Tim Hortons 2010 and Four-Year Strategic Plan

Tim Hortons outlined their 2010 and four-year (2010 to 2013) strategic objectives and expectations in their 2009 Annual Report on Form 10-K filed on March 4th, 2010, and in a news release issued prior to an investor conference on March 5th. We are reproducing below our 2010 and four-year strategic plan objectives as disclosed in the Form 10-K to address certain media misreporting subsequent to the conference pertaining to restaurant development.

The Company's 2010 operational objectives (See Accompanying Notes)

In support of the initiatives outlined [in the 2009 Annual Report on Form 10-K] for 2010, we have established the following objectives:

  • we are targeting same-store sales growth of 3% to 5% in Canada and 2% to 4% in the U.S.;
  • we expect to open a total of 170 to 210 restaurant locations. Of these openings, we are planning to open 130 to 150 restaurants in Canada and 40 to 60 locations in the U.S. The majority of these locations will be standard restaurants. The targeted openings also include non-standard locations in both markets;
  • we plan to work together with our franchisees to convert up to 60 Tim Hortons locations to include Cold Stone Creamery, and we expect to convert between 15 to 20 existing restaurants in the U.S. to the co-branded Cold Stone Creamery concept. In addition, of our total planned 40 to 60 new restaurant openings in the U.S., we expect that between 10 to 15 will be opened as co-branded Tim Hortons and Cold Stone Creamery locations;
  • we plan to test approximately 10 new concept restaurants in certain U.S. markets, as described [in the 2009 Annual Report on Form 10-K]; and
  • we plan to pilot new Canadian development models, as described [in the 2009 Annual Report on Form 10-K].
2010 Financial Outlook (See Accompanying Notes)

Based on our strategic and operational plans, we have established the following 2010 financial targets:

  • EPS of $1.95 to $2.05;
  • Operating income growth of 8% to 10% (52-week basis)(2);
  • Tax rate of approximately 32%; and
  • Capital expenditures of $180 million to $200 million.
Long-Term Aspirations (See Accompanying Notes)
  • EPS: long-term aspirational earnings per share (EPS) compounded annual growth beyond 2010 and through 2013 is expected to be between 12% to 15%; and
  • New restaurant development from 2010 to 2013:
    • Canada: approximately 600;
    • U.S.: approximately 300; and
    • Total North America: approximately 900.


(1) (Intentionally deleted, not referenced)

(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 2009) Annual Report on Form 10-K, which may impact future performance and our achievement of these targets.

on March 12, 2010