Tim Hortons Outlines Strategic Growth Catalysts and Financial Outlook at Investor Conference

The Tim Hortons strategic plan targets investments and opportunities designed to leverage our core business strengths and business model to drive future growth. In addition to same-store sales growth drivers, the Company expects to open approximately 900 new locations in North America between 2010 to 2013.

"Our strategies will continue to transform Tim Hortons, not only adding significant scale but also introducing important additional growth layers to our business platform to extend our position as a leader in the North American restaurant industry," said Don Schroeder, president and CEO. "We are a growth company with significant long-term opportunities in Canada, and we are also excited by the prospects of continued profitable growth in the U.S., and potentially internationally in the longer term," added Schroeder.

Growth catalysts and initiatives that will be outlined at the investor conference include:

    -   The Company plans to open approximately 900 locations in North

        America between 2010 to 2013. The development in Canada of

        approximately 600 new restaurants is focused on growth markets

        including Québec, western Canada and major urban locations, in

        addition to continuing to build out Ontario. In the U.S, our

        development of approximately 300 new restaurants will be focused

        primarily on existing major regional markets, such as New York, Ohio,

        and Michigan. We also plan to push into contiguous markets, with

        approximately 30% of the development activities planned to take place

        between 2010 to 2013 in markets adjacent to our existing footprint.



    -   The Company plans to introduce new menu and product innovation

        targeted across restaurant dayparts to meet our customers' needs,

        expand our market share, and drive same-store sales. The Company is

        targeting further expansion of the breakfast daypart, and afternoon

        and evening snacking dayparts, in addition to extending lunch daypart

        opportunities, including our sandwich and soup offering. The Company

        also intends to expand its hot and cold beverage offerings.



    -   In the U.S., Tim Hortons is focused on becoming famous as a cafe and

        bake shop destination. We plan to significantly differentiate the

        brand through a new concept restaurant design that will be piloted in

        at least 10 existing locations. The new restaurant concept features a

        dramatic reimaging to more sharply define our cafe and bake shop

        positioning, including enhanced finishes, fixtures and seating areas

        as well as experiential changes. In addition, the Company will be

        testing new product offerings and adopting innovative new marketing

        and branding initiatives aligned to our cafe and bake shop brand

        positioning.



    -   We intend to complement our standard restaurant development activity

        in both Canada and the U.S. with non-standard formats and locations,

        extending our reach in hospitals, universities and colleges, airports

        and other non-traditional sites, leveraging our "we fit anywhere"

        philosophy and capability. Our non-standard development is included

        in the development targets outlined above.



    -   We intend to opportunistically pursue strategic alliances to take our

        brand to markets where we have not yet established a presence, to

        complement our existing presence, or to increase average unit volumes

        in existing locations. This may include co-branding or other

        initiatives.



    -   Tim Hortons plans to extend its co-branding initiative with Cold

        Stone Creamery(C). The Company secured exclusive development rights

        in Canada with Cold Stone Creamery in 2009, and together with our

        franchisees we plan to convert up to 60 locations in Canada in 2010

        to include the Cold Stone Creamery concept. In the U.S., we plan

        to co-brand between 15 to 20 existing locations and open between 10

        to 15 new restaurants as co-branded locations in 2010.



    -   The Company is targeting smaller communities in Canada as part of its

        overall development strategy. Standard restaurants are the primary

        focus in smaller communities, but we will also test a new, flexible

        restaurant design as well.



    -   The Company's service competitive advantage, demonstrated

        consistently by third party research, will be extended through a new

        Canadian hospitality strategy which will be developed in

        collaboration with the Disney Institute.



    -   We will pilot a new restaurant format in Canada in one location

        designed to increase capacity and throughput while maintaining the

        customer experience.



    -   The Company will also provide an update during its investor

        conference on our international strategy development process and

        perspectives.

As one of the most franchised systems in the North American restaurant industry, we also plan to continue to focus on the relationships we have with our franchisees and the success of our system. We also seek to leverage our strengths and capabilities to grow our business. Several initiatives support this focus in 2010, including:

    -   continuing to work collaboratively with our franchisees across a

        wide-range of initiatives and business matters;



    -   growing Canadian franchised restaurant sales to more than

        $5 billion;(1)



    -   assessing additional vertical integration and supply chain

        opportunities to create value for our franchisees and shareholders;

        and



    -   selectively reviewing acquisition opportunities that leverage our

        core strengths and capabilities.

Performance and Financial Outlook (See Notes below)

In support of the initiatives outlined above for 2010, the Company has established the following objectives:

    -   EPS: $1.95 to $2.05;



    -   Operating income growth: 8% to 10% (52-week basis);(2)



    -   Same-store sales growth: 3% to 5% in Canada and 2% to 4% in the U.S.;



    -   Tax rate: approximately 32%;



    -   Capital expenditures: $180 million to $200 million.

Beyond 2010, Management has established an aspirational goal of 12% to 15% earnings per share (EPS) growth on a compound annual average growth rate basis for the duration of the strategic plan period from 2011 to 2013, and expects to open approximately 900 new locations in North America, with approximately 600 expected in Canada and approximately 300 expected in the U.S.

    Notes:

    ------

    (1) Canadian franchised restaurant sales are restaurant-level sales at

        franchised restaurants in Canada, which are reported to us by our

        franchisees. These franchised restaurant sales are not included in

        our Consolidated Financial Statements, except for certain non-owned

        restaurants whose results are consolidated with ours as required

        under applicable accounting requirements. See Note 1 to the

        Consolidated Financial Statements in the Company's 2009 Annual Report

        on Form 10-K, filed March 4, 2010 ("Annual Report"). Franchise

        restaurant sales do, however, result in royalties and rental income,

        which we include in our franchise revenues, as well as distribution

        income. Franchised restaurant sales for fiscal years 2009 and 2008

        for Canada and the U.S. are set forth on page 43 of the Annual

        Report.



    (2) Operating income year-over-year growth rate for 2010 is based on

        52 weeks to remove the benefit from 2009 of approximately 1.5%

        associated with 53 weeks of operations in 2009.



    (3) The operational objectives, financial outlook, and aspirational goals

        (collectively, "targets") established for 2010 and long-term EPS

        growth are based on the accounting, tax, and other legislative rules

        in place at the time the targets were issued and on the continuation

        of share repurchase programs relatively consistent with historical

        levels. The impact of future changes in accounting, tax and/or other

        legislative rules that may or may not become effective in fiscal 2010

        and future years, changes to our share repurchase activities, and

        other matters not contemplated at the time the targets were

        established that could affect our business, are not included in the

        determination of these targets. In addition, the targets are forward-

        looking and are based on our expectations and outlook on, and shall

        be effective only as of, the date the targets were originally issued.

        Except as required by applicable securities laws, we do not intend to

        update these targets. You should refer to the Company's public

        filings for any reported updates. These targets and our performance

        generally are subject to various risks and uncertainties and are

        based on certain underlying assumptions, set forth in Item 1A of the

        Company's Annual Report, which may impact future performance and

        our achievement of these targets.

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