Microbrewery in the new SUB

Project Costs Brewery Development Project in new Student Union Building Type of expenditureCostSource of Funding $ Structural **Architectural 100,000To be decided **Structural 55,800To be decided **Mechanical 81,000To be decided **Plumbing 81,000To be decided **Electrical 81,000To be decided Brewery Equipment * 318,178To be decided *Required Sustainability options 10,000To be decided *Optional Sustainability options 67,500To be decided **Brewery Equipment Escalation 47,727To be decided Installation costs **Architectural Fees 31,392To be decided **Srtuctural Engineering Fees 6,696To be decided **Mechanical Engineering Fees 9,720To be decided **Electrical Engineering Fees 9,720To be decided First Key Design Fees 37,000AMS Cost centre **Permit Fees 8,720To be decided **Contingency for Cost Over runs 53,727To be decided Start up Costs *Pre opening Consulting 97,016To be decided *Licence application/registration fees 4,040To be decided **HST 41,809To be decided Total Pre Opening Project Costs 1,142,045 Assumptions: 1Line items marked with * are derived from Consultants report 2Line items marked ** are based on estimates by AMS Design office

Summary To be decided 1,105,045Already budgetted for 37,000

Operating Model Scenario 1 Source : First Key report Scenario 1 : Status Quo (no Brewpub) Totals Sales Volume Total Hectoliters ,886 Net Revenue 389, , , , ,886 1,951,883 Total Cost of Sales 185, , , , , ,719 CGS% 47.7% Gross Profit 203, , , , ,632 1,021,164 Operating Costs Total Operating Costs ,884 Earnings Before Interest and Taxes 203, , , , ,967 1,017,280 Interest & Depreciation Net Income before Taxes $203,097$221,905$221,039$198,272$172,967 $1,017,280 Assumptions: 1No new Brew pub or Microbrewery 2Administration costs of current operation are zero

Operating Model Scenario 2 Source : First Key report Scenario 2 : With Brewpub Totals Sales Volume Total Hectoliters ,605 Net Revenue 629, , , , ,731 3,209,119 Total Cost of Sales 249, , , , ,391 1,275,185 CGS% 39.6%37.9%38.1%40.6%43.3%39.7% Gross Profit 379, , , , ,340 1,933,934 Operating Costs Total Operating Costs 63,594 64,865 66,163 67,486 68, ,944 Earnings Before Interest and Taxes 316, , , , ,504 1,602,990 Interest & Depreciation Net Income before Taxes 286, , , , ,227 1,476,340 Loan Repayment 40, ,000 Net Return on Project $246,935$300,987$300,591$243,600$184,227 $1,276,340 Assumptions: 1Current operations with addition of brewpub/microbrewery 2Increase of 90%+ per annum in Draft Sales 3Administration costs of current plus new operation is zero 4Equipment purchases, including installation are $405,279 5loan to finance project is $200,000, assume 5 year term, interest at Prime +2%

Operating Model Scenario 3 Source : AMS Finance Scenario 3 : With Brewpub, but with revised assumptionsn (50% increase in Draft Sales) Totals Sales Volume Total Hectoliters ,850 Net Revenue 500, , , , ,594 2,552,164 Total Cost of Sales 245, , , , ,544 1,258,779 CGS% 49.2%47.2%47.4%50.2%53.5% 49.3% Gross Profit 254, , , , ,050 1,293,385 Total Operating Costs 88,594 89,865 91,163 92,486 93, ,944 Earnings Before Interest and Taxes 165, , , , , ,441 Net Income before Taxes 19,646 60,461 62,259 24, , ,981 Loan Repayment 110, ,522 Net Return on Project -$90,859-$50,043-$48,246-$85,652-$126,742 -$401,541 Assumptions: 1Current operations with addition of brewpub/microbrewery 2Increase of 50%+ per annum in Draft Sales 3Administration costs of current plus new operation is $25,000 per annum 4Equipment purchases, including installation are $ 509,653 5loan to finance project is $ 1,105,04510 year term, 6Loan financing is available

Scenario 4 Source : AMS Finance Scenario 4 : With Brewpub, but with revised assumptions (50% increase in Draft Sales) Totals Sales Volume Total Hectoliters ,850 Net Revenue 500, , , , ,594 2,552,164 Total Cost of Sales 245, , , , ,544 1,258,779 CGS% 49.2%47.2%47.4%50.2%53.5% 49.3% Gross Profit 254, , , , ,050 1,293,385 Total Operating Costs 88,594 89,865 91,163 92,486 93, ,944 Earnings Before Interest and Taxes 165, , , , , ,441 Net Income before Taxes 63, ,243 97,620 55,794 10, ,788 Assumptions: 1Current operations with addition of brewpub/microbrewery 2Increase of 50%+ per annum in Draft Sales 3Administration costs of current plus new operation is $25,000 per annum 4Equipment purchases, including installation are $ 509,653 5no loan financing, all monies from AMS Funds as directed by Council 6Loan financing is available

Scenario 5 Source : AMS Finance Scenario 5 : With Brewpub, but with revised assumptions (25% increase in Draft Sales) Totals Sales Volume Total Hectoliters ,374 Net Revenue 420, , , , ,681 2,139,383 Total Cost of Sales 243, , , , ,646 1,247,841 CGS% 57.9%55.8%56.1%59.6%63.4% 58.3% Gross Profit 176, , , , , ,541 Total Operating Costs 88,594 89,865 91,163 92,486 93, ,944 Earnings Before Interest and Taxes 88, , ,409 77,436 42, ,597 Net Income before Taxes - 13,532 13,224 10, , , ,055 Assumptions: 1Current operations with addition of brewpub/microbrewery 2Increase of 25%+ per annum in Draft Sales 3Administration costs of current plus new operation is $25,000 per annum 4Equipment purchases, including installation are $ 509,653 5no loan financing, all monies from AMS Funds as directed by Council 6Loan financing is available

Scenario 6 Source : AMS Finance Scenario 5 : With Brewpub, but with revised assumptions (75% increase in Draft Sales) Totals Sales Volume Total Hectoliters ,309 Net Revenue 579, , , , ,700 2,951,393 Total Cost of Sales 248, , , , ,442 1,269,716 CGS% 42.8%41.0%41.2%43.8%47.3% 43.0% Gross Profit 331, , , , ,258 1,681,677 Total Operating Costs 88,594 89,865 91,163 92,486 93, ,944 Earnings Before Interest and Taxes 243, , , , ,422 1,225,733 Net Income before Taxes 141, , , ,337 70, ,080 Assumptions: 1Current operations with addition of brewpub/microbrewery 2Increase of 75%+ per annum in Draft Sales 3Administration costs of current plus new operation is $25,000 per annum 4Equipment purchases, including installation are $ 509,653 5no loan financing, all monies from AMS Funds as directed by Council 6Loan financing is available

Questions?