Tim Hortons Inc. Announces 2009 First Quarter Results


Positive same-store sales growth results in 7.8% operating income
increase to $104.9 million

(All amounts in Canadian dollars)

Financial & Sales Highlights
----------------------------

-------------------------------------------------------------------------
First Quarter Ended Q1 2009 Q1 2008 % Change
-------------------------------------------------------------------------
Revenues $ 507.2 $ 460.3 10.2%
Operating Income(1) $ 104.9 $ 97.3 7.8%
Effective Tax Rate(1) 33.3% 32.8%
Net Income attributable to THI $ 66.4 $ 61.8 7.5%
Diluted Earnings Per Share (EPS)
attributable to THI $ 0.37 $ 0.33 10.1%
Fully Diluted Shares 181.3 185.8 (2.4)%
-------------------------------------------------------------------------
($ in millions, except EPS. Fully diluted shares in millions. All numbers
rounded.)

(1) Operating Income and Effective Tax Rate incorporate adoption of SFAS
160 - Noncontrolling Interests in Consolidated Financial Statements.

-------------------------------------------------------------------------
Same-Store Sales(2) Q1 2009 Q1 2008
-------------------------------------------------------------------------
Canada 3.4% 3.5%
U.S. 3.2% 1.0%
-------------------------------------------------------------------------
(2) Includes sales at Franchised and Company-owned locations. As of
March 29, 2009, 99.4% of the Company's restaurants in Canada and
96.4% of its U.S. restaurants were franchised.

Highlights
----------
- First quarter systemwide sales(3) increased 6.6% on a constant
currency basis
- 28 new locations opened in first quarter, 20 in Canada and 8 in the
U.S.
- Board declares quarterly dividend of $0.10 per share
- Board approves reorganization as a Canadian public company subject to
shareholder approval and satisfaction of additional conditions; share
repurchase program deferred in a related decision



OAKVILLE, ON, May 7 // PRNewswire-FirstCall // - Tim Hortons Inc. (NYSE: THI, TSX: THI) today announced its results for the first quarter ended March 29, 2009.

"Sales growth in both our Canadian and U.S. markets was quite strong in the first quarter considering the challenging economic circumstances that continued to persist. Sales accelerated through the quarter after a slow start in January, supported by active menu and marketing programs and previous pricing in the system. We also continued to execute our growth agenda, opening new restaurants in targeted U.S. markets and throughout Canada," said Don Schroeder, president and CEO.

Consolidated Results

First quarter systemwide sales(3) grew 6.6% on a constant currency basis. Total revenues were $507.2 million in the first quarter, up 10.2% compared to $460.3 million in the same period of 2008. Systemwide sales growth drove higher rents, royalties and distribution revenues. Total revenues also benefited from a positive impact of approximately 1.8% from foreign exchange translation. These factors were partially offset by lower revenues from Company-operated and FIN 46R restaurants.

Sales, consisting primarily of warehouse sales, increased 10.8% in the first quarter compared to last year. Higher sales reflect new products managed through the supply chain including expansion in the grocery store channel, higher prices on coffee and other commodities, as a result of higher underlying costs, and systemwide sales growth. Significant changes in foreign exchange rates also contributed to the growth. Rents and royalties rose 8.3% in the first quarter, consistent with systemwide sales growth. Franchise fees increased 13.9% year-over-year, due to higher revenue from restaurant resales and replacements, a higher number of renovations and foreign exchange.

Same-store sales increased 3.4% in Canada and 3.2% in the U.S., and progressively strengthened during the quarter. Same-store sales were driven by active menu and marketing initiatives that included combo product offerings focused on both the breakfast and snacking day parts, as well as our popular annual Roll Up the Rim to Win(R) contest. This year's contest included prizes such as Toyota Venzas(R), $10,000 cash, Toshiba(R) Laptops, TimCards(R) and millions of food prizes. Previous pricing in the system also contributed to same-store sales growth, as did the timing of Easter compared to last year. In the second quarter, the benefit of previous pricing in the system is expected to be less than 1% and the timing benefit of the shift in Easter will reverse.

