425

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): November 5, 2014

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:

x 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 2.02 Results of Operations and Financial Condition.

On November 5, 2014, Tim Hortons Inc. (the “Corporation”) issued a press release containing financial information regarding its third quarter 2014 financial results and certain other information. The press release is attached hereto as Exhibit 99.1.

The information pursuant to this Item 2.02 and Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, 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 Item 2.02 and Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed to be incorporated by reference into the filings of the Corporation under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Item 7.01 Regulation FD Disclosure.

The Corporation will host a quarterly conference call to discuss its third quarter 2014 results on Wednesday, November 5, 2014, at 10:30 a.m. (Eastern Daylight Time). Investors and the public may listen to the conference call in the manner described in the Corporation’s press release attached hereto as Exhibit 99.1.

Item 8.01 Other Events.

On November 5, 2014, the Corporation also announced that the Board of Directors has declared a Cdn.$0.32 per common share quarterly dividend. The dividend is payable on December 5, 2014 to shareholders of record at the close of business on November 20, 2014. The declaration of any and all future dividends is subject to the Board’s discretion. The full text of the Corporation’s press release relating to the current dividend declaration is attached hereto as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit 99.1	Press release dated November 5, 2014, issued by the Corporation regarding the release of the third quarter 2014 financial results and other information.
Exhibit 99.2	Press release dated November 5, 2014, issued by the Corporation announcing the declaration of a Cdn.$0.32 per common share dividend.
Exhibit 99.3	Safe Harbor Statement.

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: November 5, 2014	By:	/s/ JILL E. SUTTON
		Jill E. Sutton Executive Vice President, General Counsel and Secretary

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

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

Tim Hortons Inc. announces 2014third quarter results:

Strong momentum in the business;

same-store sales growth highest in past 10 quarters

Financial & Sales Highlights

Performance	Q3 2014			Q3 2013			% Change	YTD 2014
Total revenues	$	909.2		$	825.4		10.2%	$	2,549.9
Operating income	$	168.8		$	168.8		0.0%	$	506.5
Adjusted operating income(1)	$	196.1		$	169.8		15.5%	$	533.7
Effective tax rate	34.0		%	28.3		%		30.3		%
Net income attributable to THI	$	98.1		$	113.9		-13.8%	$	312.8
Diluted earnings per share attributable to THI (“EPS”)	$	0.74		$	0.75		-2.2%	$	2.31
Adjusted EPS(1)	$	0.95		$	0.76		25.2%	$	2.52
Fully diluted shares (weighted average)	132.9			150.9			(11.9)%	135.3

(All numbers in millions, except EPS and effective tax rate. All numbers rounded.)

(1) Adjusted operating income and adjusted diluted earnings per share attributable to THI ("adjusted EPS") are non-GAAP measures, and exclude costs related to the proposed transaction with Burger King Worldwide, Inc., an affiliate of 3G Capital, of $27.3 million in Q3 2014, and corporate reorganization expenses of $1.0 million in Q3 2013. Please refer to “Information on non-GAAP Measures” and the reconciliation information in footnote (3) of this release for details of reconciling items.

Same-Store Sales(2)	Q3 2014	Q3 2013	YTD 2014
Canada	3.5%	1.7%	2.6%
U.S.	6.8%	3.0%	4.8%

(2) Includes average same-store sales at franchised and Company-operated locations open for 13 months or more. Substantially all of our restaurants are franchised.

Highlights

• Strong same-store sales growth in both Canada and the U.S. driven primarily by gains in average cheque

• Sales continued to benefit from menu innovations including the Spicy Crispy Chicken Sandwich and Dark Roast coffee

• Costs of $27.3 million associated with the proposed transaction with Burger King Worldwide, Inc., an affiliate of 3G Capital, had a negative impact of $0.21 on EPS

• Adjusted EPS⁽³⁾ increased 25.2% to $0.95

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OAKVILLE, ONTARIO, (November 5, 2014): Tim Hortons Inc. (TSX: THI, NYSE: THI) today announced results for the third quarter ended September 28, 2014.

"We have strong momentum in our business, supported by early stage execution of our strategic plan. We are pleased with our ongoing growth and evolution which we believe is positioning our brand for long-term success," said Marc Caira, president and CEO. "With our strategic transaction announced in August, we can build on our momentum and have the opportunity to participate in the creation of a global powerhouse in the quick service restaurant sector. We expect Tim Hortons to significantly expand its reach as a strong, independent brand within the new company."

Consolidated Results

All percentage increases and decreases represent year-over-year changes for the third quarter of 2014 compared to the third quarter of 2013, unless otherwise noted.

Systemwide sales⁽⁴⁾ increased 7.5% on a constant currency basis, as a result of same-store sales growth of 3.5% in Canada and 6.8% in the U.S., as well as new restaurant development.

Total revenues grew 10.2% to $909.2 million compared to $825.4 million last year. Systemwide sales growth was the primary driver of both a 12.8% increase in distribution sales and growth of 8.6% in rents and royalties revenue. Franchise fee revenues grew by 17.4% due to higher levels of restaurant development and increased renovations in Canada, which also resulted in higher associated franchise fee costs.

Cost of sales increased by 8.6%, due primarily to growth in distribution cost of sales driven by systemwide sales growth. Operating expenses increased by 10.2%, due to higher rent and depreciation costs related to new restaurant openings and increased depreciation related to renovations. G&A expenses grew by 7.5% due primarily to increased salaries and benefits resulting from increased performance-related accruals and fewer vacancies in the organization. G&A growth was moderated by breakage income recognized in the quarter.

In the third quarter we recognized $27.3 million of costs associated with the proposed transaction with Burger King Worldwide, Inc., an affiliate of 3G Capital (the "Transaction") (as further described below).

Operating income was flat at $168.8 million. Adjusted operating income⁽³⁾, which excludes the impact of $27.3 million of costs associated with the Transaction and $1.0 million of corporate reorganization costs incurred in Q3 2013, increased 15.5% to $196.1 million. (Please refer to “Information on non-GAAP Measure” below for a reconciliation of adjusted operating income to operating income, the most directly comparable GAAP measure.)

Net income attributable to Tim Hortons Inc. was $98.1 million, a decrease of $15.7 million. Net income was impacted by the full amount of the Transaction costs, as there was no tax benefit for these expenses. For the same reason, the effective tax rate increased significantly in the third quarter.

EPS of $0.74 was down from $0.75 in Q3 2013 due mainly to the $0.21 impact of the Transaction costs. Adjusted EPS⁽³⁾ of $0.95 grew by 25.2% as a result of strong operating performance, as well as the cumulative impact of our recapitalization and expanded share repurchase program, which resulted in a lower number of shares outstanding. (Please refer to “Information on non-GAAP Measure” below for a reconciliation of adjusted EPS to EPS, the most directly comparable GAAP measure.)

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Segmented Performance Commentary

Same-store sales growth rates continued to build on the strong performance reported in the second quarter.

