Tim Hortons Inc. Announces 2010 First Quarter Results: Robust Same-store Sales Growth Contributes to Strong Consolidated Earnings Performance

Systemwide sales increased 10.0% on a constant currency basis. During the quarter total revenues were $582.6 million, an increase of 4.8% compared to $555.7 million last year.

(Unaudited. All amounts in Canadian dollars and presented in accordance with U.S. GAAP)

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

-------------------------------------------------------------------------
Q1 2010 Q1 2009 % Change
-------------------------------------------------------------------------
Total Revenues $ 582.6 $ 555.7 4.8%
Operating income $ 127.7 $ 111.2 14.9%
Effective Tax Rate 31.0% 32.9%
Net Income attributable to THI $ 78.9 $ 66.4 18.7%
Diluted Earnings Per Share (EPS) $ 0.45 $ 0.37 21.9%
Fully Diluted Shares 176.6 181.3 (2.6)%
-------------------------------------------------------------------------

($ in millions, except EPS. Fully diluted shares in millions. All numbers
rounded.)

Results for 2010, and retroactively for 2009, incorporate adoption of new
accounting standard SFAS # 167 - Amendments to FASB # 46(R), now
codified within ASC 810 - Consolidations. This standard relates to
consolidation of certain variable interest entities. Please refer to the
Company's Form 10-Q for additional information.


-------------------------------------------------------------------------
Same-Store Sales(1) Q1 2010 Q1 2009
-------------------------------------------------------------------------
Canada 5.2% 3.4%
U.S. 3.0% 3.2%
-------------------------------------------------------------------------

(1) Includes sales at Franchised and Company-operated locations. As of
April 4th, 2010, 99.5% of our restaurants in Canada and 99.1% of our
U.S. restaurants were franchised.


Quarterly Highlights
--------------------
- Solid sales momentum in Canada and the U.S.
- Systemwide sales(2) grew 10.0% on a constant currency basis
- 5.2% increase in same-store sales in Canada
- 3.0% increase in same-store sales in the U.S.
- First quarter EPS growth of 21.9%
- Strong Canadian segment earnings, continued year-over-year progress
in the U.S.
- Successful product menu and marketing initiatives contribute to
growth


Tim Hortons Inc. (TSX: THI, NYSE: THI) today announced its results for the first quarter ended April 4th, 2010.

"Our business achieved strong sales and earnings performance this quarter. Our competitive advantages continue to position our business among the leading companies in our sector, and we look forward to further building upon that position," said Don Schroeder, president and CEO.

Consolidated Results

All percentage increases and decreases represent year-over-year changes for the first quarter of 2010 compared to the first quarter of 2009, unless otherwise noted.

The Company has retroactively adopted new accounting standard SFAS # 167 which has impacted prior year reported results, and 2010 actual results, for revenues and cost line items. The new standard pertains to the consolidation of variable interest entities ("VIEs"). Under the accounting standard, if the Company is determined to be the primary beneficiary of a VIE, we are required to consolidate the VIE assets, liabilities, results of operations and cash flows.

The Company analyzed its variable interests, including its equity investments and certain operator arrangements. The Company has determined that it is the primary beneficiary of our 50-50 bakery joint venture and has consolidated this operation. This bakery joint venture produces and supplies our restaurant system with par-baked donuts, Timbits(TM), some bread products, and pastries. As a result, the revenues, costs and the remaining 50% of operating income of this joint venture and from approximately 150 additional non-owned restaurants, 100 of which are in the U.S. and 50 in Canada, have also been consolidated as a result of the new standard. The Company has no equity interest in any of its franchisees and none of the Company's assets serve as collateral for the consolidated restaurants. Additional information on the impact of the adoption of the accounting standard is available in our Form 10-Q filed today.

Systemwide sales(2) increased 10.0% on a constant currency basis. During the quarter total revenues were $582.6 million, an increase of 4.8% compared to $555.7 million last year. Higher distribution revenues, and higher rents and royalties due to strong underlying product demand, were partially offset by lower year-over-year revenues from consolidated VIE's and lower revenues from Company-operated restaurants as we continue to convert these locations to the franchise and owner-operator model. Lower franchise fees also impacted total revenues during the quarter, primarily due to timing of resales, replacements and renovations versus last year, and fewer new standard restaurants compared to the first quarter of 2009. The effects of foreign exchange translation negatively impacted revenue growth this quarter by approximately 1.6%.