During the quarter, we continued to offer combo programs in Canada and the U.S. Several combo initiatives focused on the breakfast day part, including breakfast sandwiches with hash browns. In the U.S., combo programs also included a sausage and a biscuit at an attractive price point. Cherry Chocolate Bloom donuts, Trail Mix cookies and Whole Grain Blueberry muffins were promoted during the quarter. In the snacking day part, we bundled coffee and tea with muffin or cookie combinations at an attractive price point. In March, we introduced Wrap Snackers with BBQ and Ranch flavors in both Canada and the U.S., subsequently supported by a buy-one get-one free promotion in Canada and a free sample promotion in the U.S.

Foreign exchange negatively impacted individual cost structure line items by more than 2% on average in the first quarter, more than offsetting the positive impact of foreign exchange on revenues.

Cost of sales in the first quarter were up 10.2%. Costs associated with new products managed through the supply chain, product mix and cost changes, including increases in underlying commodity costs, and a higher number of system restaurants open contributed to higher warehouse costs, as did higher average same-store sales and foreign exchange. Operating expenses grew 14.2% in the first quarter. The largest components of the operating expense increase were the higher number of locations and related rent and property expenses. Higher depreciation, project and related support costs also contributed to the increase, as did foreign exchange. Franchise fee costs rose 8.2%, attributable to higher costs from resales and replacements, a higher number of renovations and replacements, and foreign exchange changes. Lower support costs and expenses partially offset these higher costs.

General and administrative costs increased 8.4% compared to the same period last year. The increase incorporates higher professional fees, foreign currency impacts and a timing shift of certain items. Approximately $1.4 million in costs were incurred to support the Company's ongoing initiative to undertake a feasibility assessment relating to the Company's corporate structure (see Corporate Developments for further information).

Equity income increased by 6.7% during the quarter to $7.9 million compared to $7.4 million last year. Equity income was reduced in the first quarter of 2008 as our bakery joint venture had a product supply issue and began commissioning a new pastry line.

Operating income for the first quarter was $104.9 million, an increase of 7.8% from $97.3 million in the same period last year. Operating income benefited from higher revenue growth and improvement of the U.S. segment including benefits associated with the restaurant closures and related asset impairment charge which occurred in late 2008.

Net interest expense was $4.9 million in the first quarter compared to $4.4 million last year. The increase is the result of lower interest income and higher interest expense on additional capital leases offset partially by lower interest costs on external debt.

First quarter net income attributable to Tim Hortons was $66.4 million, increasing 7.5% from $61.8 million last year. Net income growth was offset in part by a higher effective tax rate, which was 33.3% compared to 32.8% in the same period last year.

Diluted earnings per share attributable to Tim Hortons (EPS) were $0.37, up 10.1% compared to $0.33 in the first quarter of 2008. There were 2.4% fewer shares outstanding in the quarter due to the Company's share repurchase program.

Segmented Performance Commentary

Canada
------

Canadian same-store sales in the first quarter increased by 3.4%, of which approximately 2.8% was due to previous pricing in the system. The timing of Easter compared to last year contributed approximately 0.4% to same-store sales growth and will reverse in the second quarter. Sales improved in February and March after experiencing more moderate growth in January due primarily to poor weather. Strong menu promotional programs, including combo programs, contributed to the sales performance in a challenging economic climate, supported by advertising that included the Roll Up the Rim to Win(R) campaign.

Operating income in the Canadian segment was $115.4 million, increasing 8.3% compared to $106.5 million in the first quarter of 2008. A total of 20 restaurants were opened in Canada during the quarter.

United States
-------------

The U.S. segment had strong sales performance with a 3.2% increase in same-store sales, reversing declines the past two quarters. Sales in the U.S. business also progressively strengthened during the quarter. Previous pricing in the system contributed approximately 3.2% to the same-store sales increase, which also benefited by approximately 0.7% from the timing of Easter compared to the same quarter last year, an impact that will reverse in the second quarter. Innovation relating to menu promotional activities, including product combo offerings and bundles with attractive price points, helped drive sales this quarter. By the end of the first quarter, 15 co-branded Tim Hortons - Cold Stone Creamery(R) locations had been opened, including one co-branded Cold Stone Creamery site, experiencing positive consumer trial and sales contributions.