Canada

Same-store sales in our Canadian segment grew by 3.5%. The increase was driven by gains in average cheque resulting from pricing and favourable product mix, partially offset by a slight decline in same-store transactions. Systemwide transactions grew as a result of new restaurants added to our system. Average cheque benefited from increased sales in both our breakfast and lunch dayparts, aided in part by the introduction of our Spicy Crispy Chicken Sandwich, as well as sales of baked goods, including new specialty donuts. Our new Dark Roast coffee blend, which was introduced systemwide towards the end of the quarter, also proved popular amongst our guests.

Operating income in the Canadian segment grew 9.2% to $196.2 million. Systemwide sales growth of 6.9% led to increased rents and royalties income and a higher allocation of supply chain income. The Canadian segment also benefited from the recognition of breakage income. We opened 41 restaurants in Canada in the third quarter.

United States

U.S. same-store sales increased by 6.8% in the quarter, driven by gains in average cheque resulting from favourable product mix and pricing and, to a lesser extent, same-store transactions. The U.S. segment experienced continued momentum, benefiting from increased sales in our breakfast daypart and cold beverage category, as a result of continued product innovation. Increased sales of coffee and hot beverages also contributed to same-store sales growth. Our new Dark Roast coffee blend, which was introduced systemwide towards the end of the quarter, also proved popular amongst our guests.

The U.S. segment had operating income of $7.4 million, an increase of $4.7 million compared to the third quarter of 2013. Systemwide sales growth of 12.8% drove an increase in rents and royalties income, and same-store sales growth led to a significant reduction in relief provided to franchisees. Year-over-year results also benefited as we recognized a $2.5 million asset impairment charge in Q3 2013 that was not present in the current quarter. These positive factors were partially offset by an increase in G&A expense.

We opened 10 restaurants in the U.S. in the third quarter. In October 2014, we signed an area development agreement with a new partner to develop approximately 10 Tim Hortons locations in New Jersey over the next five years. We have now executed seven development agreements in the U.S., representing approximately 145 new restaurants over 10 years.

Corporate services

The Corporate services segment had an operating loss of $9.7 million, compared to a loss of $14.3 million in the third quarter of 2013. The improvement was driven by the reversal of unfavourable product margins recognized in our supply chain in the first half of the year. This was partially offset by increased corporate costs, as described above in the explanation of G&A expenses in the quarter. Six restaurants were opened in the Gulf Cooperation Council in the quarter.

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Significant Developments & Initiatives

Proposed Transaction with Burger King Worldwide, Inc. an affiliate of 3G Capital

On August 26, 2014, the Company announced that it had entered into a definitive arrangement agreement with Burger King Worldwide, Inc. and certain of its affiliates with respect to the Transaction. Pursuant to and subject to the terms and conditions of the arrangement agreement, the Transaction will result in Burger King Worldwide, Inc. and Tim Hortons being indirect subsidiaries of a newly formed Canadian company, 9060669 Canada Inc. (“Holdings”). The Transaction has been unanimously approved by the Board of Directors of the Company as well as the Board of Directors of Burger King Worldwide, Inc.

Company shareholders will receive, for each Company common share held, at the election of the holder: (a) C$65.50 in cash and 0.8025 common shares of Holdings (the “Arrangement Mixed Consideration”); (b) C$88.50 in cash (the “Arrangement Cash Consideration”); or (c) 3.0879 common shares of Holdings (the “Arrangement Share Consideration”). Common shares of the Company with respect to which no election is made will receive the Arrangement Mixed Consideration. Shareholders who elect to receive the Arrangement Cash Consideration or the Arrangement Share Consideration will be subject to proration in accordance with the Arrangement so that the total amount of cash paid and the total number of common shares of Holdings issued to the Company’s shareholders as a whole are equal to the total amount of cash and number of common shares of Holdings that would have been paid and issued if all of the Company’s shareholders received the Arrangement Mixed Consideration.

The Transaction is subject to customary closing conditions, including, among others, approval by the Company’s shareholders, approval by the Ontario Superior Court of Justice and regulatory approvals in Canada. An interim order of the Ontario Superior Court of Justice was issued on November 3, 2014. The approval of Tim Hortons shareholders will be sought at a special meeting of shareholders. The record date for determining the Company's shareholders entitled to receive notice of and to vote at the special meeting is November 3, 2014. The special meeting is scheduled to be held on December 9, 2014 at the Tim Hortons Innovation Centre, 226 Wyecroft Road in Oakville, Ontario. The closing of the Transaction is currently anticipated to occur in late 2014 or early 2015.

Board declares dividend payment of $0.32 per common share

The Board of Directors has declared a quarterly dividend of $0.32 per common share, payable on December 5, 2014, to shareholders of record as of the close of business on November 20, 2014. Dividends declared will be 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 CDS Clearing and Depository Services Inc. for beneficial shareholders.

Tim Hortons conference call today at 10:30 a.m. (EST) Wednesday, November 5, 2014

Tim Hortons will host a conference call today to discuss third quarter results, scheduled to begin at 10:30 a.m. (EST). The dial-in number is (416) 915-3239 or (800) 319-4610. No access code is required. A simultaneous web cast of the call, including presentation material, will be available at www.timhortons-invest.com. A replay of the call will be available until November 12, 2014 and can be accessed at (800) 319-6413. The call replay reservation number is 1447#. The call and presentation material will also be archived in the Events and Presentations section of our website.

Forward-Looking Statements

This news release includes forward-looking statements which constitute forward-looking information within the meaning of Canadian securities laws and forward-looking statements within

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the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by the words “may,” “might,” “believes,” “thinks,” “anticipates,” “plans,” “expects,” “intends” or similar expressions and include statements regarding (1) expectations regarding whether a transaction will be consummated, including whether conditions to the consummation of the Transaction will be satisfied, or the timing for completing the Transaction, (2) expectations for the effects of the Transaction or the ability of the new company to successfully achieve business objectives, including integrating the companies or the effects of unexpected costs, liabilities or delays, and (3) expectations for other economic, business, and/or competitive factors. Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of the combined company.

These forward-looking statements are subject to inherent risks and uncertainties and are based on numerous assumptions which may prove incorrect and which could cause actual results or events to differ materially from the forward-looking statements. Such assumptions include, but are not limited to, the assumptions set forth in this news release, as well as (a) that the Transaction will be completed in accordance with the terms and conditions of the arrangement agreement and plan of merger and on the timelines contemplated by the parties thereto, (b) that court, shareholder, stock exchange and regulatory approvals will be obtained on the basis and timelines anticipated by the parties, (c) that the securities of Holdings and New Red Canada Limited Partnership ("Partnership") will be approved for listing on the New York Stock Exchange and/or the Toronto Stock Exchange, as applicable, and (d) that the other conditions to the closing of the Transaction will be satisfied.

