8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 8, 2013

TIM HORTONS INC.

(Exact name of registrant as specified in its charter)

Canada	001-32843	98-0641955
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

874 Sinclair Road, Oakville, ON, Canada	L6K 2Y1
(Address of principal executive offices)	(Zip Code)

(905) 845-6511

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

On August 8, 2013, management of Tim Hortons Inc. (the “Company”) provided a slide presentation during the Company’s fiscal 2013 second quarter earnings conference call. The presentation materials are attached hereto as Exhibit 99.1 and incorporated herein by reference. These materials may also be used by the Company at one or more subsequent conferences with analysts and investors.

The information contained in the attached presentation materials is summary information that is intended to be considered in the context of the Company’s Securities and Exchange Commission filings and other public announcements. The Company undertakes no duty or obligation to publicly update or revise this information, although it may do so from time to time.

The information in this Current Report on Form 8-K, including the exhibit furnished pursuant to Item 9.01, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities under that section. Furthermore, the information in this Current Report on Form 8-K, including the exhibit furnished pursuant to Item 9.01, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit 99.1 Earnings conference call slide presentation materials used beginning on August 8, 2013.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TIM HORTONS INC.
Date: August 8, 2013	By:	/s/ JILL E. AEBKER
		Jill E. Aebker
		Executive Vice President, General Counsel and Secretary

EX-99.1

Tim Hortons

Tim Hortons

2013

Second Quarter

Conference Call

2013

Second Quarter

Conference Call

Building from Strength

Exhibit 99.1

Speakers (in sequence)

Scott Bonikowsky

Vice President, Corporate, Public

& Government Affairs

Paul House

Chairman

Marc Caira

President & Chief Executive Officer

Cynthia Devine

Chief Financial Officer

2

Safe Harbor Statement

3

Certain information in this presentation, particularly information regarding future economic performance, finances, and plans,

expectations and objectives of management, and other information, constitutes forward-looking information within the

meaning of Canadian securities laws and forward-looking statements within the meaning of the Private Securities Litigation

Reform Act of 1995.  We refer to all of these as forward-looking statements. Various factors including competition in the quick

service segment of the food service industry, general economic conditions and others described as “risk factors” in the

Company’s 2012 Annual Report on Form 10-K filed February 21

st

, 2013, and our Quarterly Report on Form 10-Q to be filed on

August 8

th

, 2013 with the U.S. Securities and Exchange Commission and Canadian Securities Administrators, 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 presentation, which

speak only as to management’s expectations as of the date hereof.  

Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited

to, assumptions about: the absence of an adverse event or condition that damages our strong brand position and reputation;

the absence of a material increase in competition or in volume or type of competitive activity within the quick service restaurant

segment of the food service industry; ability to obtain financing on favourable terms; ability to maintain investment grade credit

ratings; prospects and execution risks concerning the U.S. market strategy; general worldwide economic conditions; cost and

availability of commodities; the ability to retain our senior management team or the inability to attract and retain new qualified

personnel; continuing positive working relationships with the majority of the Company’s restaurant owners; the absence of any

material adverse effects arising as a result of litigation; and there being no significant change in the Company’s ability to comply

with current or future regulatory requirements.  

We are presenting this information for the purpose of informing you of management’s current expectations regarding these

matters, and this information may not be appropriate for any other purpose.  We assume no obligation to update or alter any

forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as

required by applicable law.  Please review the Company's Safe Harbor Statement at

www.timhortons.com/en/about/safeharbor.html.

Chairman

PAUL HOUSE

Appointment of Board Members

5

Sherri Brillon

•

Thomas Milroy

•

Executive Vice-President and

Chief Financial Officer of

Encana Corpoaration

Chief Executive Officer of

BMO Capital Markets

President &

Chief Executive Officer

MARC CAIRA

Q2 2013 Overview

Progress in same-store sales

in Canada and U.S.

Continuation of intensified

competitive environment

Positive contributions from

recently-introduced products

Growth in Adjusted Operating

Income* and EPS

Strong cash flow and balance

sheet

7

*Adjusted operating income is a non-GAAP measure, and excludes a $0.6 million charge for corporate reorganization expenses in Q2 2013.  Please refer to slides 21 and 22 for the reconciliation and details of

reconciling item.

Optimizing Capital Structure

Board

approved a

$

900 million

increase in

debt level

Planning to

buy back

~$1 billion

of shares

within the

next year

Proposed

debt ratios

would be

more in line

with Canadian

retail and

many U.S.

restaurant

peers

8

U.S. Strategy –

Improving Returns

Focused on achieving success

in the U.S.

Accelerating our initiative to

partner with well-capitalized

franchisees:

Complementing our development

approach

Reducing capital

starting in 2014

Driving higher returns

9

Chief

Financial

Officer

CYNTHIA DEVINE

Recapitalization –

Factors Considered

Accretive to EPS

Remaining consistent with our focus on building

shareholder value and our strong track record of returning

capital to shareholders

Maintaining a structure that is aligned with the capital

intensity of our business

Preserving strategic flexibility

Operating within our existing

corporate structure

11

Top-Line Sales Growth

Top-Line Sales Growth

12

Percentages represent year-over-year comparisons, unless otherwise noted.

*Constant currency basis.

(1)

Systemwide sales growth includes restaurant sales at both Franchised and Company-operated restaurants. 

(2)

Same-stores

sales

growth

includes

sales

at

Franchised

and

Company-operated

restaurants

open

for

13

months

or

more.

See

information

on

slide

20

regarding

these

measures.