The U.S. segment had an operating loss of $0.6 million in the first quarter, a significant improvement compared to a loss of $2.9 million in the same quarter last year. Approximately $1.4 million of the earnings improvement was related to benefits from the impairment and restaurant closure charge taken in the fourth quarter of 2008. Currency translation raised both U.S. segment revenues and costs by approximately 19% during the quarter compared to the same period in 2008. A total of 8 locations were opened in the U.S. during the quarter.

Internationally, in the Republic of Ireland and the U.K., there are now 299 licensed locations primarily in the convenience store channel under the Tim Hortons brand.

Corporate Developments

Corporate Structure
-------------------

As previously disclosed, the Company commenced a review in the fourth quarter of 2008, with the support of external advisors, to assess various opportunities related to our corporate structure, including potentially converting our parent company from a U.S. to a Canadian corporation. This review is now substantially complete, and Management and the Board have determined that it would be in the best interests of the Company and our shareholders for our U.S. parent corporation to reorganize as a Canadian public company. The timing and completion of the contemplated reorganization is subject to shareholder approval, and also remains subject to the satisfaction of additional transaction conditions, including conditions relating to certain Canadian tax considerations. Although the Company is taking steps to proceed with this potential transaction and resolve the outstanding conditions, there can be no assurance that we will be able to satisfy these conditions within our anticipated timeframes, or at all, for that matter. Additional information about the proposed reorganization will be provided as we proceed.

In addition to significant operational and administrative benefits, it is anticipated that the reorganization, if approved, would create long-term value by bringing our effective tax rates closer to lower Canadian statutory rates. The potential change in jurisdiction of incorporation does not in any way affect the Company's commitment to growing our business in the U.S. or our underlying operations, as previously outlined. We would expect to incur certain charges for discrete items, the majority of which would be non-cash tax charges, and transactional costs in the year of implementation. If the transaction is implemented in 2009, the impact of the charges and transactional costs would result in our 2009 targeted tax rate exceeding the identified range of 32% to 34% and, potentially, could cause our targeted operating income to fall below the targeted range.

The Company intends to maintain dual listings on both the New York Stock Exchange and Toronto Stock Exchange following the proposed reorganization.

$200 million Share Repurchase Program
-------------------------------------

During the quarter, the Company spent $16.7 million to purchase approximately 0.6 million shares as part of our share repurchase program. As announced earlier this year, the Company contemplated deferring future share repurchases as part of its 2009 program in the event a decision was made to proceed with a change in the Company's corporate structure. As a result of the Board's decision to approve a transaction to reorganize as a public Canadian company, subject to shareholder approval and additional conditions, the Company has decided to defer further purchases in this year's share repurchase program. Given the decision to defer the program, we do not expect to complete the full authorized amount of the share repurchase program. Following implementation of a new structure, if approved by shareholders and other conditions are satisfied, the Company plans to re-evaluate its share purchase program in the context of its overall capital allocation activities.

Board declares dividend payment of $0.10 per share
--------------------------------------------------

The Board of Directors has declared a quarterly dividend of $0.10 per share payable on June 16th, 2009 to shareholders of record as of June 2nd, 2009. The Company's current dividend policy is to pay a total of 20%-25% of prior year, normalized annual net earnings in dividends each year, returning value to shareholders based on the Company's earnings growth.

Dividends are paid in Canadian dollars to all shareholders with Canadian resident addresses whose shares are registered with Computershare (the Company's transfer agent). For all other shareholders, including all shareholders who hold their shares indirectly (i.e., through their broker) and regardless of country of residence, the dividend will be converted to U.S. dollars on June 9th, 2009 at the daily noon rate established by the Bank of Canada and paid in U.S. dollars on June 16th, 2009.