These forward-looking statements may be affected by risks and uncertainties in the business of Tim Hortons and market conditions, including that the assumptions upon which the forward-looking statements in this report are based may be incorrect in whole or in part. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosure contained in filings made by Tim Hortons with the U.S. Securities and Exchange Commission, including Tim Hortons annual report on Form 10-K for the year ended December 29, 2013, and Tim Hortons quarterly report on Form 10-Q expected to be filed on November 6, 2014 with the U.S. Securities and Exchange Commission and the Canadian Securities Administrators. Tim Hortons wishes to caution readers that certain important factors may have affected and could in the future affect their actual results and could cause their actual results for subsequent periods to differ materially from those expressed in or implied by any forward-looking statement made by or on behalf of Tim Hortons, including that the Transaction may not be consummated on the timelines anticipated by Tim Hortons or at all. Except as required by law, Tim Hortons does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Additional Information

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the Transaction, on November 3, 2014, Holdings and Partnership filed with the SEC an additional amendment to the Registration Statement on Form S-4 that was originally filed on September 16, 2014, including a draft joint information statement/circular of Burger King Worldwide and Tim Hortons that also constitutes a preliminary prospectus of Holdings and Partnership in connection with the proposed Transaction. These materials are not yet final and may be further amended. The joint information statement/circular will also be filed with the Canadian securities regulators and mailed to holders of Tim Hortons common shares after the Registration Statement is declared effective by the SEC. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE JOINT INFORMATION STATEMENT/CIRCULAR AND ALL OTHER RELEVANT DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT TIM HORTONS, BURGER KING WORLDWIDE, HOLDINGS, PARTNERSHIP AND THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed

5

with the SEC and the Canadian securities regulators free of charge at the SEC’s website, www.sec.gov, and at the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com. In addition, a copy of the joint information statement/circular (when it becomes available) may be obtained free of charge from Tim Hortons’ internet website for investors at www.timhortons-invest.com, or from Burger King Worldwide’s investor relations website at http://investor.bk.com. Investors and security holders may also read and copy any reports, statements and other information filed by Tim Hortons or Burger King Worldwide, with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room.

Certain Information Regarding Participants

Tim Hortons, Burger King Worldwide, and their respective directors, executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed Transaction. Information regarding Tim Hortons directors and executive officers is available in its management proxy circular filed by Tim Hortons on the SEDAR website maintained by the Canadian Securities Administrators at http://www.sedar.com on March 21, 2014 in connection with its 2014 annual meeting of shareholders, and information regarding Burger King Worldwide’s directors and executive officers is available in its proxy statement filed with the SEC by Burger King Worldwide on April 2, 2014 in connection with its 2014 annual meeting of shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint information statement/circular and other relevant materials to be filed with the SEC and the Canadian securities regulators when they become available.

⁽³⁾Information on non-GAAP Measures

Adjusted operating income and adjusted EPS are non-GAAP measures. Management uses adjusted operating income and adjusted EPS 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. These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP. The Company’s use of the terms adjusted operating income and adjusted EPS may differ from similar measures reported by other companies. The reconciliations of operating income and diluted EPS, which are GAAP measures, to adjusted operating income and adjusted EPS, which are non-GAAP measures, are set forth in the tables below:

Reconciliation of Adjusted Operating Income

	Q3 2014		Q3 2013		YTD 2014		YTD 2013
	(in millions)				(in millions)
Operating income		$168.8		$168.8		$506.5		$473.3
Add: Transaction costs	27.3		—		27.3		—
Add: Corporate reorganization expenses	—		1.0		—		11.0
Adjusted operating income		$196.1		$169.8		$533.7		$484.4

______________

All numbers rounded

Reconciliation of Adjusted EPS

	Q3 2014		Q3 2013		YTD 2014		YTD 2013
	($ per share)				($ per share)
Diluted EPS		$0.74		$0.75		$2.31		$2.12
Add: Transaction costs	0.21		—		0.21		—
Add: Corporate reorganization expenses	—		0.01		—		0.06
Adjusted diluted EPS		$0.95		$0.76		$2.52		$2.17

______________

All numbers rounded

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⁽⁴⁾Total systemwide sales growth includes restaurant level sales at both Company-operated and franchised restaurants. Approximately 99.6% of our systemwide restaurants were franchised as at September 28, 2014. 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 third quarter of 2014, systemwide sales on a constant currency basis increased 7.5% compared to the third quarter of 2013. Systemwide sales growth in Canadian dollars, including the effects of foreign currency translation, was 7.9% in the third quarter of 2014. 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). The amount of systemwide sales impacts our rental and royalties revenues, as well as distribution revenues.

Tim Hortons Inc. Overview

Tim Hortons is one of the largest publicly-traded restaurant chains 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, hot and cold specialty drinks (including lattes, cappuccinos and espresso shots), specialty teas and fruit smoothies, fresh baked goods, grilled Panini and classic sandwiches, wraps, soups, prepared foods and other food products. As of September 28, 2014, Tim Hortons had 4,590 systemwide restaurants, including 3,665 in Canada, 869 in the United States and 56 in the Gulf Cooperation Council. More information about the Company is available at www.timhortons.com.

For Further information:

Investors: Scott Bonikowsky, (905) 339-6186 or bonikowsky_scott@timhortons.com

Media: Olga Petrycki, (905) 339-5960 or petrycki_olga@timhortons.com

7

TIM HORTONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands of Canadian dollars, except share and per share data)

(Unaudited)

	Third quarter ended
	September 28, 2014			September 29, 2013			$ Change			% Change
Revenues
Sales	$	634,786		$	575,780		$	59,006		10.2	%
Franchise revenues
Rents and royalties	230,383			212,114			18,269			8.6	%
Franchise fees	43,986			37,459			6,527			17.4	%
	274,369			249,573			24,796			9.9	%
Total revenues	909,155			825,353			83,802			10.2	%
Costs and expenses
Cost of sales	545,050			501,856			43,194			8.6	%
Operating expenses	86,306			78,307			7,999			10.2	%
Franchise fee costs	43,577			37,865			5,712			15.1	%
General and administrative expenses	41,681			38,787			2,894			7.5	%
Equity (income)	(4,038		)	(4,075		)	37			(0.9	)%
Transaction costs	27,289			—			27,289			n/m
Corporate reorganization expenses	—			953			(953		)	n/m
Asset impairment	—			2,889			(2,889		)	n/m
Other expense (income), net	484			(57		)	541			n/m
Total costs and expenses, net	740,349			656,525			83,824			12.8	%
Operating income	168,806			168,828			(22		)	—	%
Interest (expense)	(18,518		)	(9,406		)	(9,112		)	n/m
Interest income	879			919			(40		)	(4.4	)%
Income before income taxes	151,167			160,341			(9,174		)	(5.7	)%
Income taxes	51,434			45,386			6,048			13.3	%
Net income	99,733			114,955			(15,222		)	(13.2	)%
Net income attributable to noncontrolling interests	1,602			1,092			510			46.7	%
Net income attributable to Tim Hortons Inc.	$	98,131		$	113,863		$	(15,732	)	(13.8	)%
Basic earnings per common share attributable to Tim Hortons Inc.	$	0.74		$	0.76		$	(0.02	)	(2.2	)%
Diluted earnings per common share attributable to Tim Hortons Inc.	$	0.74		$	0.75		$	(0.01	)	(2.2	)%
Weighted average number of common shares outstanding (in thousands) – Basic	132,439			150,342			(17,903		)	(11.9	)%
Weighted average number of common shares outstanding (in thousands) – Diluted	132,934			150,864			(17,930		)	(11.9	)%
Dividends per common share	$	0.32		$	0.26		$	0.06

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TIM HORTONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands of Canadian dollars, except share and per share data)