2013

2012

Q2

Q2

Systemwide Sales

Growth

(1)*

5.0%

6.0%

Same-Store Sales

Growth

(2)

1.5%

1.8%

1.4%

4.9%

13

Updating FY2013 Guidance

Updating FY2013 Guidance

*Source:  2012 Annual Report on Form 10-K, filed on February 21, 2013 with the SEC and the CSA.

Previously

Announced*

Updated

Targets

Targets

Same-Store Sales

Growth

2 -

4%

Below Range

3 -

5%

Below Range

Earnings Per Share

2.87 -

2.97

Reaffirming

$

$

14

Q2 2013 –

Q2 2013 –

Revenues

Revenues

All numbers rounded.

2013

2012

%

Q2

Q2

Change

Sales

Distribution sales

$

468.6

$

471.3

(0.6%)

Company-operated

restaurant sales

6.5

7.0

(7.6%)

Sales from VIEs

93.5

85.5

9.4%

$

568.6

$

563.8

0.8%

Franchise revenues

Rents & royalties

209.3

199.0

5.2%

Franchise fees

22.3

22.8

(2.4%)

231.6

221.8

4.4%

Total revenues

$

800.1

$

785.6

1.9%

15

All numbers rounded.  N/M –

Not Meaningful.

2013

2012

%

Q2

Q2

Change

Cost of sales

$

489.1

$

492.9

(0.8%)

Operating expenses

77.0

72.3

6.5%

Franchise fee costs

23.3

24.8

(5.9%)

General & administrative

expenses

38.0

40.3

(5.5%)

Equity (income)

(3.9)

(3.9)

1.5%

Corporate reorganization

expenses

0.6

1.3

N/M

Other (income) expense, net

(0.6)

(1.0)

N/M

Total costs & expenses, net

$

623.6

$

626.7

(0.5%)

Q2 2013 –

Costs & Expenses

All numbers rounded.

*Adjusted operating income is a non-GAAP measure, and excludes corporate reorganization expenses of $0.6 million in Q2 2013 ($10.1 million YTD 2013) and $1.3 million in Q2 2012 ($1.3 million YTD 2012). Please

refer to slides 21 and 22 for the reconciliation and details of reconciling item.

16

2013

2012

%

Q2

Q2

Change

Operating income

$

176.6

$

158.8

11.2%

Interest expense, net

8.1

7.9

2.6%

Income taxes

43.9

41.7

5.3%

Net income attributable to

noncontrolling interests

0.8

1.2

(29.4%)

Net income attributable to THI

123.7

108.1

14.5%

Diluted EPS attributable to THI   

$

0.81

$

0.69

17.0%

Diluted weighted average

shares outstanding (millions)

152,637

155,995

(2.2%)

Adjusted operating income*

$

177.2

$

160.1

10.7%

Q2 2013 –

Earnings Highlights

Q2 2013 –

Segment Results

U.S.

CANADA

Corporate

services

All

numbers

rounded.

N/M

–

Not

Meaningful.

Please note that we have reclassified our segments effective Q1 2013

17

Operating Income

Operating Income

2013

2012

%

Q2

Q2

Change

$

174.8

$

165.4

5.7%

$

2.6

$

4.1

(36.9%)

($ 1.4)

($11.1)

N/M

Q2 2013 –

Q2 2013 –

Financial Review

Financial Review

All numbers rounded.

*Includes amounts related to the Expanded Menu Board Program.

**Includes $44.4 million long-term portion of Advertising Fund debt related to Expanded Menu Board Program.

18

Cash Flow

Q2 Cash Capex*

$

43.3

Q2 Depreciation and

Amortization*

$

36.7

Balance Sheet

Cash and cash

equivalents

$

86.6

Restricted cash and

cash equivalents

$

104.8

Total current assets

$

541.1

Total assets

$

2,264.9

Long-term debt**

$

408.7

Capital leases –

long-term

$

115.6

Total

systemwide

sales

growth

includes

restaurant

level

sales

at

both

Company

and

Franchised restaurants. Approximately 99.5% of our systemwide restaurants were

franchised as at June 30

th

, 2013. 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

second

quarter

of

2013,

systemwide

sales

on

a constant currency basis increased 5.0% compared to the second quarter of 2012.

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, and are ultimately driven by consumer demand.

We believe systemwide sales and same-store sales growth provide meaningful information

to investors regarding the size of our system, the overall health and financial performance

of the system, and the strength of our brand and restaurant owner base, which ultimately

impacts our consolidated and segmented financial performance. Franchised restaurant sales

are not generally included in our Condensed Consolidated Financial Statements (except for

certain non-owned restaurants consolidated in accordance with applicable accounting

rules). 

Systemwide Sales Growth

& Same-Store Sales

20

Adjusted operating income is a non-GAAP measure. Management uses adjusted operating

income to assist in the evaluation of year-over-year performance, and believes that it will be

helpful to investors as a measure of underlying operational growth rates. This non-GAAP

measure is not intended to replace the presentation of our financial results in accordance

with GAAP. The Company’s use of the term adjusted operating income may differ from

similar measures reported by other companies. The reconciliation

of operating income, a

GAAP measure, to adjusted operating income, a non-GAAP measure, is set forth in the

following slide.

Information on Non-GAAP

Measure: Adjusted Operating Income

21

22

Reconciliation of Adjusting

Operating Income

All numbers rounded.

2013

2012

2013

2012

Q2

Q2

YTD

YTD

Operating income

$

176.6

$

158.8

$

304.5

$

290.5

Add: Corporate

reorganization costs

0.6

1.3

10.1

1.3

Adjusted operating

income

$

177.2

$

160.1

$

314.6

$

291.7