Tim Hortons to host conference call at 1:30 p.m. (EDST) today, May 7th,
2009

Tim Hortons will host a conference call to discuss its first quarter results beginning at 1:30 p.m. Eastern Daylight Savings Time (EDST) on Thursday, May 7th, 2009. Investors and the public may listen to the conference call by calling (416) 641-6712 or 1 (800) 354-6885 (no access code required), or through simultaneous webcast by visiting the investor relations website at www.timhortons-invest.com, and clicking on the "Events and Presentations" tab. A slide presentation will be available to coincide with the conference call on this site. A replay of the call will be available for one week and can be accessed by calling (416) 626-4100 or 1 (800) 558-5253. The reservation number for the replay of the call is 21412008. The call will also be archived on our website for one year.

Annual Meeting of Stockholders

Tim Hortons will host its annual meeting of stockholders on May 8th, 2009 at the School of Hospitality Management, Ted Rogers School of Business, Ryerson University, 7th Floor Auditorium, 55 Dundas Street West, Toronto, Ontario starting at 10:30 a.m. The annual meeting will be simulcast, including presentation material, and will be accessible by visiting the "Events and Presentations" tab at www.timhortons-invest.com. An archive of the simulcast will also be available at this site for a period of one year.

Safe Harbor Statement

Certain information in this news release, particularly information regarding future economic performance, finances, and plans, expectations and objectives of management, is forward-looking as contemplated under the Private Securities Litigation Reform Act of 1995. Various factors including those described as "risk factors" in the Company's 2008 Annual Report on Form 10-K, filed February 26, 2009, and those risk factors set forth in our Safe Harbor Statement, as well as other possible factors not listed or described in the foregoing, could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. As such, readers are cautioned not to place undue reliance on forward-looking statements contained in this news release, which speak only as of the date hereof. Except as required by federal or provincial securities laws, the Company undertakes no obligation to publicly release any revisions to the forward looking statements contained in this release, or to update them to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events, even if new information, future events or other circumstances have made the forward-looking statements incorrect or misleading. Please review the Company's Safe Harbor Statement at timhortons.com/en/about/safeharbor.html.


(3) Total systemwide sales growth includes restaurant level sales at both
Company and Franchise restaurants. Approximately 99% of our
consolidated system is franchised as at March 29th, 2009. Systemwide
sales growth is determined using a constant exchange rate, where
noted, to exclude the effects of foreign currency translation. U.S.
dollar sales are converted to Canadian dollar amounts using the
average exchange rate of the base year for the period covered. For
the first quarter of 2009, systemwide sales growth was up 6.6%
compared to the first quarter of 2008. Systemwide sales are important
to understanding our business performance as they impact our
franchise royalties and rental income, as well as our distribution
income. Changes in systemwide sales are driven by changes in average
same-store sales and changes in the number of systemwide restaurants.



Tim Hortons Inc. Overview

Tim Hortons is the fourth largest publicly-traded quick service restaurant chain in North America based on market capitalization, and the largest in Canada. Tim Hortons appeals to a broad range of consumer tastes, with a menu that includes coffee and donuts, premium coffees, flavored cappuccinos, specialty teas, home-style soups, fresh sandwiches and fresh baked goods. As of March 29, 2009, Tim Hortons had 3,457 systemwide restaurants, including 2,930 in Canada and 527 in the United States. More information about the Company is available at www.timhortons.com.


TIM HORTONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of Canadian dollars, except share and per share data)

(Unaudited)

First quarter ended
March 29, March 30,
2009 2008 $ Change % Change
----------- ----------- ----------- -----------
REVENUES
Sales $ 339,619 $ 306,506 $ 33,113 10.8%
Franchise revenues:
Rents and royalties 147,139 135,880 11,259 8.3%
Franchise fees 20,427 17,931 2,496 13.9%
----------- ----------- ----------- -----------
167,566 153,811 13,755 8.9%
----------- ----------- ----------- -----------
TOTAL REVENUES 507,185 460,317 46,868 10.2%
----------- ----------- ----------- -----------