(Unaudited)

	Year-to-date period ended
	September 28, 2014			September 29, 2013			$ Change			% Change
Revenues
Sales	$	1,789,645		$	1,668,229		$	121,416		7.3	%
Franchise revenues
Rents and royalties	654,845			608,857			45,988			7.6	%
Franchise fees	105,414			79,943			25,471			31.9	%
	760,259			688,800			71,459			10.4	%
Total revenues	2,549,904			2,357,029			192,875			8.2	%
Costs and expenses
Cost of sales	1,545,765			1,452,302			93,463			6.4	%
Operating expenses	251,975			231,026			20,949			9.1	%
Franchise fee costs	106,166			83,743			22,423			26.8	%
General and administrative expenses	121,141			115,493			5,648			4.9	%
Equity (income)	(11,359		)	(11,340		)	(19		)	0.2	%
Transaction costs	27,289			—			27,289			n/m
Corporate reorganization expenses	—			11,032			(11,032		)	n/m
Asset impairment	—			2,889			(2,889		)	n/m
Other expense (income), net	2,467			(1,440		)	3,907			n/m
Total costs and expenses, net	2,043,444			1,883,705			159,739			8.5	%
Operating income	506,460			473,324			33,136			7.0	%
Interest (expense)	(53,842		)	(26,991		)	(26,851		)	n/m
Interest income	2,994			2,638			356			13.5	%
Income before income taxes	455,612			448,971			6,641			1.5	%
Income taxes	138,092			122,531			15,561			12.7	%
Net income	317,520			326,440			(8,920		)	(2.7	)%
Net income attributable to noncontrolling interests	4,730			2,670			2,060			77.2	%
Net income attributable to Tim Hortons Inc.	$	312,790		$	323,770		$	(10,980	)	(3.4	)%
Basic earnings per common share attributable to Tim Hortons Inc.	$	2.32		$	2.12		$	0.20		9.2	%
Diluted earnings per common share attributable to Tim Hortons Inc.	$	2.31		$	2.12		$	0.19		9.2	%
Weighted average number of common shares outstanding (in thousands) – Basic	134,817			152,379			(17,562		)	(11.5	)%
Weighted average number of common shares outstanding (in thousands) – Diluted	135,292			152,919			(17,627		)	(11.5	)%
Dividends per common share	$	0.96		$	0.78		$	0.18

9

TIM HORTONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(in thousands of Canadian dollars, except share and per share data)

(Unaudited)

	As at
	September 28, 2014			December 29, 2013
Assets
Current assets
Cash and cash equivalents	$	109,085		$	50,414
Restricted cash and cash equivalents	64,572			155,006
Accounts receivable, net	215,570			210,664
Notes receivable, net	6,482			4,631
Deferred income taxes	8,448			10,165
Inventories and other, net	141,133			104,326
Advertising fund restricted assets	57,230			39,783
Total current assets	602,520			574,989
Property and equipment, net	1,718,192			1,685,043
Notes receivable, net	572			4,483
Deferred income taxes	13,067			11,018
Equity investments	40,253			40,738
Other assets	129,850			117,552
Total assets	$	2,504,454		$	2,433,823
Liabilities and equity
Current liabilities
Accounts payable	$	215,215		$	204,514
Tim Card obligation	112,458			184,443
Accrued liabilities	110,757			89,565
Advertising fund liabilities	49,211			59,912
Short-term borrowings	—			30,000
Current portion of long-term obligations	18,243			17,782
Total current liabilities	505,884			586,216
Long-term obligations
Long-term debt	1,294,880			843,020
Capital leases	125,468			121,049
Deferred income taxes	7,377			9,929
Other long-term liabilities	139,769			112,090
Total long-term obligations	1,567,494			1,086,088
Commitments and contingencies
Equity
Equity of Tim Hortons Inc.
Common shares ($2.84 stated value per share), Authorized: unlimited shares. Issued: 132,576,171 and 141,329,010 shares, respectively	375,880			400,738
Common shares held in Trust, at cost: 315,932 and 293,816 shares, respectively	(14,806		)	(12,924		)
Contributed surplus	12,148			11,033
Retained earnings	154,569			474,409
Accumulated other comprehensive loss	(97,622		)	(112,102		)
Total equity of Tim Hortons Inc.	430,169			761,154
Noncontrolling interests	907			365
Total equity	431,076			761,519
Total liabilities and equity	$	2,504,454		$	2,433,823

10

TIM HORTONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands of Canadian dollars)

(Unaudited)

	Year-to-date period ended
	September 28, 2014			September 29, 2013
Cash flows provided from (used in) operating activities
Net income	$	317,520		$	326,440
Adjustments to reconcile net income to net cash provided from operating activities
Depreciation and amortization	121,163			110,447
Total return swaps (gain)	(26,509		)	(11,037		)
Stock-based compensation expense	34,967			17,132
Deferred income taxes	224			(2,458		)
Changes in operating assets and liabilities
Restricted cash and cash equivalents	90,992			50,020
Accounts receivable	(8,506		)	(11,010		)
Inventories and other	(18,666		)	(7,913		)
Accounts payable and accrued liabilities	(35,516		)	(58,213		)
Taxes	4,164			7,183
Settlement of interest rate forwards	(4,851		)	—
Deposit with tax authorities	(1,721		)	—
Other	(25,626		)	17,561
Net cash provided from operating activities	447,635			438,152
Cash flows (used in) provided from investing activities
Capital expenditures	(138,950		)	(132,726		)
Capital expenditures – Advertising fund	(5,237		)	(9,554		)
Other investing activities	10,955			6,709
Net cash (used in) investing activities	(133,232		)	(135,571		)
Cash flows (used in) provided from financing activities
Repurchase of common shares	(527,640		)	(242,222		)
Dividend payments to common shareholders	(129,367		)	(118,579		)
Net proceeds from issue of debt	448,299			—
Short-term (repayments) borrowings, net	(30,000		)	—
Principal payments on long-term debt obligations	(12,139		)	(12,901		)
Other financing activities	(6,269		)	(5,601		)
Net cash (used in) financing activities	(257,116		)	(379,303		)
Effect of exchange rate changes on cash	1,384			1,460
(Decrease) in cash and cash equivalents	58,671			(75,262		)
Cash and cash equivalents at beginning of period	50,414			120,139
Cash and cash equivalents at end of period	$	109,085		$	44,877
Supplemental disclosures of cash flow information:
Interest paid	$	37,096		$	23,259
Income taxes paid	$	144,297		$	117,418
Non-cash investing and financing activities:
Capital lease obligations incurred	$	23,238		$	25,217

11

TIM HORTONS INC. AND SUBSIDIARIES

SEGMENT REPORTING

(in thousands of Canadian dollars)

(Unaudited)

	Third quarter ended						Year-to-date period ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013
Revenues(1)
Canada	$	747,692		$	676,006		$	2,092,476		$	1,927,361
U.S.	60,099			47,019			163,152			132,687
Corporate services	4,256			3,414			13,561			12,743
Total reportable segments	812,047			726,439			2,269,189			2,072,791
VIEs(2)	97,108			98,914			280,715			284,238
Total	$	909,155		$	825,353		$	2,549,904		$	2,357,029
Operating Income (Loss)
Canada	$	196,204		$	179,597		$	538,536		$	500,178
U.S.(3)	7,436			2,717			21,047			6,214
Corporate services	(9,709		)	(14,325		)	(32,284		)	(26,414		)
Total reportable segments	193,931			167,989			527,299			479,978
VIEs(2)(3)	2,164			1,792			6,450			4,378
Transaction costs	(27,289		)	—			(27,289		)	—
Corporate reorganization expenses	—			(953		)	—			(11,032		)
Consolidated Operating Income	168,806			168,828			506,460			473,324
Interest, net	(17,639		)	(8,487		)	(50,848		)	(24,353		)
Income before income taxes	$	151,167		$	160,341		$	455,612		$	448,971

________________ 

⁽¹⁾  There are no inter-segment revenues included in the above table.