First quarter operating income grew 14.9% to $127.7 million compared to $111.2 million last year. Solid same-store sales and continued restaurant development, which contributed to higher rents, royalties and distribution income, contributed most to this performance. Costs continued to be well managed during the quarter, with growth in all cost line items below the rate of systemwide sales growth, even considering the approximate 2.0% benefit to costs this quarter from foreign exchange translation. Changes in foreign exchange did not have a significant impact on operating income.

Net income attributable to Tim Hortons, which excludes the impact of noncontrolling interests, was $78.9 million in the first quarter, up 18.7% compared to $66.4 million in the same quarter last year. Higher operating income, and a lower year-over-year tax rate due primarily to the Company's 2009 public company reorganization, contributed to this positive performance. Adoption of the new SFAS # 167 accounting standard did not have a significant impact on net income attributable to Tim Hortons or earnings per share.

First quarter diluted earnings per share (EPS) was $0.45, growing 21.9% compared to $0.37 per share last year. In addition to the factors benefiting net income, 2.6% fewer outstanding shares due to our share repurchase programs contributed to our EPS growth rate.

Segmented Performance Commentary

In the first quarter, both operating segments had improved same-store sales and earnings compared to the same period last year.

    Canada
------

Canadian same-store sales experienced strong growth of 5.2% over the comparable period of 2009. Same-store sales growth benefited from successful menu, marketing and operational programs which led to continued transaction growth, and from previous pricing in place in the system in certain Canadian markets which benefited average cheque.

Our strong same-store sales performance incorporates the slight negative impact of a partial timing shift of the Easter holiday into the first quarter of this year, from the second quarter of 2009. A total of 20 restaurants were opened in the first quarter. At the end of the first quarter, we had 18 restaurants in Canada co-branded as Cold Stone Creamery(C) locations.

Operating income in the Canadian segment was $132.4 million, up 14.3% compared to $115.8 million in the first quarter of last year. Our strong operating income performance in the Canadian segment benefited from higher systemwide sales, including the solid 5.2% same-store sales growth noted previously, which drove rents, royalties and distribution income.

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

The U.S. segment increased same-store sales by 3.0% in the first quarter. Significant contributions from co-branded locations featuring Cold Stone Creamery(C), and effective marketing programs and menu initiatives, benefited our performance in economic conditions that continued to be challenging. As in Canada, the partial timing shift of Easter compared to last year had a slight negative impact on same-store sales growth. A total of 4 restaurants were opened in the first quarter. At the end of the first quarter, we had 66 Tim Hortons restaurants in the U.S. co-branded as Cold Stone Creamery(C) locations.

The U.S. segment had a small operating loss of $0.3 million, an improvement compared to the $0.6 million operating loss from the same period last year. The first quarter is typically the most challenging for our business. Our systemwide sales in the U.S. benefited from continued restaurant development, and from continued same-store sales growth. Higher sales led to increased rents and royalties, offset in part by higher general and administrative costs and lower distribution contributions in the segment.

The overall rate of growth in relief we provide to franchisees in the U.S. slowed compared to historical levels, and while slightly higher in the first quarter of 2010 compared to the same period last year, the increase in relief is primarily related to either restaurants that were previously Company-operated locations or those opened for less than twelve months.

Corporate Developments

    Company receives notice invoking buy/sell provisions for its bakery joint
venture
-------------------------------------------------------------------------

The Company received notice from IAWS Group Ltd., a subsidiary of Aryzta AG, the Company's 50-50 partner under the Maidstone Bakeries joint venture, invoking the buy/sell provisions of the joint venture. As a result, the Company has the option to either sell its interest or acquire IAWS' interest in the joint venture. Aryzta believes that the business of the joint venture will be better served under an alternative ownership structure rather than under the existing joint venture arrangement. The parties have agreed to an extended negotiation period to consider amendments to the ownership structure and the underlying arrangements.