COSTS AND EXPENSES
Cost of sales 299,951 272,283 27,668 10.2%
Operating expenses 57,106 50,009 7,097 14.2%
Franchise fee costs 19,778 18,280 1,498 8.2%
General and administrative
expenses 33,476 30,886 2,590 8.4%
Equity (income) (7,855) (7,362) (493) 6.7%
Other (income), net (164) (1,111) 947 N/M
----------- ----------- ----------- -----------
TOTAL COSTS AND
EXPENSES, NET 402,292 362,985 39,307 10.8%
----------- ----------- ----------- -----------

OPERATING INCOME 104,893 97,332 7,561 7.8%

Interest (expense) (5,457) (6,351) 894 (14.1%)
Interest income 554 1,990 (1,436) N/M
----------- ----------- ----------- -----------

INCOME BEFORE INCOME TAXES 99,990 92,971 7,019 7.5%

INCOME TAXES 33,261 30,489 2,772 9.1%
----------- ----------- ----------- -----------

Net Income 66,729 62,482 4,247 6.8%
Net income attributable to
noncontrolling interests 290 662 (372) (56.2%)
----------- ----------- ----------- -----------
NET INCOME ATTRIBUTABLE TO
TIM HORTONS INC. $ 66,439 $ 61,820 $ 4,619 7.5%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Basic earnings per share of
common stock attributable
to Tim Hortons Inc. $ 0.37 $ 0.33 $ 0.03 10.1%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Diluted earnings per share
of common stock attributable
to Tim Hortons Inc. $ 0.37 $ 0.33 $ 0.03 10.1%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average number of
shares of common stock -
Basic (in thousands) 181,072 185,515 (4,443) (2.4%)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average number of
shares of common stock -
Diluted (in thousands) 181,301 185,811 (4,510) (2.4%)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Dividend per share of
common stock $ 0.10 $ 0.09 $ 0.01
----------- ----------- -----------
----------- ----------- -----------
N/M - not meaningful
(all numbers rounded)



TIM HORTONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands of Canadian dollars)

As at
---------------------------
March 29, December 28,
2009 2008
------------- -------------
(Unaudited)
ASSETS

Current assets
Cash and cash equivalents $ 56,694 $ 101,636
Restricted cash and cash equivalents 34,286 62,329
Accounts receivable, net 153,658 159,505
Notes receivable, net 24,437 22,615
Deferred income taxes 17,548 19,760
Inventories and other, net 79,271 71,505
Advertising fund restricted assets 26,108 27,684
------------- -------------
Total current assets 392,002 465,034

Property and equipment, net 1,347,245 1,332,852

Notes receivable, net 16,775 17,645

Deferred income taxes 31,764 29,285

Intangible assets, net 2,471 2,606

Equity investments 129,771 132,364

Other assets 11,525 12,841
------------- -------------
Total assets $ 1,931,553 $ 1,992,627
------------- -------------
------------- -------------



TIM HORTONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands of Canadian dollars)

As at
---------------------------
March 29, December 28,
2009 2008
------------- -------------
(Unaudited)

LIABILITIES AND EQUITY

Current liabilities
Accounts payable $ 111,803 $ 157,210
Accrued liabilities:
Salaries and wages 6,905 18,492
Taxes 17,128 25,605
Other 75,415 110,518
Advertising fund restricted liabilities 46,293 47,544
Current portion of long-term obligations 6,753 6,691
------------- -------------
Total current liabilities 264,297 366,060
------------- -------------

Long-term obligations
Term debt 331,678 332,506
Advertising fund restricted debt 5,304 6,929
Capital leases 59,858 59,052
Deferred income taxes 14,197 13,604
Other long-term liabilities 73,753 72,467
------------- -------------
Total long-term obligations 484,790 484,558
------------- -------------

Equity
Equity of Tim Hortons Inc.
Common stock, (US$0.001 par value per share)
Authorized: 1,000,000,000 shares
Issued: 193,302,977 shares 289 289
Capital in excess of par value 930,336 929,102
Treasury stock, at cost: 12,313,899 and
11,754,201 shares, respectively (416,020) (399,314)
Common stock held in trust, at cost:
358,186 and 358,186 shares, respectively (12,287) (12,287)
Retained earnings 725,835 677,550
Accumulated other comprehensive loss (47,117) (54,936)
------------- -------------
Total equity of Tim Hortons Inc. 1,181,036 1,140,404
Noncontrolling interests 1,430 1,605
------------- -------------
Total equity 1,182,466 1,142,009
------------- -------------
Total liabilities and equity $ 1,931,553 $ 1,992,627
------------- -------------
------------- -------------