⁽²⁾  Variable interest entities.

⁽³⁾  In fiscal 2013, the Company recognized an asset impairment charge in the U.S. related to certain non-core and non-priority markets, of which $2.5 million was recognized in the U.S. segment and $0.4 million related to consolidated VIEs.

Consolidated Sales comprise the following:

	Third quarter ended				Year-to-date period ended
	September 28, 2014		September 29, 2013		September 28, 2014		September 29, 2013
Sales
Distribution sales	$	534,456	$	473,641	$	1,498,571	$	1,373,389
Company-operated restaurant sales	6,201		6,090		19,236		18,567
Sales from VIEs	94,129		96,049		271,838		276,273
Total Sales	$	634,786	$	575,780	$	1,789,645	$	1,668,229

12

EX-99.2

Exhibit 99.2

FOR IMMEDIATE RELEASE

(All amounts in Canadian dollars)

Tim Hortons Inc. declares a dividend

of $0.32 per common share

OAKVILLE, ONTARIO, (November 5, 2014): Tim Hortons Inc. (TSX: THI, NYSE: THI) today announced that the Board of Directors has declared a dividend of $0.32 per common share payable to shareholders of record as of November 20, 2014. The dividend is payable on December 5, 2014.

Dividends are declared and paid in Canadian dollars to all shareholders with Canadian resident addresses. For U.S. shareholders, the dividends will be converted to, and paid in, U.S. dollars based on prevailing exchange rates at the time of conversion by Tim Hortons for registered shareholders and by CDS Clearing and Depository Services Inc. for beneficial shareholders. The declaration and payment of future dividends remain subject to the discretion of the Board of Directors.

Tim Hortons Inc. Overview

Tim Hortons is one of the largest publicly-traded restaurant chains 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, hot and cold specialty drinks (including lattes, cappuccinos and espresso shots), specialty teas and fruit smoothies, fresh baked goods, grilled Panini and classic sandwiches, wraps, soups, prepared foods and other food products. As of September 28, 2014, Tim Hortons had 4,590 systemwide restaurants, including 3,665 in Canada, 869 in the United States and 56 in the Gulf Cooperation Council. More information about the Company is available at www.timhortons.com.

For Further information:

Scott Bonikowsky: (905) 339-6186 or bonikowsky_scott@timhortons.com

EX-99.3

Exhibit 99.3

TIM HORTONS INC.

Safe Harbor Under the Private Securities Litigation Reform Act of 1995 and Canadian Securities Laws

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information, so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those disclosed in the statement. Canadian securities laws have corresponding safe harbor provisions, subject to certain additional requirements including the requirement to state the assumptions used to make the forecasts set out in forward-looking statements. Tim Hortons Inc. (the “Company” or "Tim Hortons") desires to take advantage of these “safe harbor” provisions.

A forward-looking statement is not a guarantee of the occurrence of future events or circumstances, and such future events or circumstances may not occur. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “seeks,” “target,” “aspiration,” “outlook,” “forecast” or words of similar meaning, or future or conditional verbs, such as “will,” “should,” “could” or “may.” Examples of forward-looking statements that may be contained in our public disclosure from time-to-time include, but are not limited to, statements concerning management’s expectations relating to possible or assumed future results, our strategic goals, our aspirations, our strategic priorities, and the economic and business outlook for us, for each of our business segments, and for the economy generally. Many of the factors that could determine our future performance are beyond our ability to control or predict. The following factors, in addition to other factors set forth in our Form 10-K filed on February 25, 2014 (“Form 10-K”), as updated in the Quarterly Report on Form 10-Q expected to be filed on November 6, 2014, with the U.S. Securities and Exchange Commission (“SEC”) and the Canadian Securities Administrators (“CSA”), and in other press releases, communications, or filings made with the SEC or the CSA, could cause our actual results to differ materially from the expectation(s) included in forward-looking statements and, if significant, could materially affect the Company’s business, revenue, share price, financial condition, and/or future results, including, but not limited to, causing the Company to: (i) close restaurants, (ii) fail to realize our same-store sales growth targets, which are critical to achieving our financial targets, (iii) fail to meet the expectations of our securities analysts or investors, or otherwise fail to perform as expected, (iv) experience a decline and/or increased volatility in the market price of its stock, (v) have insufficient cash to engage in or fund expansion activities, dividends, or share repurchase programs, or (vi) increase costs at the corporate or restaurant-level, which may result in increased restaurant-level pricing, which, in turn, may result in decreased guest demand for our products resulting in lower sales, revenue, and earnings. Additional risks and uncertainties not currently known to us or that we currently believe to be immaterial may also materially adversely affect our business, financial condition, and/or operating results. 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.

Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about: (i) prospects and execution risks concerning our growth strategy; (ii) the absence of an adverse event or condition that damages our strong brand position and reputation; (iii) 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; (iv) cost and availability of commodities; (v) the absence of an adverse event or condition that disrupts our distribution operations or impacts our supply chain; (vi) continuing positive working relationships with the majority of the Company’s restaurant owners; (vii) the absence of any material adverse effects arising as a result of litigation; (viii) there being no significant change in the Company’s ability to comply with current or future regulatory requirements; (ix) the ability to retain our senior management team or the inability to attract and retain new qualified personnel; (x) the Company’s ability to maintain investment grade credit ratings; (xi) the Company’s ability to obtain financing on favorable terms; and (xii) general worldwide economic conditions. 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 purposes.

Factors Affecting Growth and Other Important Strategic Initiatives. The Company’s growth strategy and other strategic initiatives may not be successful and may expose the Company to certain risks, including the following:

•     There can be no assurance that the Company will be able to achieve new restaurant or same-store sales growth objectives, that new restaurants will be profitable or that strategic initiatives will be successfully implemented. Early in the development of new markets, the opening of new restaurants may negatively impact the same-store sales growth and profitability of existing restaurants in the market. When the Company enters new markets, it may be necessary to extend or provide relief and support programs for restaurant owners which could increase costs and thus decrease net income.

• The Company may enter markets where its brand is not well known and where it has little or no operating experience. New markets may have different competitive conditions, consumer tastes or discretionary spending patterns than existing markets and/or higher construction, occupancy, and operating costs for restaurants. As a result, new restaurants in those

markets may have lower average restaurant sales than restaurants in existing markets and may take longer than expected to reach target sales and profit levels or may never do so, thereby affecting overall financial condition and/or financial results. The Company will need to build brand awareness in those markets it enters through advertising and promotional activity which may not be as effective as intended.