The existing joint venture documentation provides that the Company's supply rights for products extend for seven years after either party's exit from the joint venture, and sourcing commitments extend until early 2016 for donuts and Timbits, allowing the Company sufficient flexibility to secure alternative means of supply, if desired. The existing agreements also have protections regarding intellectual property rights and dealing with competitors, as well as terms relating to price determination, that remain in effect after the closing of the transaction. Given that the discussions regarding the transaction are in the preliminary stages, the resolution of these matters may change as the ultimate ownership structure is determined. The parties expect to reach final agreement by year-end 2010.

    New debt offering anticipated to refinance a portion of existing debt
---------------------------------------------------------------------

Subject to market conditions, in the second quarter of 2010 we expect to complete a private bond offering in Canada of between $200 million and $250 million. The proceeds of this anticipated offering are expected to be used to refinance a portion of our $300 million term loan and for general corporate purposes.

In anticipation of the transaction, we entered into interest rate forwards as a cash flow hedge to limit a significant portion of the interest rate volatility during the period prior to the consummation of the anticipated refinancing transaction. The interest rate forwards are designed to protect the Company from volatility in the Government of Canada interest rate by fixing the rate at the time the forwards were entered into for the expected term of the private bonds. The credit spread risk has not been hedged and is therefore subject to volatility.

Deferred debt issuance costs relating to the existing term debt are expected to be expensed proportionately at the time of any repayment and are expected to be less than $0.3 million. We also expect to settle between $30 million and $80 million of our interest rate swaps at the time we consummate the anticipated transaction. Given current market rates, this will result in a mark to market expense of approximately $1 million to $2 million in the second quarter of 2010 when the early termination of a portion of the term debt is expected to occur. This news release does not constitute an offer to sell, or the solicitation of an offer to buy, in the United States the securities referenced herein. Such securities have not been and will not be registered under the U.S. Securities Act or applicable state securities laws and may not be offered or sold in the United States absent registration or an exemption from the registration requirement under the U.S. Securities Act and applicable state securities laws.

    Construction of new Distribution Centre
---------------------------------------

The Board has approved construction of a replacement distribution centre in Kingston, Ontario to provide greater supply capacity for dry goods and to expand into frozen and refrigerated product distribution from this location for our restaurant owners. Total planned capital expenditures on this facility are estimated to be approximately $45 million, with approximately $20 million to be incurred in 2010. Exploring additional system and corporate benefits through vertical integration is an initiative outlined in our More than a Great Brand strategic plan for 2010 to 2013. When fully operational in the second half of 2011, the facility is expected to serve more than 650 restaurants in eastern Ontario, and Quebec, responding to continued projected growth in that market. As with other vertical integration initiatives, we expect this new facility will deliver important system benefits, including improved efficiency and cost-effective service for our restaurant owners, as well as provide a reasonable return to the Company.

    Board declares dividend payment of $0.13 per common share
---------------------------------------------------------

The Board of Directors has declared a quarterly dividend of $0.13 per common share, consistent with our previously announced change in dividend rate and targeted payout range. The dividend is payable on June 15th, 2010 to shareholders of record as of May 28th, 2010. Dividends are declared and paid in Canadian dollars to all shareholders with Canadian resident addresses. For U.S. shareholders, dividends paid will be converted to U.S. dollars based on prevailing exchange rates at the time of conversion by Tim Hortons for registered shareholders and by Clearing and Depository Services Inc. for beneficial shareholders.

Tim Hortons Inc. Overview

Tim Hortons is the fourth largest publicly-traded restaurant chain in North America based on market capitalization, and the largest in Canada. Operating in the quick service segment of the restaurant industry, Tim Hortons appeals to a broad range of consumer tastes, with a menu that includes premium coffee, flavored cappuccinos, specialty teas, home-style soups, fresh sandwiches, wraps, hot breakfast sandwiches and fresh baked goods, including our trademark donuts. As of April 4th, 2010, Tim Hortons had 3,596 systemwide restaurants, including 3,029 in Canada and 567 in the United States. 

