out in the MSA.


La Capitale franchise agreements

On January 1, 2010, LCLP acquired three new La Capitale franchise agreements
from BRESL. The estimated purchase price of $1,040 is based on an estimated
annual royalty stream of $198. A deposit of $832, equal to 80% of the estimated
purchase price, was paid from cash on hand on January 4, 2010. The estimated
price is to be revised over a three-year period from November 1, 2009 to October
31, 2012 based on the average annual royalty stream earned.


REFINANCING OF LONG-TERM DEBT

On February 18, 2010, the Partnership completed the refinancing of its long-term
debt described in note 8 for $53,000, maturing on February 17, 2015. The
refinancing is comprised of a $32,700 private debt placement with a number of
Canadian institutional investors with fixed interest of 5.809% and a $20,300
term facility with interest available in the form of a floating rate at prime
plus 1.5% payable quarterly, or at Banker's Acceptance rates plus 3% with terms
of up to six months.


There were no substantive changes to the covenants associated with the
refinanced debt facilities.


RENEWAL OF OPERATING CREDIT FACILITY

On February 18, 2010, the Partnership renewed the credit facility for a five
year term. There were no substantive changes to the covenants associated with
the renewed operating credit facility.




Supplemental Information - Selected Financial and Operating Information

Three months ended                 March 31,   June 30, Sept. 30,   Dec. 31,
($000's, unaudited)                    2008       2008      2008       2008
----------------------------------------------------------------------------

Revenue
  Fixed franchise fees            $   4,336 $    4,440 $   4,431 $    4,491
  Variable franchise fees             1,921      2,628     2,499      1,243
  Premium franchise fees                893      1,106     1,514        937
  Other fee revenue and
   services                             942      1,230     1,203      1,069
----------------------------------------------------------------------------
                                  $   8,092 $    9,404 $   9,647 $    7,740
----------------------------------------------------------------------------
----------------------------------------------------------------------------

% Revenue by region
  British Columbia                       14         13        11         11
  Prairies                               10         10         9         10
  Ontario                                55         54        59         53
  Quebec                                 18         20        18         22
  Maritimes                               3          3         3          4
----------------------------------------------------------------------------
                                        100        100       100        100
----------------------------------------------------------------------------

Three months ended                 March 31,   June 30, Sept. 30,   Dec. 31,
Changes during the period              2008       2008      2008       2008
----------------------------------------------------------------------------

Number of REALTORS(R)                 1,418        181        (5)      (172)
Number of Agents                      1,350        164        17       (132)
Number of fixed fee paying
  Sales Representatives                  (7)        12       (11)       (30)
Number of locations                      55         (2)        0         (1)
Number of franchise
 agreements                              54         (1)        0          0

At end of period
----------------------------------------------------------------------------

Number of REALTORS(R)                14,590     14,771    14,766     14,594
Number of Agents                     13,551     13,715    13,732     13,600
Number of fixed fee paying
  Sales Representatives                 728        740       729        699
Number of locations                     646        644       644        643
Number of franchise
 agreements                             339        338       338        338
---------------------------------------------------------------------------
----------------------------------------------------------------------------



Supplemental Information - Selected Financial and Operating Information

Three months ended                 March 31,   June 30, Sept. 30,   Dec. 31,
($000's, unaudited)                    2009       2009      2009       2009
----------------------------------------------------------------------------

Revenue
  Fixed franchise fees          $     4,467 $    4,445 $   4,459 $    4,471
  Variable franchise fees             1,194      2,312     2,738      1,631
  Premium franchise fees                420        920     1,674      1,341
  Other fee revenue and
   services                             916      1,162     1,157      1,052
----------------------------------------------------------------------------
                                $     6,997 $    8,839  $ 10,028 $    8,495
----------------------------------------------------------------------------
----------------------------------------------------------------------------

% Revenue by region
  British Columbia                       13         12        12         12
  Prairies                               10          9         9          9
  Ontario                                53         54        56         56
  Quebec                                 21         22        20         20
  Maritimes                               3          3         3          3
----------------------------------------------------------------------------
                                        100        100       100        100
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Three months ended                 March 31,   June 30, Sept. 30,   Dec. 31,
Changes during the period              2009       2009      2009       2009
----------------------------------------------------------------------------

Number of REALTORS(R)                    98        (74)      (51)        64
Number of Agents                         96        (81)      (46)        51
Number of fixed fee paying
  Sales Representatives                   0         (2)        2          8
Number of locations                      17         (5)       (3)        (2)
Number of franchise
 agreements                              15         (3)        1         (2)

At end of period
----------------------------------------------------------------------------

Number of REALTORS(R)                14,692     14,618    14,567     14,631
Number of Agents                     13,696     13,615    13,569     13,620
Number of fixed fee paying
  Sales Representatives                 699        697       699        707
Number of locations                     660        655       652        647
Number of franchise
 agreements                             353        350       351        349
----------------------------------------------------------------------------
----------------------------------------------------------------------------