TIM HORTONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Canadian dollars)

First Quarter Ended
---------------------------
March 29, March 30,
2009 2008
------------- -------------
(Unaudited)
CASH FLOWS PROVIDED FROM (USED IN)
OPERATING ACTIVITIES
Net income $ 66,729 $ 62,482
Net income attributable to noncontrolling
interests (290) (662)
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 24,791 21,866
Stock-based compensation expense 1,481 1,650
Equity income, net of cash dividends 2,633 3,122
Deferred income taxes 799 (1,840)
Changes in operating assets and liabilities
Restricted cash and cash equivalents 28,166 19,897
Accounts and notes receivable 6,266 826
Inventories and other (6,556) 1,340
Accounts payable and accrued liabilities (99,405) (95,867)
Other, net 1,170 5,659
------------- -------------
Net cash provided from operating activities 25,784 18,473
------------- -------------

CASH FLOWS (USED IN) PROVIDED FROM
INVESTING ACTIVITIES
Capital expenditures (35,721) (32,511)
Principal payments on notes receivable 585 689
Other investing activities (1,286) (127)
------------- -------------
Net cash used in investing activities (36,422) (31,949)
------------- -------------

CASH FLOWS (USED IN) PROVIDED FROM FINANCING
ACTIVITIES
Purchase of treasury stock (16,706) (51,399)
Dividend payments (18,154) (16,719)
Proceeds from issuance of debt, net of
issuance costs 572 1,257
Principal payments on other long-term debt
obligations (1,261) (1,271)
------------- -------------
Net cash used in financing activities (35,549) (68,132)
------------- -------------

Effect of exchange rate changes on cash 1,245 1,547
------------- -------------

Decrease in cash and cash equivalents (44,942) (80,061)

Cash and cash equivalents at beginning
of period 101,636 157,602

------------- -------------
Cash and cash equivalents at end of period $ 56,694 $ 77,541
------------- -------------
------------- -------------



TIM HORTONS INC. AND SUBSIDIARIES
SEGMENT REPORTING
(In thousands of Canadian dollars)

(Unaudited)

First Quarter Ended
-----------------------------------------------
March 29, % of March 30, % of
2009 Total 2008 Total
----------- ----------- ----------- -----------
REVENUES
Canada $ 436,603 86.1% $ 400,150 86.9%
U.S. 40,473 8.0% 29,964 6.5%
----------- ----------- ----------- -----------
Total reportable segments 477,076 94.1% 430,114 93.4%
Noncontrolling interests -
Restaurants consolidated
under FIN 46R 30,109 5.9% 30,203 6.6%
----------- ----------- ----------- -----------
Total $ 507,185 100.0% $ 460,317 100.0%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

SEGMENT OPERATING INCOME
(LOSS)
Canada $ 115,376 100.5% $ 106,535 102.8%
U.S. (564) (0.5)% (2,879) (2.8)%
----------- ----------- ----------- -----------
Reportable Segment
Operating Income 114,812 100.0% 103,656 100.0%
----------- -----------
----------- -----------
Noncontrolling interests -
Restaurants consolidated
under FIN 46R 397 828
Corporate Charges (10,316) (7,152)
----------- -----------
Consolidated Operating
Income 104,893 97,332
Interest, net (4,903) (4,361)
Income taxes (33,261) (30,489)
----------- -----------
Net Income 66,729 62,482
Net Income attributable to
noncontrolling interests (290) (662)
----------- -----------
Net Income attributable to
Tim Hortons Inc. $ 66,439 $ 61,820
----------- -----------
----------- -----------