TIM HORTONS INC. AND SUBSIDIARIES

               CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands of Canadian dollars, except share and per share data)

(Unaudited)

First quarter ended
April 4, March 29,
2010 2009 $ Change % Change
----------- ----------- ----------- -----------
(Note 1)
REVENUES
Sales $405,948 $391,116 $14,832 3.8%
Franchise revenues:
Rents and royalties 159,960 144,164 15,796 11.0%
Franchise fees 16,704 20,427 (3,723) (18.2%)
----------- ----------- ----------- -----------
176,664 164,591 12,073 7.3%
----------- ----------- ----------- -----------
TOTAL REVENUES 582,612 555,707 26,905 4.8%
----------- ----------- ----------- -----------

COSTS AND EXPENSES
Cost of sales 347,047 337,873 9,174 2.7%
Operating expenses 58,725 56,593 2,132 3.8%
Franchise fee costs 17,826 19,778 (1,952) (9.9%)
General and
administrative expenses 34,672 33,476 1,196 3.6%
Equity (income) (3,257) (3,065) (192) 6.3%
Other (income), net (137) (164) 27 (16.5%)
----------- ----------- ----------- -----------
TOTAL COSTS AND
EXPENSES, NET 454,876 444,491 10,385 2.3%
----------- ----------- ----------- -----------

OPERATING INCOME 127,736 111,216 16,520 14.9%

Interest (expense) (5,447) (5,457) 10 (0.2%)
Interest income 347 664 (317) (47.7%)
----------- ----------- ----------- -----------

INCOME BEFORE INCOME TAXES 122,636 106,423 16,213 15.2%

INCOME TAXES 38,063 35,041 3,022 8.6%
----------- ----------- ----------- -----------

Net Income 84,573 71,382 13,191 18.5%
Net income attributable
to noncontrolling
interests 5,684 4,943 741 15.0%
----------- ----------- ----------- -----------

NET INCOME ATTRIBUTABLE
TO TIM HORTONS INC. $78,889 $66,439 $12,450 18.7%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Basic earnings per common
share attributable to
Tim Hortons Inc. $0.45 $0.37 $0.08 21.8%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Diluted earnings per
common share attributable
to Tim Hortons Inc. $0.45 $0.37 $0.08 21.9%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Weighted average number of
common shares outstanding -
Basic (in thousands) 176,456 181,072 (4,616) (2.5%)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Weighted average number
of common shares
outstanding - Diluted
(in thousands) 176,648 181,301 (4,653) (2.6%)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Dividend per common share $0.13 $0.10 $0.03
----------- ----------- -----------
----------- ----------- -----------

N/M - not meaningful
(all numbers rounded)


Note 1 - For comparative purposes, prior year figures have been
presented on a consistent basis to reflect the Company's
adoption of SFAS # 167


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

As at
------------------------
April 4, January 3,
2010 2010
------------ -----------
(Note 1)
(Unaudited)
ASSETS

Current assets
Cash and cash equivalents $100,123 $121,653
Restricted cash and cash equivalents 33,071 60,629
Restricted investments 17,015 20,186
Accounts receivable, net 163,496 179,942
Notes receivable, net 19,098 20,823
Deferred income taxes 4,438 3,475
Inventories and other, net 93,267 80,490
Advertising fund restricted assets 28,323 26,681
------------ -----------
Total current assets 458,831 513,879

Property and equipment, net 1,467,126 1,494,032

Notes receivable, net 4,452 3,475

Deferred income taxes 8,993 8,919

Intangible assets, net 7,923 8,405

Equity investments 45,782 45,875

Other assets 19,929 19,706
------------ -----------
Total assets $2,013,036 $2,094,291
------------ -----------
------------ -----------

Note 1 - For comparative purposes, prior year figures have been presented
on a consistent basis to reflect the Company's adoption of SFAS
# 167



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

As at
------------------------
April 4, January 3,
2010 2010
------------ -----------
(Note 1)
(Unaudited)
LIABILITIES AND EQUITY