• The Company may rationalize and close underperforming restaurants in order to improve overall profitability. Such closures may be accompanied by impairment charges, closure costs, and/or valuation allowances that may have a negative impact on earnings.

• The success of any restaurant depends in substantial part on its location. There can be no assurance that current locations will continue to be attractive as demographic patterns or economic conditions change. If the Company cannot obtain desirable locations for restaurants at reasonable prices, then the Company’s ability to affect its growth strategy will be adversely affected.

• The Company has vertically integrated manufacturing, warehouse and distribution capabilities which may, at times, result in delays or difficulties.

• The Company intends to evaluate potential mergers, acquisitions, joint-venture investments, alliances, vertical integration opportunities and divestitures, which are subject to many of the same risks that also affect new store development as well as various other risks. There can be no assurance that the Company will be able to complete desirable transactions.

• The Company may continue to pursue strategic alliances (including co-branding) with third parties but there can be no assurance that new strategic partners can be found, that current strategic alliances can be maintained or that significant value will be recognized through such strategic alliances. Furthermore, such relationships as well as the expansion of the Company’s current business through other similar initiatives may expose it to additional risks that may adversely affect the Company’s brand and business.

• The Company’s financial outlook and long-range targets are based on the successful implementation, execution and guest acceptance of the Company’s strategic plans and initiatives. Accordingly, the failure of any of these criteria could cause the Company to fall short of achieving its financial objectives and long-range aspirational goals.

The Importance of Canadian Segment Performance and Brand Reputation. The Company’s success is largely dependent upon its ability to maintain and enhance the value of its brand, guests’ connection to and perception of the brand, and a positive relationship with restaurant owners. Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity or result in litigation. Some of these incidents may arise from events that are beyond the Company’s control and may damage the brand, such as: actions taken (or not taken) by one or more restaurant owners or their employees relating to health, safety, quality assurance, environmental, welfare, labor matters, public policy or social issues, or otherwise; litigation and claims; failure of, or security breaches or other fraudulent activities associated with, the Company’s networks and systems; illegal activity targeted at the Company; negative incidents occurring at or affecting business partners, suppliers, affiliates, or corporate social responsibility programs of the Company; the quality of products from vertically integrated manufacturing facilities or the Company’s other suppliers; negative comments about us or improper disclosure of proprietary or personal information on social media; and negative publicity, whether true or not.

The Tim Hortons brand is synonymous with the delivery of quality food products at value prices. If the Company is unable to maintain in Canada, or unable to maintain and/or achieve in other markets, an appropriate price-to-value relationship for its products in the minds of guests, its ability to increase or maintain same-store sales may be affected. The ability of the Company to maintain or achieve the appropriate price-to-value relationship also may be affected by discounting or other promotional activity of competitors, which can be very aggressive. Furthermore, the Company’s financial performance is highly dependent on its Canadian business unit and any substantial or sustained decline in its Canadian business would materially and adversely affect the overall financial performance of the Company.

Competition. The quick service restaurant segment of the food service industry is intensely competitive. The Company competes with international, regional, and local organizations primarily through the quality, variety, and value perception of food and beverage products offered. Other key competitive factors include: the number and location of restaurants; quality and speed of service; attractiveness of facilities; effectiveness and magnitude of advertising, marketing, promotional, and operational programs; price; changing demographic patterns and trends; changing consumer preferences and spending patterns, including weaker consumer spending in difficult economic times, or a desire for a more diversified menu; changing health or dietary preferences and/or perceptions; and, new product development. If the Company is unable to maintain its competitive position there could be a lower demand for products, downward pressure on prices, reduced margins, an inability to take advantage of new business opportunities, a loss of market share, and an inability to attract qualified restaurant owners in the future.

Innovation. The success of the Company’s same-store sales growth strategy is dependent partly on its ability to extend product offerings, introduce innovative new products, adapt to consumer trends and desires, achieve the hospitality and speed of service standards expected by guests and provide a distinctive and overall quality guest experience. The Company’s ability to develop commercially successful new products will depend on its ability to gather sufficient data and effectively gauge the

direction of trends and identify, develop, manufacture, market and sell new or improved products in response to such trends. The speed of service and capacity in Tim Hortons restaurants may be impacted by new product offerings which could have an adverse effect on financial conditions or results of operations.

Commodities. The Company is exposed to price volatility in connection with certain key commodities that it purchases in the ordinary course of business such as coffee, wheat, edible oils and sugar, which can impact revenues, costs and margins. Although the Company monitors its exposure to commodity prices and its forward hedging program partially mitigates the negative impact of any cost increases, price volatility for commodities it purchases has increased due to conditions beyond its control, including economic and political conditions, currency fluctuations, availability of supply, weather conditions, pest damage and changing consumer demand and consumption patterns. Increases and decreases in commodity costs are largely passed through to restaurant owners and the Company and its restaurant owners have some ability to increase product pricing to offset a rise in commodity prices, subject to restaurant owner and guest acceptance. The Company may choose not to pass along all commodity cost increases to its restaurant owners which could have a significant effect on the business and results of operations of the Company. Price fluctuations may also impact margins as many of these commodities are typically priced based on a fixed-dollar mark-up. Although the Company generally secures commitments for most of its key commodities that generally extend over a six-month period, these may be at higher prices than its previous commitments. If the supply or quality of commodities, including coffee, fails to meet demand or quality standards, the Company’s restaurant owners may experience reduced sales which would reduce rents and royalty income as well as distribution income of the Company. Such a reduction in the Company’s income may adversely impact the Company’s business and financial results.

Food Safety and Health Concerns. Incidents or reports, whether true or not, of: unclean water; food-borne illness; food tampering, food contamination, product recall, hygiene and cleanliness failures or impropriety at Tim Hortons, or other quick service restaurants unrelated to Tim Hortons, or potential health impacts of consuming certain of the Company’s products, including its core products, could result in negative publicity, damage to the Company’s brand value and, potentially, product liability or other claims. Any decrease in guest traffic or temporary closure of any of the Company’s restaurants as a result of such incidents or negative publicity may have a material adverse effect on the business, results of operations and financial condition of the Company.

Distribution Operations and Supply Chain. The Company’s distribution operations and supply chain may be impacted by various factors, some of which are beyond its control, that could injure its brand and negatively affect results of operations and/or increase costs, including: increased transportation, shipping, food and other supply costs; inclement weather or extreme weather events; risks of having a single source of supply for certain food and beverage products; shortages or interruptions in the availability or supply of high-quality coffee beans, perishable food products and/or their ingredients; variations in the quality of the Company’s food and beverage products and/or their ingredients; potential cost and disruption of a product recall; potential negative impacts on the Company’s relationship with restaurant owners associated with an increase of required purchases, or prices, of products purchased from its distribution business; and political, physical, environmental, labor, or technological disruptions in manufacturing and/or warehousing plants, facilities, or equipment.