First Quarter Ended
-----------------------
March 29, March 30,
2009 2008 $ Change % Change
----------- ----------- ----------- -----------
Sales is comprised of:
Warehouse sales $ 303,374 $ 264,705 $ 38,669 14.6%
Company-operated
restaurant sales 6,136 11,598 (5,462) (47.1)%
Sales from restaurants
consolidated under FIN 46R 30,109 30,203 (94) (0.3)%
----------- ----------- ----------- -----------
$ 339,619 $ 306,506 $ 33,113 10.8%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------



TIM HORTONS INC. AND SUBSIDIARIES
SYSTEMWIDE RESTAURANT COUNT

Increase/ Increase/
As of As of (Decrease) As of (Decrease)
March 29, December 28, From Prior March 30, From Prior
2009 2008 Quarter 2008 Year
-------------------------------------------------------
Tim Hortons
-----------

Canada
Company-operated 17 15 2 24 (7)
Franchised 2,913 2,902 11 2,815 98
-------------------------------------------------------
Total 2,930 2,917 13 2,839 91

% Franchised 99.4% 99.5% 99.2%

U.S.
Company-operated 19 19 0 40 (21)
Franchised 508 501 7 359 149
-------------------------------------------------------
Total 527 520 7 399 128

% Franchised 96.4% 96.3% 90.0%

Total Tim Hortons
Company-operated 36 34 2 64 (28)
Franchised 3,421 3,403 18 3,174 247
-------------------------------------------------------
Total 3,457 3,437 20 3,238 219
-------------------------------------------------------
-------------------------------------------------------

% Franchised 99.0% 99.0% 98.0%



TIM HORTONS INC. AND SUBSIDIARIES
Income Statement Definitions

Sales Primarily includes sales of products,
supplies and restaurant equipment (except
for initial equipment packages sold to
franchisees as part of the establishment
of their restaurant's business - see
"Franchise Fees") that are shipped
directly from our warehouses or by third
party distributors to the restaurants,
which we include in warehouse or
distribution sales. Sales include canned
coffee sales through the grocery channel.
Sales also include sales from Company-
operated restaurants and sales from
restaurants that are consolidated in
accordance with FIN 46R.

Rents and Royalties Includes franchisee royalties and rental
revenues.

Franchise Fees Includes the sales revenue from initial
equipment packages, as well as fees for
various costs and expenses related to
establishing a franchisee's business.

Cost of Sales Includes costs associated with our
distribution business, including cost of
goods, direct labour and depreciation, as
well as the cost of goods delivered by
third-party distributors to the
restaurants, and for canned coffee sold
through grocery stores. Cost of sales also
includes food, paper and labour costs for
Company-operated restaurants and
restaurants that are consolidated in
accordance with FIN 46R.

Operating Expenses Includes rent expense related to
properties leased to franchisees and other
property-related costs (including
depreciation).

Franchise fee costs Includes costs of equipment sold to
franchisees as part of the commencement of
their restaurant business, as well as
training and other costs necessary to
ensure a successful restaurant opening.

General and Administrative Includes costs that cannot be directly
related to generating revenue, including
expenses associated with our corporate and
administrative functions, allocation of
expenses related to corporate functions,
depreciation of office equipment, the
majority of our information technology
systems, and head office real estate.

Equity Income Includes income from equity investments in
joint ventures and other minority
investments over which we exercise
significant influence. Equity income from
these investments is considered to be an
integrated part of our business operations
and is, therefore, included in operating
income. Income amounts are shown as
reductions to total costs and expenses.

Other Expense (Income), net Includes expenses (income) that are not
directly derived from the Company's
primary businesses. Items include currency
adjustments, gains and losses on asset
sales, and other asset write-offs.

Noncontrolling interests Represents restaurants that the Company is
required to consolidate under FIN 46R.

Comprehensive Income Represents the change in our net assets
during the reporting period from
transactions and other events and
circumstances from non-owner sources. It
includes net income and other
comprehensive income such as foreign
currency translation adjustments and the
impact of cash flow hedges.



SOURCE Tim Hortons Inc.

###

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Anytime Fitness
Align with the world leader in fitness. Recurring-revenue business model, multi-club ownership potential. Don’t just join a franchise, join a...

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