Current liabilities
Accounts payable $121,556 $135,248
Accrued liabilities:
Salaries and wages 14,190 23,268
Taxes 22,178 27,586
Other 82,828 111,401
Deferred income taxes 94 376
Advertising fund restricted liabilities 43,920 43,944
Current portion of long-term obligations 307,795 7,821
------------ -----------
Total current liabilities 592,561 349,644
------------ -----------

Long-term obligations
Term debt 35,994 336,302
Advertising fund restricted debt 300 415
Capital leases 67,183 67,156
Deferred income taxes 13,110 10,159
Other long-term liabilities 69,985 74,929
------------ -----------
Total long-term obligations 186,572 488,961
------------ -----------

Equity
Equity of Tim Hortons Inc.
Common shares
Authorized: unlimited shares
Issued: 175,412,510 and 177,318,614 shares,
respectively 497,535 502,872
Common stock held in trust, at cost:
278,500 shares (9,437) (9,437)
Retained earnings 797,517 796,235
Accumulated other comprehensive loss (137,597) (120,061)
------------ -----------
Total equity of Tim Hortons Inc. 1,148,018 1,169,609
Noncontrolling interests 85,885 86,077
------------ -----------
Total equity 1,233,903 1,255,686
------------ -----------
Total liabilities and equity $2,013,036 $2,094,291
------------ -----------
------------ -----------

Note 1 - For comparative purposes, prior year figures have been presented
on a consistent basis to reflect the Company's adoption of SFAS
# 167



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


First Quarter Ended
April 4, March 29,
2010 2009
------------ -----------
(Note 1)
(Unaudited)

CASH FLOWS PROVIDED FROM (USED IN)
OPERATING ACTIVITIES
Net income $84,573 $71,382
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 28,865 27,713
Stock-based compensation expense 2,295 1,481
Equity income, net of cash dividends (59) 1,401
Deferred income taxes 1,782 834
Changes in operating assets and liabilities
Restricted cash and cash equivalents 27,397 28,166
Accounts and notes receivable 15,790 5,993
Inventories and other (11,887) (7,136)
Accounts payable and accrued liabilities (56,924) (97,487)
Other, net 2,177 1,963

------------ -----------
Net cash provided from operating activities 94,009 34,310
------------ -----------

CASH FLOWS (USED IN) PROVIDED FROM
INVESTING ACTIVITIES
Capital expenditures (24,289) (36,134)
Proceeds from sale of restricted investments 3,200 -
Principal payments received on notes receivable 209 585
Other investing activities (1,621) (1,286)

------------ -----------
Net cash used in investing activities (22,501) (36,835)
------------ -----------

CASH FLOWS (USED IN) PROVIDED FROM
FINANCING ACTIVITIES
Purchase of common shares/treasury stock (61,655) (16,706)
Dividend payments to common shareholders (22,698) (18,154)
Distributions to noncontrolling interests (5,876) (8,109)
Proceeds from issuance of debt,
net of issuance costs 1,160 572
Principal payments on other
long-term debt obligations (1,604) (1,261)

------------ -----------
Net cash used in financing activities (90,673) (43,658)
------------ -----------

Effect of exchange rate changes on cash (2,365) 1,245
------------ -----------

Decrease in cash and cash equivalents (21,530) (44,938)

Cash and cash equivalents at beginning of period 121,653 124,717

------------ -----------
Cash and cash equivalents at end of period $100,123 $79,779
------------ -----------
------------ -----------

Note 1 - For comparative purposes, prior year figures have been presented
on a consistent basis to reflect the Company's adoption of SFAS
# 167



TIM HORTONS INC. AND SUBSIDIARIES
SEGMENT REPORTING
(In thousands of Canadian dollars)
(Note 1 and 2)

(Unaudited)

First Quarter ended
-----------------------------------------------
April 4, % of March 29, % of
2010 Total 2009 Total
----------- ----------- ----------- -----------
REVENUES
Canada $468,665 80.4% $428,605 77.1%
U.S. 27,713 4.8% 34,327 6.2%
----------- ----------- ----------- -----------
Total reportable
segments 496,378 85.2% 462,932 83.3%
Variable interest
entities 86,234 14.8% 92,775 16.7%
----------- ----------- ----------- -----------
Total $582,612 100.0% $555,707 100.0%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