Importance of Restaurant Owners. A substantial portion of the Company’s earnings come from royalties and other amounts paid by restaurant owners, who operate substantially all of the Tim Hortons restaurants. Accordingly, the Company’s financial results are, to a large extent, dependent upon the operational and financial success of Tim Hortons restaurant owners. There can be no assurance that the Company will be able to maintain positive relationships with existing restaurant owners or attract sufficient numbers of qualified restaurant owners, either of which could materially and adversely affect its business and operating results. Furthermore, success of the Company’s same-store sales growth strategy and brand reputation is dependent on, among other things, achievement of hospitality, operational standards, and a positive overall guest experience. There can be no assurance that the Company and restaurant team members will be able to continue to attract, retain and motivate sufficient numbers of qualified restaurant employees who will be able and willing to achieve the hospitality and operational restaurant-level standards of the Company. Restaurant owners are independent contractors and some restaurant owners may not successfully operate restaurants in a manner consistent with the Company’s standards and requirements or comply with federal, provincial or state labor laws (including minimum wage requirements, overtime, working and safety conditions, employment eligibility and temporary foreign worker requirements). Furthermore, some restaurant owners may not be able to hire, train and retain qualified managers and other restaurant personnel. Any operational shortcoming of a franchised restaurant is likely to be attributed by guests to the Company, thus damaging its brand reputation and potentially affecting revenues and profitability. Competitors that have a significantly higher percentage of company-operated restaurants than Tim Hortons may have greater control over their respective restaurant systems and have greater flexibility to implement operational initiatives and business strategies. Since the Company receive revenues in the form of rents, royalties, and franchise fees from restaurant owners, its revenues and profits would decline and its brand reputation could also be harmed if a significant number of restaurant owners were to: experience operational failures, including health, safety and quality assurance issues; experience financial difficulty; be unwilling or unable to pay for food and supplies, or for royalties, rent or other fees; fail to enter into renewals of franchise, operating or license agreements; or experience

labor shortages, including due to changes in employment eligibility requirements, the cessation or limitation of access to federal or provincial labor programs, including the temporary foreign worker program, or significant increases in labor or other costs of running their businesses.

Litigation. From time to time, the Company is subject to claims incidental to its business, such as “slip and fall” accidents at franchised or Company-operated restaurants, claims and disputes in connection with site development and restaurant construction as well as employment claims. In addition, class action lawsuits have been filed in the past, and may continue to be filed, against quick service restaurants alleging that quick service restaurants have failed to disclose the health risks associated with their products or that certain food products contribute to obesity. The Company may also be subject to claims from employees, guests, and others relating to health and safety risks and conditions of Tim Hortons restaurants associated with design, operation, construction, site location and development, indoor or airborne contaminants and/or certain equipment utilized in operations. In addition, the Company may face claims from: (a) employees relating to employment or labor matters, including, potentially, class action suits regarding wages, discrimination, unfair or unequal treatment, harassment, wrongful termination, or overtime compensation; (b) restaurant owners and/or operators regarding their profitability, wrongful termination of their franchise or operating (license) agreement, as the case may be, or other restaurant-owner relationship matters; (c) taxation authorities regarding tax disputes or tax positions taken by the Company; and/or (d) business partners, stakeholders or other third parties relating to intellectual property infringement claims. In certain agreements, the Company may agree to indemnify its business partners against any losses or costs incurred in connection with claims by a third party alleging that the Company’s services infringe the intellectual property rights of the third party. Companies have increasingly become subject to infringement threats from non-practicing organizations (sometimes referred to as “patent trolls”) filing lawsuits for patent infringement. The Company, or its partners, may become subject to claims for infringement and it may be required to indemnify or defend its business partners from such claims. All of these types of matters have the potential to unduly distract management’s attention and increase costs, including costs associated with defending such claims. The Company’s current exposure with respect to pending legal matters could change if determinations by judges and other finders of fact are not in accordance with management’s evaluation of such claims. Should management’s evaluations prove incorrect and such claims are successful, the Company’s exposure could exceed expectations and have a material adverse effect on its business, financial condition and results of operations. Although some losses may be covered by insurance, if there are significant losses that are not covered, or there is a delay in receiving insurance proceeds, or the proceeds are insufficient to offset our losses fully, our consolidated financial condition or results of operations may be adversely affected.

Tax Authorities. A taxation authority may disagree with certain views of the Company, including, for example, the allocation of profits by tax jurisdiction, the deductibility of interest expenses, or the tax aspects of reorganizations, initiatives or transactions that the Company has undertaken and such tax authority may take the position that material income tax liabilities, interests, penalties, or other amounts are payable by the Company. The Company expects it would contest such an assessment, but this may be lengthy and costly and, if unsuccessful, the implications could be materially adverse to the Company and affect its effective tax rate or operating income. Under the Company’s current corporate structure, an increase in debt levels beyond the current target of $900.0 million could result in further increases in the effective tax rate resulting from incurring additional interest expense for which it may not receive a tax benefit, and/or increases in income or withholding taxes on distributions from the Canadian operating company to its parent corporation. Addressing constraints in the Company’s corporate structure is an important consideration to maintaining its effective tax rate over the longer term, although there can be no assurance that the Company will be able to address these constraints in a timely or tax efficient manner. The Company’s inability to address these constraints in a timely or efficient manner could negatively affect its projected results, future operations, and financial condition.

Regulation. The Company is subject to various laws and regulations, including laws and regulations relating to: zoning, land use (including the development and/or operation of drive-thru windows), transportation and traffic; health, food, sanitation and safety; taxes; privacy laws, including the collection, retention, sharing and security of data; immigration, employment and labor laws (such as the U.S. Fair Labor Standards Act and similar Canadian legislation), including some increases in minimum wage requirements that were implemented in certain provinces in Canada and states in the U.S. in 2013 and other increases in such jurisdictions that may occur in the future, that have increased, or will increase, the Company’s and restaurant owners’ labor costs in those provinces and states; preventing discrimination and harassment in the workplace and providing certain civil rights to individuals with disabilities; laws affecting the design of facilities and accessibility (such as the Americans with Disabilities Act of 1990 and similar Canadian legislation); taxes; environmental matters; product safety; nutritional disclosure and regulations regarding nutritional content, including menu labeling and TFA content; advertising and marketing; record keeping and document retention procedures; new and/or additional franchise legislation; and anti-corruption laws. The Company is also subject to applicable accounting and reporting requirements and regulations, including those imposed by Canadian and U.S. securities regulatory authorities, the NYSE and the TSX. The complexity of the regulatory environment in which the Company operates and the related costs of compliance are increasing. Changes in such laws and regulations and/or failure to comply with existing or future laws and regulations could adversely affect the Company and expose it to litigation or sanction, damage its brand reputation and/or lower profits. Compliance with these laws and regulations and planning initiatives undertaken in connection with such laws and regulations could increase the Company’s cost of doing business; reduce operational efficiencies; and, damage its reputation.

Increases in costs could impact profitability of the Company and restaurant owners. Failure to comply with such laws or regulations on a timely basis may lead to civil and criminal liability, cancellation of licenses, fines, and other corrective action, any of which could adversely affect the business and future financial results of the Company and have an adverse impact on its brand.