SEGMENT OPERATING
INCOME (LOSS)
Canada $132,386 100.2% $115,822 100.5%
U.S. (246) (0.2)% (564) (0.5)%
----------- ----------- ----------- -----------
Reportable Segment
Operating Income 132,140 100.0% 115,258 100.0%
----------- -----------
----------- -----------
Variable interest entities 6,480 6,274
Corporate Charges (10,884) (10,316)
----------- -----------
Consolidated
Operating Income 127,736 111,216
Interest, net (5,100) (4,793)
Income taxes (38,063) (35,041)
----------- -----------
Net Income 84,573 71,382
Net Income attributable
to noncontrolling
interests 5,684 4,943
----------- -----------
Net Income attributable
to Tim Hortons Inc. $78,889 $66,439
----------- -----------
----------- -----------


First quarter ended
-----------------------
April 4, March 29,
2010 2009 $ Change % Change
----------- ----------- ----------- -----------
Sales is comprised of:
Distribution sales $314,724 $292,205 $22,519 7.7%
Company-operated
restaurant sales 4,990 6,136 (1,146) (18.7)%
Sales from variable
interest entities 86,234 92,775 (6,541) (7.1)%
----------- ----------- ----------- -----------
$405,948 $391,116 $14,832 3.8%
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Note 1 - For comparative purposes, prior year figures have been presented
on a consistent basis to reflect the Company's adoption of SFAS
# 167

Note 2 - While the adoption of SFAS # 167 resulted in the consolidation
of its 50-50 bakery joint venture, the Company's chief decision
maker continues to view and evaluate the performance of the
Canadian segment with this 50-50 bakery joint venture accounted
for on an equity accounting basis, which reflects 50% of its
operating income (consistent with views and evaluations prior to
the adoption of the Standard). As a result, the net revenues,
and the remaining 50% of operating income of this joint venture
have been included in Variable interest entities along with
revenues and operating income from our non-owned consolidated
restaurants.



TIM HORTONS INC. AND SUBSIDIARIES
SYSTEMWIDE RESTAURANT COUNT

Increase/ Increase/
As of As of (Decrease) As of (Decrease)
April 4, January 3, From March 29, From Prior
2010 2010 Year End 2009 Year
--------------------------------------------------------

Tim Hortons
-----------

Canada
Company-operated 15 13 2 17 (2)
Franchised 3,014 3,002 12 2,913 101
--------------------------------------------------------
Total 3,029 3,015 14 2,930 99

% Franchised 99.5% 99.6% 99.4%

U.S.
Company-operated 5 5 0 19 (14)
Franchised 562 558 4 508 54
--------------------------------------------------------
Total 567 563 4 527 40

% Franchised 99.1% 99.1% 96.4%

Total Tim Hortons
Company-operated 20 18 2 36 (16)
Franchised 3,576 3,560 16 3,421 155
--------------------------------------------------------
Total 3,596 3,578 18 3,457 139
--------------------------------------------------------
--------------------------------------------------------

% Franchised 99.4% 99.5% 99.0%



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
distribution sales. Sales include canned
coffee sales through the grocery channel.
Sales also include sales from Company-
operated restaurants and sales from certain
non-owned restaurants that are consolidated
in accordance with ASC 810 (formerly FIN 46R)
as well as sales from our bakery joint
venture which we are required to consolidate.

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 certain non-owned restaurants
that are consolidated in accordance with ASC
810 (formerly FIN 46R) as well as cost of
sales from our bakery joint venture.

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, and 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,
excluding joint ventures that we are required
to consolidate. 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 (Income), net Includes expenses (income) that are not
directly derived from the Company's primary
businesses. Items include foreign currency
adjustments, gains and losses on asset sales,
and other asset write-offs.

Noncontrolling interests Relates to the consolidation of our bakery
joint venture and certain non-owned
restaurants that the Company is required to
consolidate under ASC 810 (formerly SFAS #
167 and 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 / Nevistas


More News:


My Trip

My Password Reset

To reset your password, please enter your email address below. An email containing further instructions will be immediately sent to the email address associated with your account.

To top