Senior Management Team. The Company’s success will continue to depend to a significant extent on its executive management team and the ability of other key management personnel to replace executives who retire or resign. The Company may not be able to retain its executive officers and key personnel or attract additional qualified management personnel to replace executives who retire or resign. Failure to retain the leadership team of the Company and attract and retain other important personnel could lead to ineffective management and operations, which could decrease profitability. Effective July 2, 2013, the board of directors of the Company appointed Mr. Marc Caira to the position of President and Chief Executive Officer. With the change in leadership, there is a risk to retention of other members of senior management, even with the existing retention program in place.

Reliance on Systems. If the network and information systems and other technology systems that are integral to retail operations at system restaurants and at the Company’s manufacturing and distribution facilities, and at its office locations are damaged or interrupted from power outages, computer and telecommunications failures, computer worms, viruses, phishing and other destructive or disruptive software, security breaches, catastrophic events and improper or personal usage by employees, such an event could have an adverse impact on the Company and its guests, restaurant owners and employees, including a disruption of its operations, guest dissatisfaction or a loss of guests or revenues. The Company relies on third-party vendors to retain data, process transactions and provide certain services. In the event of failure in such third-party vendors’ systems and processes, the Company could experience business interruptions or privacy and/or security breaches surrounding its data. The Company continues to enhance its integrated enterprise resource planning system. The introduction of new modules for inventory replenishment, sustainability, and business reporting and analysis will be implemented. There may be risks associated with adjusting to and supporting the new modules which may impact the Company’s relations with its restaurant owners, vendors and suppliers and the conduct of its business generally. If the Company fails to comply with new and/or increasingly demanding laws and regulations regarding the protection of guest, supplier, vendor, restaurant owner, employee and/or business data, or if the Company (or a third-party with which it has entered into a strategic alliance) experiences a significant breach of guest, supplier, vendor, restaurant owner, employee or Company data, the Company’s reputation could be damaged and result in lost sales, fines, lawsuits and diversion of management attention. The use of electronic payment systems and the Company’s reloadable cash card makes it more susceptible to a risk of loss in connection with these issues, particularly with respect to an external security breach of guest information that the Company, or third parties under arrangement(s) with it, control.

Other Significant Risk Factors. The following factors could also cause the Company’s actual results to differ from its expectations: (i) fluctuations in the U.S. and Canadian dollar exchange rates; (ii) an inability to adequately protect the Company’s intellectual property and trade secrets from infringement actions or unauthorized use by others; (iii) potential liabilities and losses associated with owning and leasing significant amounts of real estate; (iv) changes in its debt levels and a downgrade of its credit ratings; (v) challenging economic conditions; (vi) uncertain international expansion; (vii) catastrophic events; and (viii) certain anti-takeover provisions that may have the effect of delaying or preventing a change in control.

Risk Factors related to the Proposed Transaction with Burger King Worldwide, Inc.

On August 26, 2014, the Company announced that it had entered into a definitive agreement (the “Arrangement Agreement”) with Burger King Worldwide, Inc. (“Burger King”) and certain of its affiliates. Pursuant to and subject to the terms and conditions of the Arrangement Agreement, Burger King has agreed to acquire the Company in a transaction (“Transaction”) that will result in Burger King and Tim Hortons being indirect subsidiaries of 9060669 Canada Inc. (“Holdings”) as further described in an amended registration statement on Form S-4 (the “Form S-4”) filed with the SEC on November 3, 2014 by Holdings and New Red Canada Limited Partnership (the “Partnership”). In addition to the risks described above, readers should also be aware of certain risks relating to the Transaction. For a full description of the risks relating to the Transaction, please refer to the Form S-4. Risks relating to the Transaction include the following:

Terminations. The Arrangement Agreement contains a number of conditions that must be fulfilled to complete the Transaction. Those conditions include, among other customary conditions, the approval of the arrangement resolution by Tim Hortons shareholders, the approval of the arrangement by the Ontario court, receipt of requisite regulatory approvals, absence of orders prohibiting consummation of the Transaction, effectiveness of the registration statement that has been filed by Holdings and Partnership to register the shares of Holdings common stock and Partnership exchangeable units that will be issued as consideration in the Transaction, approval of the Holdings common shares for listing on the NYSE and conditional approval for listing on the TSX and conditional approval of the Partnership exchangeable units for listing on the TSX. These conditions to the closing of the Transaction may not be fulfilled and, accordingly, the Transaction may not be completed. In addition, if the Transaction is not completed by March 31, 2015 (subject to extension to April 30, 2015, if the only conditions not satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing, which conditions shall be capable of being

satisfied) are conditions relating to regulatory approvals and the absence of any orders relating to regulatory approvals), either Tim Hortons or Burger King may choose to terminate the Arrangement Agreement. In addition, Tim Hortons or Burger King may elect to terminate the Arrangement Agreement in certain other circumstances, and the parties can mutually decide to terminate the Arrangement Agreement at any time prior to the closing, before or after the approval of Tim Hortons shareholders or Burger King’s stockholders, as applicable.

Failure to Complete. If the Transaction is not completed, the ongoing business of Tim Hortons may be adversely affected. Additionally, if the Transaction is not completed and the Arrangement Agreement is terminated, in certain circumstances, we may be required to pay to Burger King a termination fee of up to C$345 million. In addition, we may incur significant transaction expenses in connection with the Transaction regardless of whether the Transaction is completed. The foregoing risks, or other risks arising in connection with the failure of the Transaction, including the diversion of management attention from conducting the business of the Company and pursuing other opportunities during the pendency of the Transaction, may have a material adverse effect on our business, operations, financial results and share price. In addition, we could be subject to litigation related to any failure to consummate the Transaction or any related action that could be brought to enforce a party’s obligation under the Arrangement Agreement.

Restrictions. The Arrangement Agreement restricts us from taking specified actions until the Transaction occurs without the consent of the other party. These restrictions may prevent us from pursuing attractive business opportunities that may arise prior to the completion of the Transaction. In addition, employee retention may be challenging during the pendency of the Transaction, as certain employees may experience uncertainty about their future roles.

Business Disruption.Parties with which we currently do business or may do business in the future, including franchisees, customers and suppliers, may experience uncertainty associated with the Transaction, including with respect to current or future business relationships with us, Partnership or Holdings. As a result, our business relationships may be subject to disruptions if franchisees, customers, suppliers and others attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than Tim Hortons as a result of the Transaction. These disruptions could have a material and adverse effect on the businesses, financial condition, results of operations or prospects of Holdings and Partnership following the closing. The effect of such disruptions could be exacerbated by a delay in the consummation of the Transaction or termination of the Arrangement Agreement.

Litigation.We and our directors may be named as defendants in shareholder class actions challenging the proposed Transaction. Among other remedies, the plaintiffs in such actions, if they do arise, may seek to enjoin the Transaction. Such legal proceedings could delay or prevent the Transaction from becoming effective within the agreed upon timeframe.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date and time made. Except as required by federal or provincial securities laws, the Company undertakes no obligation to publicly release any revisions to forward-looking statements, or to update them to reflect events or circumstances occurring after the date forward-looking statements are made, or to reflect the occurrence of unanticipated events.